Daily News Analysis
Published: April 02, 2013
By Eliane Chavagnon - Reporter
Withers Bergman ramped up its offering for clients with complex cross-border tax affairs with a new partner on the team.
Patrick Cox joined Withers Bergman’s international corporate tax group from Brown Rudnick, where he was chair of the firm’s tax group. He helps clients develop effective tax strategies for cross-border and domestic business transactions. He works with clients such as businesses, investors and financial intermediaries.
Steve Barimo joined AM Global Wealth Management as a founding partner, co-owner and manager.
Barimo was previously the chief marketing officer and head of business development for GenSpring Family Offices, where he oversaw these efforts between 2001 and 2012. At AM Global he will work with founder Andrew Mehalko on leading the firm and making strategic, investment and operating decisions.
Before joining GenSpring, Barimo was president of Sageworks, a financial advisory software firm, which he joined after a decade in investment banking. He started his career at Lehman Brothers in New York City.
Los Angeles, CA-headquartered Aristotle Capital Management took on Sandra Incontro as a portfolio manager and managing director. Incontro’s areas of expertise include research, risk management, client service and operations.
Incontro has worked in the investment management industry since 1993 and was latterly president and portfolio/relationship manager at Metropolitan West Capital Management.
Prior to that, she served as a vice president and senior investment strategist at Strong Capital Management; as a senior portfolio analyst at SSI Investment Management; and as a senior associate at Wilshire Associates.
Bank of the West promoted Edward Mora, who is responsible for leading the firm’s Orange County’s wealth management team, to senior vice president.
Mora has over 20 years of experience advising affluent and high net worth business owners in the areas of wealth planning, investment solutions and private banking.
Texas-based Houston Trust Company, the trust and investment management firm, appointed a new chief executive, chairman and chief financial officer.
CEO Lee Lahourcade succeeded William McCain, who retired after 20 years at the firm. Meanwhile, James D’Agostino was named as chairman of the board, while Stephanie Pollock joined as CFO.
Lahourcade has over 30 years of investment management and research experience, including over ten years in executive management at Vaughan Nelson, a Houston-based investment firm.
D’Agostino retired as chairman and CEO of Encore Bancshares, following its sale in 2012. He has over 40 years of experience in banking, wealth management and insurance, including 13 years with American General Corporation and ten at Citibank.
Pollock was latterly a senior vice president, comptroller and chief accounting officer at Encore Bancshares, prior to its acquisition. She is a certified public accountant and has over 15 years of industry experience.
US Trust, part of Bank of America, appointed Ty Schlobohm, a whistleblower in the Trevor Cook Ponzi scheme, as a private client advisor and senior vice president in Minneapolis, MN.
Schlobohm is known for helping the Federal Bureau of Investigation gather evidence against Cook, who pleaded guilty to mail and tax fraud in the summer of 2009 and was sentenced to 25 years in prison for leading what “ultimately became a $160 million swindle.”
Prior to US Trust, Schlobohm worked as a portfolio manager at New York-based G2 Trading, and before that as a managing director at Cherry Tree, a financial advisory firm offering investment banking, investment management and wealth management services.
BNY Mellon Wealth Management ramped up its teams serving the Florida and Pennsylvania markets.
In Miami, FL, Michael Cabanas joined as a senior director. He reports to Craig Sutherland, BNY Mellon Wealth Management’s southeast US president, and Tim Goering, managing director of Florida sales.
He spent the past seven years as a managing director at Fiduciary Trust International, and between 2000 and 2006 was a private banker at JP Morgan.
Meanwhile, further north in Philadelphia, McBee Butcher joined the firm as a senior portfolio officer. He reports to portfolio team leader Arnold Johnsen.
Butcher has about 20 years of experience in financial services and investment management, most recently as a senior portfolio manager at McCabe Capital Managers, and a vice president at Drexel Morgan & Co.
HighTower added MK Wealth Management, an advisory team in Long Island, NY, to its partnership.
MK Wealth Management’s principal, Mark Kravietz, has over 25 years of experience in the financial services sector, most recently at UBS Financial Services. He joined HighTower as a partner and managing director.
Kravietz manages $300 million in assets for affluent families, individual clients, closely-held businesses and non-profits. He specializes in asset allocation, liability and estate planning, and portfolio construction. Other members of his team include Catherine Crunden, a senior wealth management associate, and Stefanie Andors, a senior analyst.
BMO Harris Private Banking, part of BMO Financial Group, named Jennifer Muench as a vice president and managing director in British Columbia.
Muench will be responsible for implementing the overall business strategy for BMO Harris Private Banking in British Columbia - including BMO’s Asian private banking business - and will oversee its trust, banking and investment operations.
Northern Trust named W Brett Rees as head of wealth management for the mid-Atlantic region. He succeeded Joanie Stringer, who relocated to Miami, FL, to serve as a senior wealth strategist focused on business development.
Rees will be based in Washington, DC, with oversight responsibilities for the firm’s business spanning Virginia, Maryland, Pennsylvania and Delaware. He will lead a team of around 30 financial services professionals including portfolio managers, bankers, trust advisors and wealth strategists.
