Optimizing Fixed Income Accounts with IMTC: An Interview with Mike Carmichael

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The IMTC team sat down with Mike Carmichael of Carmichael Financial to learn more about his experience as an IMTC client. Watch the full video interview or read the transcript below.

Learn more about Carmichael Financial here.

1. Tell us about your firm.

Mike Carmichael: Carmichael Financial started about 22 years ago. It started in Logan, Utah and expanded to three other branch offices in New Jersey and then also in Arizona. So, we started kind of focusing on just single families, individuals, and then expanding that to small businesses, and business owners.

We’re somewhat of a small shop. We’re really concentrating more on the financial planning aspect, meaning that we’re really getting in tune with the client or the clients’ families to try to figure out what we’re trying to accomplish. Where are we trying to go? Just like all financial advisors out there, we’re more of the GPS of the world, right. So that’s where we start. We’ll start developing that roadmap, that plan and then out backward engineer, what we have to fill in, what type of gaps do we have to fill in? Fixed Income absolutely is a big part of that.

2. What challenges did you have at your firm that led you to explore new technologies?

MC: So I’m a big fan of not being stagnant. I tell my staff and employees that if we’re constantly doing the same thing over and over again, then the clients will tend to not get bored, but they’re wanting me to make sure that I’m keeping up with new technology and they’re wanting me to make sure that I’m doing my fiduciary responsibility.

So I’ve learned that throughout the years to adapt new technology, to adapt to are trying to come up with different ways that we can maybe solve a problem or efficiency.

I try to look at options on a regular basis. But like everyone else, where we tend to get into a little bit of a rut and be very comfortable with some of the technology that we have. However, I do think that that’s a problem. So it’s not on a day to day basis, but on may be a year to a year and a half basis, we are trying to adapt new technology.

Before we made the decision to bring the platform on board, we would actually rely on our broker dealers in either bond desk or expertise and one situation happened where the lead trader for municipal and corporate bonds, he was retiring. So that had a huge gap in our firm, meaning that we couldn’t go and call the trade desk to try to get ideas or try to get help to build portfolios or fixed income portfolios. So that gave me a reason to kind of search and fill that gap. And IMTC definitely filled that gap.

3. How did you manage money prior to bringing IMTC to your firm?

MC: I did utilize many third-party money managers to allow them to make those decisions the buys and sells of fixed income. And then also we were individually hand selecting fixed income bonds, and individually hand selecting fixed income bonds can be challenging, also time very time consuming.

If we’re going to third party money managers, someone has to pay for that. And I’m all about reducing my clients’ fees. Hence the reason why I like individual bonds, individual stocks, so the platform really worked out well for me.

4. Why did you choose to bring IMTC to Carmichael Financial?

MC: We really wanted some type of platform that would make it more efficient to make it a little easier for us to select those bonds. And that’s one thing I loved about the platform was it would give us those types of selections that we could throw many different bonds in the platform and come out with these are the best bonds fit for this particular portfolio.

So one thing that I liked about the platform was it took some of the guesswork out of out of trying selecting fixed income and bonds. It actually put some guardrails and some and some quantitative type of reasoning to actually select individual bonds and fixed income. So, again, I don’t like to be stagnant.

We’ve looked at several different platforms out there but one thing I loved about the platform was the fact that it allowed me to still have some hands-on control on barriers and guardrails. Like I mentioned before, we have three different offices in three different regions. So I’m a little bit of an odd duck that way. Most financial advisors if they have multiple offices would have it in the same state. I’m not that way. Meaning I’ve got multiple clients in different states. So I was able to tailor the platform into the where the client live which was be a big attribute for municipal bonds, right. So we’re able to kind of build a sample, build a template just for New Jersey clients just for Arizona clients and so forth.

So yeah, so the customization aspect really was kind of a selling feature for me so we could actually build that platform.

5. What do you like about using IMTC at your firm?

MC: Yeah, so that’s one thing I liked about the platform and kind of a criteria for me is we were able to analyze on an review basis or not a review basis on a quarterly basis for particular clients to say again, these are the changes that we need to make whether it be buys or sells you know the income as is generated as such where we can add another bond, percentage wise inside the portfolio. It was really us acting more as the portfolio manager inside the fixed income realm that the only way that we were able to get there was this particular platform.

