At The Top - April 2000

Paragon Asset Management

Changing the way Las Vegas views investing

by Amy Sorensen

Putting your money where their mouth is can be an intimidating proposition, and many are afraid to rely in money managers to monitor their financial investments. Some fear they’ll have to pay exorbitant fees. Others worry they won’t know what is happening with their money, or that they might actually lose money in the transaction.

In such situations people are willing to rely on a bank they have used for years because it is convenient and comfortable— even though it might not be as profitable.

According to Ted Schlazer and Bob Kasner, principals of Henderson-based Paragon Asset Management Company, a business or individual could actually be spending more money with a bank or brokerage firm than with a private consulting firm. "It’s a lot less expensive to hire us to outsource [the work of investing and money managing]," said Bob Kasner, vice president and portfolio manager for Paragon. "The concept of receiving the best expertise without paying for a full-time employee is really gaining in popularity. The least a bank might charge a client to manage their money is about double or triple what we charge our clients."

"Many people assume that if their money is in a money market account with a bank, they are receiving the services for free," said Ted Schlazer, president and portfolio manager for Paragon. "Nothing is free. Those who think they’re getting a bargain by investing with a bank may not be coming out ahead. Banks make money by taking your money and investing it at a higher rate and giving you a percentage. Clients can invest in the same stocks themselves in which their bank is investing, without having to give up a large percentage to a bank." Paragon Asset Management Company is a fee-based registered investment advisory company, meaning clients pay a specified fee to have Paragon manage their funds.

"Our number-one objective is not to push products on our clients. We have no inventory," noted Schlazer. "We receive no kickbacks [from investing in certain products or stocks]. We are strictly fee-based."

Paragon Asset Management has been in the Las Vegas area since 1996, when Schlazer and Kasner put together the idea of a private investment company that would provide services for private individuals, corporations and public entities.

Both Schlazer and Kasner bring varied experiences to their company. Schlazer worked on Wall Street for firms such as Salomon Brothers Inc. and Kidder Peabody & Co., handling the government bond department and carrying out risk management duties. Coming to Las Vegas in 1991, Schlazer worked with different brokerage firms before joining First Interstate Bank as an investment officer Kasner is a CPA and a Certified Financial Planner (CFP) who started his career with Peat, Marwick, Mitchell & Co. He has spent 12 years with local government, holding such posts as finance director for the city of Henderson and director of accounting for the Clark County School District. Before starting Paragon, Kasner performed financial planning services for members of the Clark County Classroom Teachers Association. Eventually, Kasner and Schlazer joined forces and decided to tap a niche they knew wasn’t being serviced: local government.

"Less than four years ago I didn’t know of anyone in Clark County, the local city governments and the school district who was using an outside source to handle investing. For bonds and debt obligations they all used an outside consultant, but for investing it was a different story," recalled Kasner. "It’s difficult to find Wall Street expertise in this area, let alone pay someone with that kind of experience to remain on staff full-time. We also recognized that investments constituted the fourth largest source of income for local public entities, and no one was helping them manage their funds. Basically what we’re doing for local governments is helping to put more money into public coffers by helping them invest properly."

Paragon’s client base is comprised of approximately 80 percent individual investors, usually retired persons looking to help their money grow throughout their retirement. The remaining 20 percent are made up of corporate accounts, including the cities of Henderson, Mesquite and North Las Vegas, as well as the Las Vegas Housing Authority, the Las Vegas-Clark County Library District and some small local banks.

"People think that because they watch CNBC they can interpret the market," noted Schlazer. "It takes a lot more than just watching the market to be an expert. It takes the technological equipment and the experience in the market to interpret the data to really understand what’s going on with the market."

Paragon prides itself in having the experience, as well as the tools, to analyze the market and provide accurate information for its clients. Besides nearly 40 years of combined experience, Paragon’s principals have the technology, experience and links to Wall Street that help them stay on top of what is happening with the market.