FOUNDER AND PRESIDENT, PATRICK R. WALLACE, COMMENTS ON COMPANY'S 20th ANNIVERSARY

May 10, 2023

Twenty years ago today, Covington Investment Advisors was incorporated. The success we have had with and for our clients has allowed us to grow, hire more talent, continually enhance our technology and research, purchase and expand our building, expand our overall processes to customize your financial plans, providing best in class investment management services and results and contribute to our communities' societal needs.

I do not hesitate to say we have formed the best-in-class advisory firm as we are not a broker dealer, nor are we affiliated with one. As an independent advisor, we have an open architectural structure to find the best financial solutions for you. We cut out all the unnecessary middlemen and their fees and we refuse any form of commissions. We are a fee-based only advisory firm. We do not sell products; we provide customized financial plans structured and managed on a separate account basis driven to address your individual investment and family needs. As a federally registered investment advisor with the Securities & Exchange Commission’s (SEC) oversight, we are a corporate fiduciary held to the highest standard of care.

*2023 data as of 03/31/2023. The data for 2023 illustrates regulatory and non regulatory assets under management: $596 is regulatory and $35 is non regulatory. Prior year show only regulatory assets under management. Due to rounding, not all numbers will add correctly.

The growth of the firm speaks to our results over the past twenty years. All one hundred and ninety-three family relationships we now manage are the result of referrals made because we took care of our clients one at a time carefully facilitating each individual’s financial, succession and generational estate plan while generating attractive investment results through various market environments.

So, thank you for your confidence in our services. Thank you for believing in our small private business model. Going forward please know that we intend to maintain the same commitment to use our net income each year for technology, hiring more people, continuing educational programs, hiring interns from our local business schools to groom the next generation of advisors as well as to continue to provide a comfortable office environment for our employees.

I have no intention of monetizing Covington. Selling it off for personal gains would violate the philosophical connection of our commitment to provide a multi-family private office for generations to come. I have assigned my 100% ownership to a Trust which will hold and protect the ownership indefinitely, not putting any pressure on our employees or my family to have to buy or sell the ownership shares. Also, more importantly, to allow us to fulfill our commitment that we will be here to maintain our clients' investment management philosophy meeting their investment needs for not only their immediate families but their grandchildren and great grandchildren. We are also committed to the ten perpetual private family foundations that we manage for philanthropic initiatives established by our families and our clients.

I am often asked by prospective clients if I have a minimum investment amount. My response has always been no; I have a philosophy and if we connect philosophically about how to manage your assets effectively, we will be successful together. Our philosophy of addressing investment management needs from a planning perspective maintained by customized financial plans, understanding the capacity of each client's unique situation and developing a disciplined investment structure process has assured our clients' investment and overall financial success.

Behind every great company is a great story, a great brand and great people! I want to thank my wife Kim for her unwavering support all these years. When I advised her of my desire and reasons to break away from the big corporate banking structure, she did not hesitate to say go do it! In founding Covington, the name which originates from my beloved birthplace of Covington, Virginia, we were self-funded from our personal savings. I did not have a paycheck for eighteen months as we started from scratch. I want to express my heartfelt thanks to our staff, Cindy Jones who serves as our Portfolio Manager and Chief Compliance Officer, Hannah Patton our Client Services Administrator, Nick Allen our Research Analyst, and MaKenzie Maust our Office Manager. Additionally, I would be remiss not to mention our retired Office Manager, Alma Johnson. None of this would have been possible without their passionate and professional commitment to see us succeed in meeting your investment management and financial service needs.

I have to thank my board of advisors: John W. Britton, President of Marina Holdings Limited and Retired President of Pepsi Cola Bottling in Erie, Pa., Christophe L. DiFalco, Esq. and Federico E. Fernandez, Esq. my corporate attorneys, my late father in law Dick Dickert, retired principal of the Elliott Turbine Machine Company, James N. McKibben, of Lillis, McKibben, Bongiovanni & Co., Matthew J. Minnaugh and Dan Sloppy, CPAs of Schaffner Knight Minnaugh & Co., my corporate accountants, Scott Turer of Three Rivers Marine and Rail Terminals and Fritz Teroerde, retired chairman of ELG Metals. This advisory board was formed to serve as a business resource, and I look to them as my supervisor. Although I do not share any client information with the board nor do they have any ownership of the company, the board meets periodically to review the company operation and provides business input to ensure the ongoing success of the corporation. All entrepreneurs, your advice has been invaluable and has played an integral role in our company’s success. Thank you.

We work almost exclusively with people in business and families who have earned their fortunes by providing their fellow man with valuable goods and services. The lives of these entrepreneurs, their customers and employees have been enriched and in turn they have contributed to the improvement of their communities.

Publisher E. W. Howe stated that “The real American hero is the man or woman who, in spite of a poor home, poor schooling and residence in a poor neighborhood, becomes a successful and useful citizen who somehow acquires politeness, education, and appreciation of the world's important lessons.”

In America we still have that opportunity. Legal immigrants still come to our shores with their longing for freedom and the opportunity to improve their lives and the lives of future generations.

Yet, in pop culture and under the current WOKE environment the business owner is often portrayed as evil and greedy and a young person pursuing a career in business, as I was, is portrayed as ambitious, self-centered and unenlightened.

These distorted representations do a great dis-service since the truth is that business is the most essential activity contributing to the welfare of the human race.  Day after day enlightened self-interest motivates people to fairly, honestly and peacefully exchange money for the goods and services they need and want. 

I say hail to the entrepreneurs that create and innovate to improve processes and products in the midst of the hard knocks world of competition.

The free market system is what ensures continual progress and improvement. Complacency doesn’t last long when a dynamic marketplace is demanding better, faster services and more well designed and durable products. The consumer benefits from better products and lower prices and the business enterprise profits and pays the employees and investors.

Consider that the vast majority of the people of the world throughout history were impoverished and controlled through plunder and violence. The market system and free trade has vastly improved the life of the average person and continues to inspire people around the world with a vision for a better future.

The satisfaction experienced by entrepreneurs as they develop their ideas, take risks and financial responsibility and build their enterprises is very satisfying and, if everything works out, financially rewarding.  The benefits derived by everyone else from the entrepreneur’s effort should be appreciated and extolled not vilified as it often is on campus, in the media and, as we see currently, in the arena of combative politics.

I agree withJohn Mackey, Co-Founder and Co-CEO of Whole Foods Marketwho has declared that “Capitalism is a source of value.  It’s the most amazing vehicle for social cooperation that has ever existed.  And that’s the story we need to tell.  We need to change the narrative. From an ethical standpoint, we need to change the narrative of capitalism, to show that it’s about creating shared value, not for the few, but for everyone.”

Business is not about the pursuit of the almighty buck.  Business is about the betterment of the Human experience.

 

 

Commentary Disclosures: Covington Investment Advisors, Inc. prepared this material for informational purposes only and is not an offer or solicitation to buy or sell. The information provided is for general guidance and is not a personal recommendation for any particular investor or client and does not take into account the financial, investment or other objectives or needs of a particular investor or client. Clients and investors should consider other factors in making their investment decision while taking into account the current market environment.

Covington Investment Advisors, Inc. uses reasonable efforts to obtain information from sources which it believes to be reliable. Any comments and opinions made in this correspondence are subject to change without notice. Past performance is no indication of future results.