Meanwhile, Rees will also head up Northern Trust’s foundation and institutional advisory services on the East Coast. This unit provides investment services to small- and medium-sized foundations and non-profit organizations. He will report to Dave Blowers, executive vice president and head of the eastern region.
Rees spent the past six years at Northern Trust as national sales director for wealth management and has worked at the firm for 16 years overall. Before joining Northern Trust, he held a variety of wealth management and commercial banking positions at Bank of America, Bank of Boston and Wachovia.
RBC Wealth Management brought in Michael Melton as branch director at its San Diego, CA, office. The move expanded the Canadian bank’s presence in Southern California, which includes offices in Beverly Hills, Century City, Escondido, La Jolla, Long Beach, Newport Beach, Pasadena and Manhattan Beach.
Melton has over 20 years of industry experience and joined RBC Wealth Management from Morgan Stanley Smith Barney (now Morgan Stanley Wealth Management), where he was most recently complex director of the San Diego and Palm Desert market.
New York-listed Genworth Financial added its tenth board member in the shape of former senator Kent Conrad, who joined as an independent director.
Conrad served as a US senator representing North Dakota between January 1987 and January 2013. At the time of his retirement from the Senate, he was chairman of the Senate budget committee.
Boston Private Bank & Trust Company made a number of leadership changes, in a move affecting staff in senior management and market leadership roles on both the East and West coasts.
Mark Thompson, chief executive and president, said the decision to redefine the roles is part of the bank’s growth plan in the areas of wealth management and private banking.
New roles at the bank included:
•James Brown, executive vice president, director of commercial banking and credit management;
•Gisela LoPiano, senior vice president, chief lending officer - East Coast;
•Robert Nentwig, senior vice president, chief lending officer - West Coast;
•George Schwartz, executive vice president, chief operating officer;
•Torrance Childs, senior vice president, national director of deposit management;
•Mary Fischer, senior vice president, director of West Coast banking offices;
•Nicholas Hofer, senior vice president, West Coast business leader;
•Jeremy Parker, senior vice president, treasurer;
•John Sullivan, executive vice president, investment management and trust, and residential mortgage; and
•Elizabeth Worrick, senior vice president, national residential mortgage sales manager.
All of the individuals mentioned have worked there for some time.
Additionally, the bank added five individuals to its policy group, consisting of senior management and department heads who oversee the day-to-day management of the bank and set its overall policy and strategic direction.
They were: Thomas Anderson, senior vice president, chief investment officer; LoPiano; Nentwig; Parker; and Jennifer Willis, senior vice president, director of marketing.
JHS Capital Advisors, a dual-registered broker/dealer and RIA, appointed Allison Hanna as a financial advisor in Portland, OR.
Hanna will work alongside a team of advisors including Dan Mancuso, first vice president of investments, and Carrie Carpenter, a senior registered client associate. Hanna joined the financial services industry from the world of professional athletics, having participated in the Ladies Professional Golf Association tours since 2005.
She joined JHS’s Portland office, which was launched in July 2012 and is the firm’s second largest, with 20 employees, after its headquarters in Tampa, FL.
Heartland Bank and Trust Co created a wealth management division based in Normal, IL. Kim Larson was appointed as a senior vice president and will run the division. He previously ran the wealth management business for Citizens First National Bank in Princeton, which was acquired by Heartland.
He is relocating from Princeton to Bloomington-Normal this spring, while Linda Grove, a trust officer, will lead the Princeton team.
Deutsche Bank hired Raphael Zagury as head of key client partners and wealth investment advisory for Latin America – a new position at the bank.
Zagury recently left Bank of America Merrill Lynch and he is set to join Deutsche Bank in about three months, based in the bank’s New York office.
He reports to Dario Schiraldi, the London-based head of the global client group for Deutsche Asset and Wealth Management, and Ben Pace, chief investment officer of wealth management in the Americas.
In his new role he will work with ultra high net worth clients in Latin America on investments, with Mexico and Brazil being important UHNW markets within the wider region.
He joined Merrill in 2007 and was head of UHNW investment solutions. Before that, he was a vice president at Goldman Sachs.
US Bank’s Private Client Reserve, which targets clients with at least $1 million in investible assets, continued a raft of recent hires by adding Heather Borelli as a wealth management advisor in Naples, FL.
Borelli has over 20 years of experience in accounting, finance, trusts and wealth management, during which time she has worked primarily with high net worth families. Before joining PCR, Borelli served as senior associate of Well Fargo’s Abbot Downing office in Naples, where she managed client relationships for the Southeast region.
Atlantic Trust, Invesco’s private wealth management business, brought in Denise Whennen as a senior vice president and business development officer at its Chicago, IL, office.
Whennen’s appointment was part of a firm-wide initiative to invest in key growth regions, Atlantic Trust said. The Chicago office is the firm’s third largest and has over $2.2 billion in assets under management, as at end-December 2012.