So I you know, again, I really liked how the platform was we’re able to customize it for our shop, for our different regions, if you will. So I rely heavily on my team to provide me the information. One thing I was looking for was that the platform that we decided to go with was the fact that a team member could do some of the lion’s share of the data entry. Some of them was coming up with reports then to kind of show me know this is what’s going on with this particular portfolio. One thing I think that we were lacking and I think a lot of financial advisors are lacking as well is the fact that they’re not fine tuning or don’t have a way to fine tune their fixed income portfolio. So we’re able to on a review basis or a semi-annual basis, go into that portfolio and then see if we need to fine tune it or tweak it. Where I think that some financial advisors out there, once it’s set, it’s kind of done right. And we don’t kind of go back where we need to kind of address family economic changes and so forth. We need to address those changes inside the portfolio.

6. How are you using IMTC?

MC: So how we’re really using it and through the review process. We’re really kind of bringing in the reports to show the clients or the client’s families. This is the structure, these are the types of bonds that we built inside the inside the portfolio. We’re able to carve out the fixed income away from the equities and really zero in on the fixed income and talk about that during the review meetings. So that’s been a huge benefit. And it actually has moved us up kind of a leg up from other financial advisors that don’t have that capacity.

There’s one dedicated team member that really focuses on the platform, but she and I collaborate together to make decisions on what to buy, what to sell, whether it be just prior to review meeting, or through periodic review, internal review.

The Optimizer for me is a huge benefit on the count that it’s really time saver. So I would do a lot of research or my team would do a lot of research. This has taken that part out of the equation. Not to mention, there’s a little bit of research involved but not as heavily as was before. So that Optimizer will kind of run through that template that we’ve already built for different regions. And then really zero in on the bonds that we’re buying or selling. So it really optimized our prep time for review.

So the prospecting tools, in a way we’re just using just like the review meeting. So we’re able to carve out the fixed income and show that prospect, this is what we’re really zeroing in on and right now no one, no prospect that I’ve run across his has seen this type of tool or this type of dedication to a fixed income portfolio. So it’s really kind of brought us a little ahead of other financial advisors out there that don’t have access to these types of platforms.

So we were using Emoney, we’re using Allbridge and One View. Morningstar, Bloomberg. So the IMTC, platform really adapts well and correlates well in all those platforms.

7. How is the platform a competitive advantage for you?

MC: There’s two different things that really are going to set the advisor apart. One is fees. Every financial advisor out there for last maybe 10-15 years know that fee compression is going to happen. And it’s going to be very difficult for advisors to raise fees in lieu of what third party money managers might actually charge. So this platform allows us to be very fee competitive because we don’t have another third party involved. We’re actually managing the assets. Also it brings in light of this is what our firm is actually doing. We can actually quantify, how we’re doing it, how we’re specifying each bond that we’re selecting, running it through the optimizer to say these are the bonds in fixed income that we need to add to the portfolio, and these are the benefits.

So in the future, I’m really hoping to present the platform to potential clients that in a way where they haven’t seen this before, they haven’t experienced this type of level or detail from a financial advisor that would go through their bond and fixed income portfolio the way that IMTC would. So I’m hoping to compare myself to other advisors that haven’t necessarily taken that step to bring that platform inside their firm to put side-by-side, apples-to-apples a comparison of what we do versus other financial advisors. In my heart, I think that this platform will then elevate me or draw a distinct line between our firm and maybe other firms out there that don’t have it.

8. How has your firm and your clients benefitted since onboarding IMTC?

MC: So I think the tangible benefits are one it’s a huge time saving for me and then also my team, that’s the first thing. The second is really developing more of a client relationship because we are taking it to the next level where the other advisors out there or not, or they’re sticking to what they either have currently, or using third party money managers and trying to manage the managers. So we’re able to bring in an aspect of really managing the portfolio in house.

Yeah, so I think our clients really appreciate the fact that we’re really kind of trying to give them an advantage of where they are for their investments, their portfolio, their fixed income portfolio. The reports that come out from IMTC is phenomenal. So we can break things down, show the client exactly where they are, what bonds they hold. It’s better than some of the other reports that we have might be from Allbridge or OneView.

9. What has your experience been like with the IMTC team?

So they couldn’t give you enough kudos for the IMTC. Everything that we have for questions get immediately answered, as far many questions for the platform itself, or any help we need. It’s stellar.