Ethical decision-making underpins CapWealth approach

Tim Pagliara, founder, chairman, and chief investment officer of CapWealth, takes inspiration from the late Peter Drucker’s management wisdom to underscore his client-centric approach. In short, it prioritizes the client’s best interests over transactional gains.

CapWealth, a wealth management firm based in Franklin, Tennessee, emphasizes ethical decision-making, client-centered services, and the importance of financial education. Pagliara founded CapWealth 24 years ago following successful stints at Edward Jones and Hilliard Lyons.

“The value that you add to a client relationship doesn’t necessarily coincide with trading a security. Sometimes the best thing you could do is talk somebody out of trading a security,” Pagliara says. 

CapWealth’s commitment to transparency and integrity is evident in its comprehensive reporting system, which allows clients to see the details of all their investments in real time. This has been integral to creating a successful client experience, allowing clients to assess CapWealth’s performance against various benchmarks.

“We’ve invested millions of dollars into that process – our clients know exactly how much they invested, how much they’ve withdrawn, what the time-weighted return is, what their fee structure is, and it gives them a lot of tools to evaluate us,” Pagliara says. 

Pagliara has also contributed significantly to national conversations about responsible government spending and small business growth. His involvement with the Main Street Growth and Opportunity Coalition and the Committee for a Responsible Federal Budget reflects his deep commitment to these issues. However, he expresses frustration with the lack of progress, particularly when it comes to federal budget management, and highlights the urgent need for leadership in addressing these challenges.

“In 2019, we were less than $20 trillion in debt. Now we’re $33 trillion in debt, and we’re further away from acting responsibly on the federal budget than we ever have been,” Pagliara says. 

The national debt can limit the economy’s ability to grow, and, eventually, future generations will be on the hook for these bills. Government spending needs to be responsibly managed, and right now, spending is increasing at an alarming rate with no signs of slowing down, he says.

Pagliara’s passion also extends to financial education and social responsibility, emphasizing the importance of teaching young people about money, stewardship, and long-term success. 

He believes that communication is key in the investment business. “Our conversations with clients are incredibly important,” Pagliara says. “Just over the past few years, we’ve encouraged clients to avoid the temptation to sell their stock holdings when the market is at its low point [and miss out on the market’s recovery], and we’ve advised them to avoid investing in the latest fad like meme stocks or overvalued technology stocks that don’t make any money. A significant portion of our job centers around communication, in addition to money management