In her new role Whennen will work on fostering new client relationships and strengthening associations with intermediary referral sources, alongside Jeffrey Jacobs, who leads Chicago’s business development efforts, and the client service teams.
She has over 28 years of industry experience, having previously served as a vice president and business development officer at RMB Capital Management. Before that, she was a vice president and financial advisor at Bernstein Wealth Management.
Los Angeles, CA-based wealth managers Aaron Cook and Bambi Holzer joined forces to launch Wealth and Income Management Group.
Wealth & Income Management Group provides financial planning, investment management, risk management, and estate and business transition services for individuals, families, corporations and foundations.
The firm has a presence in Beverly Hills, CA, and Newport Beach, CA, with a satellite office on the East Coast. It has around $100 million in assets under management.
Cook was most recently the co-founder of Steadfast Income REIT and founder of Steadfast Capital Markets Group, where he served as the president and chief executive to develop and launch the initial offering of shares in the REIT.
ACE Private Risk Services, the high net worth personal insurance business, named Robert Courtemanche as chairman and Mary Boyd as division president.
Courtemanche joined ACE in 2008 as division president of ACE Private Risk Services, while Boyd joined in 2010 as senior vice president and chief administrative officer of the division. She was appointed as chief operating officer in January 2012.
As chairman, Courtemanche will focus on long-term strategic issues and external relationships for ACE Private Risk Services. Meanwhile, Boyd will manage the day-to-day running of ACE Private Risk Services’ operations, including developing and executing near and long-term strategic plans.
Boston Private Bank & Trust Company appointed Patrick Kavey as a vice president and sales professional within its investment management, wealth advisory and trust services group.
Kavey has 12 years of investment management experience and will be responsible for new business acquisition to help the company expand in the New England area. He was previously a vice president at Fidelity Investments, before which he served as a vice president at BNY Mellon and Wellesley, MA-based GW & Wade.
Robert Reilly was appointed as chief financial officer of PNC Financial Services Group, with effect from the third quarter, when current CFO Richard Johnson retires.
Reilly has led PNC’s asset management group - which includes its Wealth Management, Capitol Advisors and Hawthorn Asset Management businesses - since 2005.
Reilly joined PNC Bank in 1987 and has held numerous management positions in investment and commercial banking. Prior to assuming his current role, he was deputy head of PNC Advisors.
Succeeding Reilly as head of asset management and joining PNC’s executive committee will be Orlando Esposito, who is currently corporate banking executive vice president.
Delaware-headquartered WSFS Bank reinforced its private banking business by appointing Denise Allen and Laura Phillips - latterly of Wilmington Trust - as portfolio manager and vice president/relationship manager respectively.
Allen provides client support in the delivery and maintenance of credit and deposit products in southern Delaware. Prior to WSFS, she spent 31 years at Wilmington Trust, which is part of M&T Bank.
Phillips serves WSFS Wealth Management clients, while also working to develop new relationships throughout southern Delaware. She was at Wilmington Trust for 35 years.
Meanwhile, the bank hired Bob Matsko - whose previous experience includes six years as a financial advisor at Merrill Lynch Pierce Fenner & Smith - as a vice president and commercial real estate relationship manager.
Bank of America Merrill Lynch confirmed the hire of two advisors from Morgan Stanley Wealth Management in Minnesota and New Jersey.
In Minnesota, Mark Johnson joined as senior vice president at the Bloomington office, which is managed by Mark Eckerline. He spent over 20 years at Morgan Stanley, where he managed some $192 million in client assets and produced over $2 million annually.
Meanwhile, in New Jersey Brian Moore stepped into Merrill’s Red Bank office, where Peter Ardolino is branch manager.
Talmer Bank and Trust, a subsidiary of Troy, MI-headquartered Talmer Bancorp, hired Mark Jannott as managing director and wealth advisor. Jannott will manage investment portfolios and provide investment advice to high net worth and private banking clients.
He has over 25 years of financial services and wealth management experience, having previously served as senior vice president and managing director of investment and estate planning at Greenleaf Trust, a Michigan chartered bank.
BNY Mellon made a number of senior management changes within its investment services business, as the New York-listed firm looks to enhance its presence and capabilities in the investment services space.
Samir Pandiri was named as chief executive of global asset servicing, reporting to Tim Keaney, global CEO of investment services. Pandiri was formerly CEO of asset servicing for the Americas.
Lou Maiuri is now deputy CEO of asset servicing globally, reporting to Pandiri. Maiuri will continue in his role as head of the global financial institutions group within the asset servicing business, as well as overseeing the alternative investment services group and the asset servicing Latin American business.
Meanwhile, Chris Kearns was appointed as CEO of depositary receipts globally, reporting to Keaney. He was formerly deputy CEO, before which he was responsible for this business in the Asia-Pacific region.
Michael Cole-Fontayn, who has overseen the global depositary receipts business since 2008, will now focus full-time on his role as chairman of Europe, the Middle East and Africa, and as an executive committee member for BNY Mellon.
