I was seven years old the day I walked into the downtown Los Angeles office of A.M. Clifford Associates. Eighteen years later and fresh out of college, I began my first real job at Clifford Associates in Pasadena. A.M. “Tony” Clifford II took me under his wing and introduced me to the investment counseling profession—first pioneered in the United States in 1915 by his grandfather—which I would become passionate about in the coming years. Having been raised in a home where integrity ruled, Clifford’s message of integrity resonated with me. Tony never tired of reminding me and my colleagues that we were there to serve our clients whose interests always came first. We had no products to sell; we simply provided investment advice to our clients. As someone who has spent my entire career with this unique firm, it is my privilege to share a bit about our history, some of which I learned from Tony over the years.
“A.M. "Tony" Clifford II took me under his wing and introduced me to the investment counseling profession—first pioneered in the United States in 1915 by his grandfather...”
A.M. Clifford graduated from Yale in 1904 and subsequently returned home to St. Louis and joined a brokerage firm. In 1911, he moved permanently to Pasadena and set up his own shop in Los Angeles, primarily as a stock and bond dealer. He was approached in 1915 by a woman who had inherited a $30 million estate and engaged his services to analyze her security holdings and provide investment recommendations. A.M. Clifford recognized that major undertaking as the origination of his investment counseling days and henceforth served investors on a purely professional and advisory basis. In 1921, after much soul searching, he formalized the path he had undertaken in 1915 by announcing he would cease to act as broker-dealer permanently and would instead serve exclusively as an investment counselor.
As for many other professionals in the business, the 1920s proved challenging for A.M. Clifford. In December 1928, believing financial equilibrium had been lost in the market, he wrote his clients and recommended they divest themselves from the stock market—a bold move many people considered foolish at the time. In October 1929, the stock market plunged and the Great Depression ensued, taking stock prices down nearly 90% from their 1929 highs. In 1931, A.M. Clifford reversed his earlier recommendation to clients and advised they begin to accumulate common stocks, even though prices continued to drop—another bold move considered foolish at the time. By 1932, all losses in his portfolios had disappeared.
During the 1920s and into the 1930s, he feared others might tarnish the growing reputation of his new profession. In 1933, in response to the excesses of the 1920s, the U.S. Congress created the Securities Exchange Commission (“SEC”). In 1936, the SEC began a survey of the investment advisory field. Wary of what could follow and recognizing the need for the industry to establish standards, A.M. Clifford in Los Angeles and another investment counselor in New York set out to create professional associations for investment counselors. The New York gentleman’s idea centered upon creating an association of investment counseling firms, while A.M. Clifford’s idea was that individual counselors should attain membership, but only after successful completion of a rigorous exam. In 1937, A.M. Clifford and his contemporaries formed the Investment Counsel Association of Southern California. The Investment Counsel Association of America followed and survives to this day as the Investment Adviser Association (“IAA”). Were A.M. Clifford here today, I believe he would enjoy reading the first bullet of the mission statement of the IAA which reads as follows: “… to be the leading industry organization: Promoting high standards of fiduciary duty, integrity, public responsibility, and competence in the investment advisory profession …”
"...recognizing the need for the industry to establish standards, A.M. Clifford in Los Angeles and another investment counselor in New York set out to create professional associations for investment counselors."
During the 1940s and the 1950s, many talented professionals joined the firm A.M. Clifford had founded. Among them were A.M.’s son, Henry, and another young man by the name of Philip V. Swan. Some of these professionals remained with the firm and others moved on to form their own businesses. In the 1970s, Henry, his son Tony, and a childhood friend of Tony’s, formed the partnership which later became known as Clifford Associates. In the early 1980s, the firm left downtown Los Angeles permanently and relocated its office to Pasadena.
In 1982, Phil Swan founded his own investment counseling firm, Philip V. Swan Associates. Clifford Associates and Philip V. Swan Associates remained friendly competitors for the better part of thirty years. Both firms were located in Pasadena, both served high net worth individuals and nonprofit organizations, and both consulted with many of the same professionals who advised their clients. More importantly, both firms shared the same heritage and could trace their roots back to the founder of our profession, A.M. Clifford.
Over the years—and more than once—Clifford and Swan considered joining forces. However, for one reason or another, all efforts to combine never came to fruition. In 2007, the two firms decided to merge and become who we are today: Clifford Swan Investment Counselors.
As I reflect on my thirty-two years with this firm, I realize the values which once drew me to it as a young college graduate have withstood the test of time, and more importantly, those values are instilled in the people of this firm. My colleagues and I clearly understand our primary duty is to serve our clients and to honor the trust our clients place in us.
"As I reflect on my thirty-two years with this firm, I realize the values which once drew me to it as a young college graduate have withstood the test of time..."
A.M. Clifford would take pride in knowing that, even if the tools of our trade have evolved significantly over the past century, his investment philosophy—one he believed in so passionately—remains in place. To this day, we believe in purchasing high-quality investments on behalf of our clients and owning them for the long term. Rather than limit our service to managing money on behalf of our clients, we instead counsel them across all other areas which affect their finances—same as we always have since 1915.
Fortunately, we have the distinct privilege of having served multiple generations of the same families for decades. Doing so has enabled us to not only get to know our clients and their families well, but to understand the underlying dynamics of those families, and as a result, serve their long-term family goals.
Finally, when it comes to the collection of people who make up this firm, we take pride in knowing we collected each and every one of them one person at a time. For the great majority of us, this firm is our final destination—the capstone to our respective careers. We hold each other accountable. In serving our clients, integrity remains first and foremost. And in doing so, we honor the remarkable legacy A.M. Clifford entrusted us with one-hundred years ago.
Download Article: A One Hundred-Year Legacy
