Services

Introduction

Martin Capital Management, LLP was founded to serve the wealth management needs of high-net-worth individuals. Although we have grown our markets and services to include institutions and equity management, our primary passion remains as strong as the day we opened: developing deep relationships with our clients and working closely with them to fulfill their long-term financial objectives.

We could not effectively build these relationships without forging a strong bond of trust with our clients. We strive to nourish trust by making certain there is integrity in every activity we undertake, thus ensuring that our conduct is governed by the Golden Rule: We treat our clients as we would want to be treated were the roles reversed.

Hallmarks of Our Wealth-Management Services

Highly personalized service

The origins of our clients’ wealth are as varied as their personalities and life experiences. Sometimes it’s a retirement nest egg, stock options, or a divorce settlement. Other times it’s the proceeds from the sale of a business or an inheritance. We must understand our clients—their circumstances, needs, concerns, and dreams. We plan and strategize together over issues like estate planning, taxes, charitable activities, and decisions related to non-marketable and family-owned businesses. Whatever the situation, we seek the best formula to address the uniqueness of each client.

We write an Investment Policy, customized for each client, which details his or her current circumstances and future goals. In it we set the course for accomplishing those goals. We update the Investment Policy at least once a year.

We have a $5 million minimum investment so we can maintain a very low client-to-professional ratio (less than 20:1) that allows us to fulfill our unwavering commitment to meet the unique needs of all our clients.

We work closely with our clients’ other professional-service providers (attorneys, accountants, et al.), coordinating our activities to provide the best outcomes for our mutual client.

Our mandate: first preserve, then grow

We strongly believe that our first duty is to protect our clients’ wealth; our second is to grow it. These are not conflicting goals. By buying a few great businesses only when prices afford us a margin of safety—and high–quality, fixed-income securities when they don’t—we’re able to minimize the risk of permanent capital losses while enjoying the benefits of owning profitable, growing enterprises. 

Though our approach sounds simple, many don’t have the patience, discipline, and/or long-term perspective to practice it successfully. Wall Street and Main Street are crowded with folks who believe it’s about winning each inning, not the game. Not only does an inning-winning strategy differ greatly from a game-winning strategy, it often leads to losses. We won’t outperform the market every quarter, every year, or even every two years. But, over a full market cycle of five to seven years (the minimum time one should commit to equities), we believe, and studies confirm, that paying low prices for great companies is the surest way to win the game.

Dynamic asset allocation

While we work closely with clients to arrive at long-term targets for their equity allocation based on their risk tolerance and personal financial objectives, we believe that the level of equity ownership should be driven by the opportunities available in the markets. This is in contrast to most financial practitioners who maintain static asset allocations, regardless of relative attractiveness. If we cannot find worthy investment ideas, we’ll buy short-term Treasury securities or pre-refunded municipal bonds (depending on the tax status) until opportunities become available.

Confidentiality

A foundational principle at Martin Capital is the maintenance of confidentiality regarding our clients. We have built safeguards into all of our policies. For instance, you will never hear us referring to other clients by name or discussing their business affairs, nor will you see evidence of accounts or account balances left unattended.

Analyst as portfolio manager

At most large firms, one group does the research, one group makes up the “investment committee,” while yet another group oversees individual accounts. We believe that potential value to the client is diminished by putting each of these functions—research, investment decision making, and client service—into different “silos.” The extensive knowledge gained by researching a company better equips one to make purchase and sale decisions. Extensive knowledge of a client also can improve one’s investment decision making, just like being part of the investment committee can make one much better at client service. We feel it’s a virtuous cycle that results in better outcomes at each step of the process. As such, our analysts (most of whom are partners) comprise our investment committee, as well as manage client portfolios. Clients of Martin Capital can call at any time and discuss their holdings with the folks who know the companies best.

A focus on after-tax returns

A wealth-management approach designed for wealthy individuals must give due recognition to the impact of taxes and inflation. It’s common practice to compute and compare investment performance on a pre-tax basis, even though identical pre-tax returns can have radically different after-tax results. We measure our investment success by our ability to increase portfolio value after inflation and taxes. Given our long-term investment orientation, our clients benefit from the tax efficiencies inherent in a portfolio of growing companies with relatively low turnover.

Equity Management

While wealth management is our heritage, many of our clients come to us having already developed a financial plan and, either independently or through an intermediary, established their asset allocation. These clients ask us to manage all or a piece of their equity portfolios because they like our unique equity investment philosophy, and they like having direct access to the team of analysts researching the companies.

Because our equity-management clients come to us with a financial plan in place, we work with our clients to ensure that our piece of their investment puzzle fits snugly with the rest.