Washington Wealth Management, a hybrid RIA firm, recruited a veteran advisory team to staff a new office in California’s Orange County.
Pearce Saunders Murray Wealth Management is made up of three advisors and has around $160 million in assets under management. It is the first team to staff Washington’s new 3,500-square-foot office in Brea, CA.
The latest team to have joined the firm is comprised of Janet Pearce, Bradley Saunders and Krista Murray, who all joined from Morgan Stanley. They work with wealthy individuals and institutions on investments, estate planning, and retirement and college funding, with a focus on fee-based business.
Janney Montgomery Scott relocated one of its senior vice presidents to Charlotte, NC, to build out its presence there.
Andrew Kistler, regional manager for the Southeast at Janney, joined in October 2012 and has been working temporarily at the Washington, DC, branch office. He moved to set up a regional hub in Charlotte, from which he will lead recruiting efforts.
He will work with Charlotte branch manager Stuart Singer, who set up Janney’s office in that market in 2003.
Homrich Berg, the independent wealth management firm based in Atlanta, GA, appointed Robin Aiken as director of the firm.
Aiken joined Homrich Berg in 2005, having previously worked at an independent financial planning firm for eight years. She has over 15 years of wealth management experience in the areas of investment planning, retirement planning, cash flow analysis and income tax planning.
New York-listed First Republic Bank added Reynold Levy - president of Lincoln Center for the Performing Arts in New York since 2002 - to its board of directors.
Levy was elected as a fellow of the American Academy of Arts and Sciences and is currently chairman of the board at the Charles H Revson Foundation, as well as a member of the board of overseers of the international rescue committee and a trustee of Iraq and Afghanistan Veterans of America.
Altius Associates, the private equity advisory and fund-of-funds firm, appointed William Charlton as a partner and head of US investments.
Charlton will be based in the firm’s office in Richmond, VA, and will report to Brad Young, head of investment.
Charlton joined Altius from the University of Texas at Austin, where he was a senior lecturer in finance and an associate director of The Hicks, Muse, Tate & Furst Center for Private Equity Finance. He has previously worked for consultants BH Equity Research and Context Private Equity Alpha, a fund-of-funds manager.
New York-listed Signature Bank brought in two private client banking teams to operate from a new private client office - currently being planned - in Staten Island, NY.
Larry Goldberg, group director and senior vice president, leads a four-strong team comprised of Flora Vavallo and Anthony Shafer - both associate group directors and vice presidents - and senior client associate Lauren Mattera.
The group joined from Citibank in Staten Island, where most of the team have worked together for about nine years. Goldberg has spent the past 18 years overseeing Citibank branches in Manhattan and Staten Island, most recently as a branch manager and senior vice president in Victory Boulevard.
Meanwhile, Guy Gioeli also joined as group director and senior vice president.
Gioeli also heads a four-person team who have worked together for almost five years at Citibank’s Hylan Boulevard branch, which is also located on Staten Island and is where Gioeli previously served as a senior vice president and branch manager.
Linda Mulroy and Annette Lucas-Thomas were both named as associate group directors and vice presidents within Gioeli’s team, while Shari Gutkin was appointed as a senior client associate.
BMO Private Bank, part of BMO Financial Group, added Bill Sperling, Patricia Bostrom and Bill McAleer to its local advisory board in Seattle, WA.
Sperling retired after 18 years with The Seattle Foundation, where he was the vice president of foundation affairs.
Bostrom had owned the Bostrom Law Offices in Seattle since 1988, while McAleer had been with Voyager Capital since he co-founded the company in 1997.
US Bank’s Private Client Reserve, which targets clients with at least $1 million in investible assets, appointed a senior portfolio manager and a trust officer in Minneapolis, MN.
Paul Springmeyer, senior portfolio manager, has over 16 years of investment experience and was previously a portfolio strategist within US Bancorp’s asset management group. In that role, he was responsible for the firm’s research and due diligence of investment vehicles including separately-managed accounts, mutual funds and exchange-traded products.
Before joining US Bancorp, Springmeyer worked at UBS Financial Services and Piper Jaffray.
Meanwhile, John Ostrand, a trust officer, will administer trusts for high net worth clients and coordinate financial, tax, investment and legal services for both his clients and trusts.
Prior to joining US Bank, Ostrand worked as a senior trust officer, portfolio manager and wealth advisor at US Trust’s Minneapolis office. He also spent several years as a branch manager at Charles Schwab & Co in St Paul, MN, where he also managed offices in Rochester and Sioux Falls.
Barclays’ head of wealth and investment management in the Americas, Mitch Cox, stepped down from the role after having been in the job since October 2009.
Cox left the role to “pursue interests outside the firm,” the bank said.
Based in Manhattan, Cox reported to Thomas Kalaris, chief executive of the bank’s global wealth and investment management business. Kalaris, who is also executive chairman of Barclays Americas, will run the unit until a replacement is found.
Joseph Field, of counsel at the law firm Withers Bergman, was appointed to the advisory board of Greenwich, CT-based Family Office Association, a global membership organization exclusive to single family offices and families of wealth.
