Financial Literacy

Educating Public on Investing Leads to Successful Wealth Management Firm

Frankly, to be kind to its writers, even just a front-page summary is, for most investors, a boring read, let alone the following pages and pages of a prospectus that accompany any financial investment.

“Most people don’t read them and even if they do, they don’t understand all that fine print and what it really means,” said David Damm, co-founder and managing partner of Carolina Wealth Management, Inc., of Greenville, North Carolina.

Yet, it’s where all the fees and legalese are, and its contents impact the investor’s pocketbook whether or not he or she takes the time to read it thoroughly, or even glance it over.

“It is our job to take that interest for the client,” Damm said regarding his philosophy on the role a financial advisor plays in helping clients navigate the often confusing world of fee structure and the myriad of notices that clients receive regarding their investments. “Even though the industry has been promoting transparency now for the past decade, it still is way too complex. It is very difficult to understand and, thus, we help our clients gain a better understanding of the prospectus as much as we possibly can.”

It’s why the investment philosophy used by Carolina Wealth Management is to keep the process simple.

Damm identifies the best investments available through an analysis of the manager’s track record as well as identifying, asset allocation, risk and fee structures with the best value for the investor. This provides him with a list of investments he and his firm is confident in recommending to their clients.

His well-honed interest in the investing world began in graduate school when he started his own IRA by chipping in a $100 a month while working toward his master’s degree in finance. He was reading every financial investment magazine he could get his hands on. But, little did he know that he would also meet a professor who would lay a track for Damm to follow for decades.

“This professor took it upon himself to teach the public the principles of investing through workshops,” Damm said. “I admired what he was doing and the approach he was taking and I really wanted to be a part of what he was trying to build in terms of financial literacy for the community at large.”

In the late 1990s, Damm went to work with the professor as he left the university and set out on a nation-wide campaign conducting workshops and bringing average Americans under his financial wings as clients.

“He started educating people about the practice of investing, and to some extent was the one of the first people to crack the door on explaining the difference of how fees and portfolios were constructed between brokers and advisors,” Damm said.

It was a time of significant professional growth for Damm as he met with citizens across the country. Time and time again he listened to their stories of confusion and frustration with the investing process. He knew the professor was on the right track with his emphasis on teaching first, then entering in to a business relationship with the people that attended public workshops.
A few years later, Damm and Derek Pszenny, also a co-founder of Carolina Wealth, decided to focus more on client service within the local community and formed Carolina Wealth Management based on the professor’s principles.

“We built Carolina Wealth on the same foundation he used: an investment practice that started with education (of the clients) first,” Damm said. “We felt that was of tremendous importance to fulfill our role to the client. We take the management of their money and their portfolios very seriously.”

Damm earned the accredited investment fiduciary designation from the Center for Fiduciary Studies at the University of Pittsburgh’s Center for Executive Education in 2005 – long before the federal Department of Labor began writing its own definition of fiduciary to be enforced for financial advisors handling 401K accounts.

The fiduciary topic is one Damm holds near and dear.

“Becoming an independent advisor from the beginning, I always felt that I was on the right side of the track,” he said, noting that he has never held any of the “series” designation necessary to sell investment products. “I never wanted the incentive to sell products. I have always felt the best approach to help clients navigate how to grow their money was for me to stay away from commission and be fee-based only.”

Damm hopes the new national emphasis on the fiduciary role helps the general public better understand the concept of an advisor putting their needs first, as well as the various fee structures through which advisors are paid.

But the biggest change he sees that could help the investing public would have to come from within the industry itself.

“The financial services industry has a greed problem,” he said. “Fees are the number one driving force for too many of the investment models. Changing that is what will make a difference for investors. This has to be a service industry and not a sales industry.”

Learn more about David R. Damm, AIF ®and Carolina Wealth Management, Inc., online at

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