Winston-Salem-based Salem Investment Counselors recently was ranked first in the CNBC FA 100 list of top U.S. financial advisory firms for 2019. It’s quite an accomplishment for the business, which is celebrating its 40th anniversary this year.
The television network ranks the firms based on data collected by AccuPoint Solutions and is based on factors including average account size, disclosures, years in business, total accounts under management, ratio of investment advisers to total number of employees and assets under management. Each section was weighted according to criteria created by CNBC and AccuPoint.
According to CNBC, Salem manages $1.35 billion for 1,652 accounts.
Asheville-based Boys, Arnold & Co. was the only other N.C. adviser firm on the list, ranking 41st. It manages $1.09 billion for 1,051 accounts.
In an interview with CNBC, Salem Investment President David Rea said the company typically holds about 35 stocks with very little turnover. When asked about his current view of the stock market, he said, “With [price-earnings ratios] of 15 to 20 and interest rates where they are, I think it’s fine. … I feel like I can make a guess if PEs are between 10 and 15 like they’ve been in my career. If they are above 22 or 23, I can say it’s kind of expensive. I think it’s fine. [now].”
While Rea started his career specializing in investing in small bank stocks, Salem now mostly buys shares in giant companies including Apple, Amazon, Disney, 3M and Pfizer.
The company shared these responses to emailed questions. The comments were slightly edited for clarity.
What are the keys to your success?
Keys include our longevity as we’re celebrating our 40th anniversary this year, our great clients and staff, having $1.5 billion of assets under management, and our love for this business.
How does your approach to wealth management set Salem apart?
At Salem, the client is always first. We build custom portfolios placing special attention on the needs of each individual and family, while providing the highest level of personalized service. This is done with a focus on keeping fees reasonable and transparent. Through this focus, we have built long-term relationships with our clients. We feel our research methodology and portfolio construction is an advantage for Salem and [directly] benefits each client. Our advisers collectively have more than 300 years of investment management experience with many academic and professional distinctions.
Has Salem been on a growth mode over the last few years? Hired more advisers?
Yes, but reasonable growth. In the last few years, Salem has begun to focus on the future and ensure continuity for its clients. As a privately owned firm, Salem is committed to remaining private. As such, we have begun to hire new, talented advisers with a deep understanding of our industry. This will ensure Salem’s future.
Additionally, we are experiencing growth within our portfolios, client referrals and other new business development.
Is the Triad a good market for your work?
Yes. Salem has been in the Triad for 40 years. The support of clients here has allowed Salem to be a successful business and achieve our recent distinction as the top financial advisory firm in the country.
Can you tell us a little of the history of how Mr. Rea and others have built up the firm?
From our beginning, referrals from existing clients has been the foundation of growth. We are focused on giving the greatest attention to our client’s goals and ensuring the best service possible. This creates opportunity for good performance and low client turnover, all at a reasonable price.