Based in New York, Field’s practice focuses on structuring the affairs and estates of domestic and international families including family offices, wealthy entrepreneurs and celebrities.
He recently returned to Withers Bergman in New York, having spent the past few years in Hong Kong advising wealthy families in Asia. He is a registered foreign lawyer in Hong Kong as well as in the UK. He is admitted to the bar in California, Washington, DC, and New York.
BMO Private Bank hired Peter Koleske as a vice president and private banker in Milwaukee, WI.
Koleske has over 27 years of experience in the financial services industry and specializes in serving high net worth individuals, families and organizations.
While based in Milwaukee, Koleske will focus on the greater Milwaukee area, as well as Racine and Kenosha.
Morgan Stanley Wealth Management added a trio of advisors from UBS, bolstering its Park Avenue, NY, and Knoxville, TN, offices.
In Knoxville, Scott Sexton joined an existing MSWM team – The Venable Cantey Pruitt and Sexton Team – reporting to branch manager David Elias. He had prior assets of $173 million and production of $1.035 million. The team he joined manages around $700 million assets.
Guggenheim Partners expanded its real estate and infrastructure investment platform by introducing a dedicated North American infrastructure investment team.
The initiative is led by Henry Silverman, who joined the firm in early 2012 as vice chairman of Guggenheim Investments.
Silverman was named as global head of real estate and infrastructure, responsible for managing and coordinating activity for the firm’s entire real estate business.
The infrastructure team will invest across the capital structure including equity, structured equity and debt-related products, with an initial focus on core energy infrastructure assets in the US, Canada, Mexico and the Caribbean.
Miller/Russell & Associates, an RIA based in Phoenix, added seven members to its team. Four of the hires joined from GenSpring Family Offices.
Evan Judge joined Miller/Russell as a senior client associate on the wealth and investment advisory team. He was formerly a relationship manager with GenSpring.
Lia Whisler joined the firm as a senior client associate but mainly focusing on the institutional side of the business, where she will help manage retirement plans and foundations. She will also work directly with a few private wealth clients. She previously worked at Vanguard.
Matthew Walker joined as a client associate, responsible for providing investment advisory, tax planning, tax compliance and wealth management services to clients. Previously, he worked as a senior associate in the wealth management/tax preparation division for GenSpring.
Ron McKee joined as a senior client administrator. Previously, he spent around seven years with Inlign Wealth Management, which was acquired by GenSpring in 2008. At Inlign he managed the operations group for the western region.
Jessica Cobb was hired as a client administrator at Miller/Russell, after having spent more than six years with GenSpring in Phoenix.
In other hires, Lisa Cobb was appointed controller for the firm, having previously been a staff accountant for NPL Construction, and Brenda Bernardi was hired as business operations manager. Before joining, she was most recently director of operations at Ballet Arizona, and has been involved in the arts for many years in the area.
Glenmede hired Andrew Kirkpatrick as vice president of wealth advisory in its Cleveland office.
Kirkpatrick previously worked at Parkwood, a single family office and limited purpose trust company. There, he worked on estate planning with family members and provided fiduciary counsel and trust administration services to Parkwood Trust Company.
The Private Client Reserve, a unit of US Bank that targets high net worth clients with over $1 million in investable assets, hired Robert Stevenson as a managing director for Florida and a senior portfolio manager in Palm Beach.
Stevenson previously worked at Northern Trust, where he spent 14 years working with HNW individuals, families and foundations. He also previously worked within the personal and corporate trust departments at SunTrust Bank of South Florida.
Fiduciary Trust Company International, a wholly-owned subsidiary of New York-listed Franklin Resources, appointed Jeffrey MacDonald as a managing director and senior portfolio manager within its fixed income team.
MacDonald will manage fixed income portfolios for individuals, families and institutions. He has over 20 years of experience across all sectors of the global fixed income market.
Prior to his appointment, MacDonald was a senior portfolio manager at Cutwater Asset Management, where he oversaw a team that was responsible for some $15 billion in fixed income assets. He also previously co-managed 40 multi-sector portfolios at Hartford Investment Management Company.
Morgan Stanley appointed Chris Randazzo, latterly of Bank of America Merrill Lynch, to head technology for its wealth and investment management business.
Randazzo was most recently the head of technology for Bank of America Merrill Lynch’s Global Wealth and Investment Management business.
He will take over the Morgan Stanley role in the near future from Moira Kilcoyne, who was recently appointed chief operating officer of wealth management at Morgan Stanley. That role was previously held by Jeff Hack, who will become a senior client advisor focusing on client segmentation projects.
KPMG, the “Big Four” audit, tax and advisory firm, strengthened its alternative investment funds unit by adding two federal tax managing directors to its offices in Los Angeles and New York.
Nancy Chan is based in Los Angeles and has 25 years of experience in the financial services sector, including an earlier role as a senior manager within KPMG’s federal tax practice.
