Scarborough Capital Management has successfully transitioned its ownership to a team of managers and is now concentrating on growing its retirement advisory service, says Gregory Ostrowski, one of the new partners.
Scarborough, an Annapolis, Md., independent financial planning and investment advisory firm, was founded in 1989 by Mike Scarborough. He built the business largely on advising participants in 401(k) and 403(b) plans.
He recently retired to devote more time to another firm, Retirement Management Systems, which assists advisors whose clients are part of employer-sponsored retirement plans. A succession plan to transfer ownership to five senior planners has been completed.
The five successors are all in their 30s and the transition is expected to set the tone for the firm for the next 20 to 30 years, Ostrowski says. In addition to Ostrowski, the new partners are Ian Arrowsmith, managing partner, and Ryan Ansted, Jay Sprinkel and Shawn Walker.
All except Arrowsmith, who came from T. Rowe Price, joined the firm as interns while in college or shortly after graduating. Under the new management plan, Ostrowski and Sprinkel will be in charge of business development and marketing, Ansted and Walker will head up budgeting and finance, and Ansted and Sprinkel will handle IT.
“Each of us is dedicated to the mission of Scarborough Capital Management, which is to continue moving the needle and making a real difference when it comes to retirement for most working Americans,” Ostrowski says. The firm targets the mass affluent and starts its services at a modest $365 to $400 a year. Scarborough works with participants in approximately 125 plans in companies of all sizes.
Scarborough, which has $1.3 billion in assets under advisement and nine advisors, assists retirement plan participants in making decisions about investments, contribution levels and withdrawal rates.
The firm does not have a minimum and will help anyone who is serious about saving, Ostrowski says. Clients cover a range of ages, but the sweet spot for the firm, he says, are those people about 15 years away from retirement. Providing advice for managing employer-sponsored retirement plans often leads to a broader relationship with the plan participants and with other members of their families.
“Advisors at Scarborough feel strongly about starting to save early,” Ostrowski says. Future growth efforts for the firm will be focused on working with members of the Millennial generation, those born from the early 1980s to early 2000s, and establishing relationships with unions.
“The young people have seen their parents struggling and want to start saving,” the partner says. “The key is to establish good long-term behavior so they do not get too excited when the market is up or down but maintain good saving behavior.”