Like the letterhead says, we are now Provident Investment Management. While nothing has changed operationally in the few days since the transition, it still feels like a big change for someone like me who has been here for well over 21 years now.
When I first joined Seger-Elvekrog on March 2nd, 1992, we consisted of Ralph Seger, Maury Elvekrog, and three part-time administrative assistants each working two days a week. Ralph and Maury found all the clients, researched all the stocks, and communicated with all the clients. They owned the entire firm. They were the entire firm. The name of the firm made perfect sense since it was clearly their show.
I came from the investment division of the 25th largest bank in the country, National Bank of Detroit. (NBD is now part of JP Morgan Chase.) I left a company that employed about 25,000 people to join a firm with 3.2 full-time equivalent employees. There were many reasons for the action I took and they can all be summed up in one thought: I wanted to combine the professionalism of a large firm with the effectiveness and familiarity that comes with a small firm. The result is Provident Investment Management. Provident has been 21 years in the making, even if it seems to have just popped up in the past few months.
We refined our research process over the years without changing our focus on growth companies at reasonable prices. Ralph and Maury researched stocks they found interesting, but didn’t worry about developing expertise in certain industries. Assigning industries to each analyst was one of the areas the larger firms like NBD had right, so we adopted it.
Client portfolios weren’t as consistent as they should have been. Performance varied too much even between clients with similar investment objectives. A lot of it had to do with account monitoring software that was state of the art when purchased in 1988, but was not up to the job any longer. Over the years, better packages came out that could run more reports to help us manage portfolios more effectively. We researched them and bought the one we felt best met our needs. We still use it today.
The business was growing and had become more complex. Having different support staff working on different days left some things falling through the cracks and required administrative time of Ralph, Maury, and me. We offered one of our staffers the opportunity to become full-time and she accepted. That was Pat Beach, whom many of you know. She is happily retired and in the grandparent business now. Pat’s attention to detail freed up more time for the three of us to spend on clients and investments.
We were also spending quite a bit of time marketing to prospective clients. However, our best marketing is our track record of outstanding investment results, and we knew that it would take our full concentration to keep it that way. We brought on Dan Krstevski, who worked in one of the retail branches of what is now TD Ameritrade. TD custodied our client assets at the time and Dan had successfully introduced us to several new clients. Again, this freed up more time to work with our clients and their investments, the cornerstones of our business.
Ralph Seger is one of the most amazing people I’ve met. I always said that he’s the only one who didn’t realize how old he was. He always seemed about 15 years younger than it said on his driver’s license. However, we needed to prepare for the day when Ralph would hang up his HP Business Analyst calculator. Dan Boyle was brought on in 2004 to pave the way for Ralph to eventually retire. Dan already had an MBA and his Chartered Financial Analyst certification, plus experience working in the investment management and investment software businesses. Ralph retired at the end of 2005. He is now 92 and still sharp as a tack.
Portfolio consistency was still an issue, so we implemented a system of actively rotating account reviews. Even so, too much information about our clients and their portfolios resided on different systems that couldn’t talk to one another. One system tracked portfolio holdings; another tracked monthly cash needs; yet another kept notes on other client requirements.
About five years ago, we became aware of new software that could combine this information. Miles Putnam, a student in need of a project to complete his master’s degree, was brought in to help evaluate the various packages. The software wasn’t sufficiently developed to meet our needs at that time, but it took just six months to purchase this software after we hired Miles as a securities analyst in 2010. This software finally brought the consistency we were looking for.
Pat Beach had been indicating she would retire at the end of 2010 so we started an exhaustive search for a replacement. Pat left big shoes to fill. Pam Parks came on board in the middle of 2010. Pam takes ownership of every challenge she is asked to handle. Her responsibilities include our client accounting software, human resources, bookkeeping, and client communications.
That same year, Maury called it a career as well. With a PhD in psychology, Maury always had insights into human nature. He brought a more personal element into the somewhat scientific endeavor of investment management. Maury had a calm and reassuring manner that resonated with all of us at the office and with our clients as well. And he could handle the math. Maury is a CFA just like Ralph Seger, Dan Boyle, Miles Putnam, and me. I visited Maury a couple of months ago and he looked great.
We’ve had several part-time people working behind the scenes over the years. Doreen Phelps has been with us since 1999, longer than anyone but me. She was trained by our beloved June Kirby, an early S-E staff member, prior to her retirement. If you move, have surgery, or lose a loved one, Doreen is the one who selects the flowers we send. She cares very much for this business, our clients, and our employees.
In 2011, we had a part-time opening following the retirement of Whitney Shapland after more than a decade with us. A referral from a mutual acquaintance led to the hiring of Terri Buchanan, who shares a job with Doreen. Our business is very complex for a small company, but Terri picked it up quickly. Her organizational skills and eye for improvement have made a big difference in our business.
Provident is still small, with five full-time employees and two part-timers. However, it is bigger than any one of us, whether that is Ralph Seger, Maury Elvekrog, or me. We are a team. Now we are the Provident team, a team of people working hard and providing carefully for your financial security every day. On behalf of the team, thanks for your support and your business.
Scott D. Horsburgh, CFA