Most recently, she worked at Hellman and Friedman, a private equity firm, where she served as a tax director. In that role, she was responsible for tax planning and research, as well as participation in tax issues relating to acquisitions, restructuring and tax audits.
Meanwhile, Nader Karimi joined as a managing director of federal tax and asset management in New York. He joined KPMG from Goldman Sachs Fund Services, where he was the global head of tax and product development. Before that, he was the assistant vice president and global tax manager at HSBC Security Services.
Karimi will focus on expanding relationships with and serving hedge fund and private equity clients in areas such as the implementation of the Foreign Account Tax Compliance Act.
New York-listed Regions Bank named Anne Copeland as head of its private wealth management business.
Copeland will lead the firm’s banking, trust and investment management services to affluent and high net worth individuals and families. She will oversee a team of over 500 private wealth management associates.
She has over 30 years of industry experience and joined Regions Bank in April last year as an executive vice president, responsible for managing strategy and client solutions for the wealth management group.
Prior to joining Regions, she was an executive vice president and senior managing director for Wells Fargo’s wealth management group in Northern California. She also led the firm’s California investment management and trust unit and served as a senior vice president and director of fiduciary services.
Jim Boothe took over from Michael Mayfield as chief investment officer at Santa Barbara Asset Management, an affiliate of Nuveen Investments.
Mayfield, who joined Santa Barbara Asset Management in the mid 1990s, is retiring from the industry.
Boothe joined the firm in the 2002 from USAA Investment Management and will continue to manage his dividend-focused growth strategies.
OppenheimerFunds appointed Laton Spahr as portfolio manager of its Value, Select Value and Small- & Mid- Cap Value funds, with effect from March 11.
Spahr is responsible for all related strategies and will also serve as co-portfolio manager of the Oppenheimer Equity Fund. Spahr joined from Columbia Management Investment Advisors, where he was a senior portfolio manager for value and income strategies across institutional and retail investment channels.
He brought with him a team comprised of Eric Hewitt, Kyle Bergacker and Daniel Hozian, which he will lead.
Morgan Stanley Wealth Management hired Victor Camara - latterly of Bank of America Merrill Lynch - as an advisor in Miami, FL. Camara had been at Merrill for over 10 years and managed some $200 million in client assets.
Richmond, VA-headquartered RiverFront Investment hired Brad Wear as its director for the western region. Wear is latterly of Morgan Stanley Wealth Management, where he was a vice president and financial advisor in the Pacific Northwest.
At RiverFront, he will partner with Rutherfoord Ferguson, a regional sales consultant, to provide sales and marketing support to financial advisors.
Daily News Analysis
Published: March 28, 2013
By Eliane Chavagnon - Reporter
New York-listed Genworth Financial has sold its wealth management business for $412.5 million to New York-based Aquiline Capital Partners and San Francisco, CA-based Genstar Capital.
The sale by Genworth includes both of Genworth Wealth Management’s businesses: Genworth Financial Wealth Management, an investment management and consulting platform, and Altegris, a provider of alternative investments which has $3.47 billion in client assets. Genworth bought Altegris in 2010 for $35 million.
Aquiline, a private equity firm investing in the financial services sector, and Genstar, a middle market private equity firm, will combine their operational expertise and industry experience to help GFWM and Altegris increase their scale and capabilities, the firms said in a statement.
Specifically, the two firms will work with their respective senior management teams to enhance product development and technology offerings at GFWM, while expanding distribution channels and launching new alternative products at Altegris.
Jon Sundt is president and chief executive of Altegris, while Jeff Greenberg is CEO at Aquiline. At the start of 2013 Thomas McInerney started in his new role as Genworth’s president and chief executive.
In February, Reuters reported that Genworth was disposing the businesses due to “increased scrutiny from ratings agencies, largely due to losses in its mortgage business.” Later that month, the firm appointed its chief financial officer as executive vice president of the business, with responsibility for driving key strategies such as growing the wealth management business and creating more value.
Genworth’s wealth management business has some $20 billion in assets under management and sells its portfolios through about 6,000 third-party advisors across the US.
Aquiline and Genstar were advised by Deutsche Bank. The transaction, subject to customary closing conditions, is expected to close in the second half of 2013.
Daily News Analysis
Published: March 27, 2013
By Tom Burroughes - Group Editor
Ending months of speculation that it was spinning off parts of its non-US wealth business, Morgan Stanley said it is selling its Europe, Middle East and Africa private wealth management business in the UK, United Arab Emirates and Italy to Credit Suisse.
The financial size of the transaction, expected to be completed in the third quarter of this year, was not disclosed byMorgan Stanley. Credit Suisse said the acquired business had a total of $13 billion of assets.
The statements from both the US and Swiss firms did not spell out whether there will be any employment implications from the deal, such as job cuts to deal with any duplication issues. This publication has contacted both firms and hopes to elaborate on these issues in due course.
Morgan Stanley said the deal comes at the end of a strategic review of its EMEA private wealth management business.
