Some people say the only two things that can be counted on as certainity are death and taxes – but Vincent Virga, President of PFS Wealth Management Group, has a different outlook.

In his view, when it comes to creating and maintaining wealth, the only two things investors should count on are volatility and uncertainty.

We have to plan accordingly,” Virga said, explaining how a risk parity approach, a plan based on uncertainty will help clients ride out market ups and downs, feeling potentially only smaller bumps, more like those of a street carnival ride rather than a theme park roller coaster. These two variables – uncertainty and volatility – are inevitable when dealing with the market and natural human impulses. Greed and fear are the two main factors that he feels were at the root of the last two major market corrections.

“From 1982 to 2000,” he said, “nobody could do anything wrong – and greed took over. When 2000 came, greed turned to fear.” Virga further explained that if investors had stayed the course with proper asset class diversification during that correction instead of reacting with fear, they would’ve been probably ahead after just a couple of years. When the money came back in 2007, greed took over once again and by 2008, fear takes the money away again.

“History repeats itself. We have to understand that in order to plan for the future. We have to have proper diversification, and do our best to remove fear and greed out of the equation so we do not make irrational decisions,” Virga said emphatically.

True Asset Class Diversification is at the heart of a solid and sustainable portfolio. PFS’s unique three-tiered system ensures clients have an optimal mix of assets classes that traditionally will not be correlated with one another. “What we’ve built is a simplified endowment model for our clients,” Virga said. “In the end, it’s the risk parity approach to how we manage our clients’ portfolios. We want to base our portfolio management and design on certainty – and not on any one asset class.”

Solving retirement income needs is at the top of the list. “Most individuals we come in contact with no longer have the opportunity for a pension,” Virga explained. This creates a situation where clients need to build their own source of sustainable income to cover their fixed expenses, one that neither spouse can ever outlive and for which they maintain some levels of control over.
“We’ve got to provide levels of clarity and sustainability that every month they will have a check coming in,” Virga said. “It’s what we call personal pension, or liability immunization.”

With that piece in place, Virga looks at market investments as well as hard assets. “The former,” he said, “provide growth and liquidity, while the latter can generate a potential for an immediate cash flow without being directly tied to market fluctuations.”

Virga explained the PFS philosophy of wealth growth and management, “In the totality of the process, we strive to provide our clients with safety from market correlation. We also strive to provide them with growth opportunity, while all along being cognizant of their liquidity needs.”

This comprehensive approach seeks to ensure balance and sustainability – but that doesn’t mean Virga is conservative across the board. When it comes to the market, he believes in being adaptive and tactical.

“My belief is that the passive buy-and-hold mentality just does not work in this unstable geopolitical neighborhood that we live in,” he said, adding that his primary objective is to make sure his clients consider market investments from an objective standpoint, moving away from the problematic reactions caused by fear and greed.

“It’s our responsibility and our moral imperative to try to provide clarity in our clients’ lives,” Virga said, in referring to the firm’s educational process. To help clients understand the complexities of financial planning, PFS provides learning opportunities through seminars and workshops to the general public. Virga also hosts educational summits where select clients share a meal, converse casually and meet the people behind the companies they’ve invested in. His proactive approach to client education extends to Virga’s view on client relationships. “The minute they come on board, they have my cell phone number and can contact me for any reason whatsoever. If they get a flat on the NJ Turnpike, they can call me.”

Although prospective clients need to pass a 4-way test developed to ensure that the relationship will be a good fit for both parties, once clients are accepted, they are provided white-glove personalized service.

“We at PFS, feel we are setting a new standard for the role of advisor,” he said, explaining how every client is appointed a financial concierge. “The role of that team member is to go above and beyond the call of duty to make sure all of the client’s servicing needs are taken care of.”

Virga encourages those seeking financial advice to expect more from advisors, to do their research, make sure their advisor offers complete transparency and ask the tough questions to avoid scams and schemers.

“When individuals are giving over their life savings to someone who is, in essence, a complete stranger, they have a vested interest in making sure they know who is managing their money.”
While fee-based models fulfill fiduciary transparency, Virga goes a step further by noting how a true fiduciary will use all available tools to ensure a client’s needs are met. Right now, this includes some products such as certain types of annuities that are not yet available to the fee-based market.

Continuously looking for opportunities to guide and educate his clients, Virga sees social media, personalized market video updates, radio broadcasts and at least one book on the horizon for 2015.

For more information, visit: www.pfswealthgroup.com