“Under the plan, the firm’s Swiss private bank, Bank Morgan Stanley, will be more closely aligned with the firm’s institutional securities group, enabling the businesses to better meet international wealth management client needs. This move follows a similar realignment of the firm’s Asian PWM business with ISG,” it said in a statement today.
There has been widespread speculation in recent months that Morgan Stanley was looking to spin off its non-US wealth arm, a move that to some degree mirrors the decision over a year ago by Bank of America Merrill Lynch to sell its non-US wealth business to Julius Baer.
There had been a number of high-profile departures from Morgan Stanley’s PWM unit in the past year. For example, in July last year, this publication exclusively reported that Pavlos Bailas had stepped down from his role as head of private wealth management for Europe, Middle East and Africa at Morgan Stanley to pursue personal interests outside of the firm.
The deal also underscores how a number of private banks have been involved in merger and acquisition moves in the past year. In addition to this and the BoA Merrill Lynch – Julius Baer deal, Credit Suisse has sold part of its Clariden Leu business to Switzerland’s Falcon Private Bank; Quilter, the wealth manager, has merged with the UK’s Cheviot Asset Management in a mid-market deal; Canada-headquartered Canaccord, owner of Collins Stewart, has bought the UK wealth firm Eden Financial; and Generali, the Italian financial services group, is looking to sell its Swiss private bank BSI Group.
“The restructuring is a culmination of a thorough strategic review of our EMEA PWM business,” Colm Kelleher, president of the institutional securities group, said in a statement from Morgan Stanley.
“Our Swiss Bank is an integral part of our international wealth management offering, and by aligning the bank with our leading institutional franchise, we see considerable opportunities to better meet client needs and grow our international business,” Kelleher said.
In its statement,Credit Suisse said the $13 billion of client assets it had acquired was mainly held for people in the ultra high and high net worth segments.
“The transaction complements Credit Suisse’s leading wealth management business in Europe and reinforces the bank’s focus on growing its UHNW and HNW client segments. The acquisition will add scale to the bank’s core growth markets in EMEA including the UK, Italy, Nordics, Russia and the Middle East. In the UK market, the acquisition will significantly increase Credit Suisse’s client base, making the bank a top ten player and leading wealth manager,” the bank said.
The businesses acquired will be integrated into Credit Suisse’s private banking and wealth management division, it said.
“Accelerating our growth momentum in our international markets and in our UHNW client segment remains a key priority for Credit Suisse. Morgan Stanley has developed a strong foothold in wealth management over the past years and its high quality client base and experienced employees perfectly complement our ambitions to grow our share in these areas,” Romeo Lacher, head of private banking for Western Europe at Credit Suisse, said.
“The acquisition is structured as an asset purchase for the businesses involved. Subject to satisfying certain closing conditions, it is expected to close later this year,” it said.
Daily News Analysis
Published: March 26, 2013
By Harriet Davies - Editor - Family Wealth Report
Neuberger Berman Group, the money manager, has launched an income fund aimed at adding value through security selection and tax efficiency.
The Neuberger Berman New York Municipal Income Fund will seek high income that is exempt from federal income tax and New York State and New York City personal income taxes.
The firm says total return is the fund’s secondary goal, with its primary focus being capital preservation and high tax-effective income. However, it can invest in securities which may be subject to the above-mentioned taxes. It is targeting medium duration securities with an average hold time of three to seven years.
The fund is managed by James Iselin and Blake Miller, who have worked together for a number of years and, along with a team, manage over $11 billion in tax-exempt strategies for institutions and individuals.
They are supported by 14 research analysts and traders and will use an active strategy.
Neuberger Berman is a private, employee-controlled investment manager. It employs some 1,700 asset management professionals and had $205 billion in assets under management as of December 31, 2012.
Daily News Analysis
Published: March 15, 2013
By Chavagnon - Reporter
Coral Gables, FL-based Gibraltar Private Bank & Trust, a private bank and wealth management firm, is exploring a sale with “multiple suitors,” South Florida Business Journal reports, citing sources with knowledge of the matter.
According to the report, one source said that some Latin American banks - including from Brazil, Peru and Chile - are looking to acquire a South Florida bank. Chile’s Banco de Credito e Inversiones was reportedly mentioned by “several sources as an interested player.”
The firm had not responded to a request from Family Wealth Report to comment on the matter in time before publication.
After posting a $12.6 million loss in 2011, the bank reportedly lost a further $3.9 million in 2012. As previously reported by this publication, in October 2010 it was served with a cease and desist order from regulators, citing unsound banking practices related to its Bank Secrecy Act and anti-money laundering policies and procedures, as well as problem loans.
The report highlights that the bank is owned by a group of local investors who purchased it in 2009 for $93 million from Boston Private Financial Holdings.
Meanwhile, at the end of May last year, Adolfo Henriques was named as chairman, president and chief executive. He took on the responsibilities from Steven Hayworth, who left the firm.
Gibraltar Private Bank & Trust has eight full-service private banking and wealth management relationship offices including Florida’s Coral Gables, Fort Lauderdale, Downtown Miami, Miami Beach, South Miami, Naples, Ocean Reef and New York.
Daily News Analysis
Published: March 06, 2013
By Harriet Davies - Editor - Family Wealth Report
The wealth of the world’s billionaires swelled to $5.4 trillion at the start of 2013, from $4.6 trillion a year earlier, according to the latest Forbes Billionaire list.
A total of 1,426 people made the cut, with 210 new ten-figure fortunes added to this year’s list.
The US led the way, with 442 billionaires, followed by Asia-Pacific (386), Europe (366), the Americas (129) and the Middle East and Africa (103), Forbes said.
Once again, Mexican telecoms magnate Carlos Slim topped the tables, followed by Bill Gates. In at number three was Amancio Ortega, of Spanish retailer Zara, achieving his highest ranking so far by edging out investing legend Warren Buffett. This wasn’t for a lack of success on Buffett’s part last year: he added $9.5 billion to his fortune. This wasn’t enough, however, to keep him in the triumvirate of the world’s wealthiest people, as he slipped out of the top three for the first time since 2000.
Forbes said that rising asset prices were the driving force behind the growing wealth of the super rich globally, and that gainers outnumbered losers four-to-one in the tables. In the 2012 list, by contrast, roughly the same number of fortunes fell as rose.
Many new billionaire fortunes were made from consumer spending, the report said. These included: Renzo Rosso, of Diesel jeans wealth and worth $3 billion; retailer Bruce Nordstrom, with $1.2 billion; and designer Tory Burch, with $1 billion.
The billionaire who recorded the largest fall in fortune versus the 2012 list was Brazilian Eike Batista, whose wealth fell by a staggering $19.4 billion, which was enough to push him from seventh to 100th place in the list.
The richest woman on the list was 90-year-old Liliane Bettencourt, who along with her family owns more than 30 per cent of the company her father founded, L’Oreal. She is followed by Christy Walton, widow of John Walton of Wal-Mart wealth, who is also the richest woman in the US.
Published: March 06, 2013
By Tom Burroughes - Group Editor
Credit Suisse in the US has appointed Philip Vasan, who has run its brokerage for the past decade, to run the firm’s private bank division in the Americas, the bank has confirmed to this publication.
Vasan will start his new role in April, reporting to Credit Suisse executive Rob Shafir in New York. Shafir is global co-head of private banking and wealth management.
Vasan will oversee the firm’s private banking business in the US, Canada and Latin America.
The Zurich-listed bank is also promoting Paul Germain, one of Vasan’s key hires, to become the bank’s new head of prime brokerage. Germain joined Credit Suisse from Goldman Sachs, where he was a partner, in 2010.
Credit Suisse’s head of the private bank in the Americas, Anthony DeChellis, will step down from his role. He’s expected to be offered a role to stay within the private bank in another capacity.
Published: February 27, 2013
By Harriet Davies - Editor - Family Wealth Report
US Bank has appointed David Mook as chief private banking officer at its wealth management business.
Mook is charged with driving growth at US Bank Wealth Management, which comprises three business lines serving clients of various net worth.
He will lead private banking services such as product management, credit underwriting and portfolio management.
He is a member of the wealth management executive committee and reports to Mark Jordahl, president of US Bank Wealth Management.
Mook, a JP Morgan veteran, will focus on the high net worth and ultra high net worth businesses of US Bank as well as serving family-owned and controlled businesses.
At JP Morgan, Mook was latterly regional capital advisory practice lead of private banking for the Midwest, West and California. Before that he was the private bank’s capital advisor for private wealth management. He has also served as a senior underwriter for middle market banking. Overall, he was with the Wall Street firm for 29 years.
He joins US Bank at a time when the Minneapolis-based firm has been hiring for its high net worth and ultra high net worth businesses at some pace.
US Bank serves its wealth management clients through three distinct business lines: Ascent Private Capital Management, set up in April 2011 for the wealthiest clients, with over $50 million in investable assets; The Private Client Reserve, which serves clients with over $1 million in investable assets; and The Private Client Group, which serves clients with more than $100,000 of investable assets.
Back in July 2010, the bank hired Michael Cole from Wells Fargo to build out the ultra high net worth division. The first two Ascent offices in Minneapolis and Denver began operations in November 2011, while two additional offices in Seattle and Cincinnati were opened in 2012. Another office in San Francisco is set to open in 2013.
Since the start of the year it has ramped up its ultra high net worth offering in the Midwest, bringing in four managing directors for Ascent in Cincinnati, OH, and announced it is aggressively expanding its high net worth unit in Naples, FL, after it relocated to new offices there.
Daily News Analysis
Published: January 25, 2013
By Eliane Chavagnon - Reporter
Northern Trust has named W Brett Rees as head of wealth management for the mid-Atlantic region.
He succeeds Joanie Stringer, who is relocating to Miami, FL, to serve as a senior wealth strategist focused on business development.
Rees will be based in Washington, DC, with oversight responsibilities for the firm’s business spanning Virginia, Maryland, Pennsylvania and Delaware. He will lead a team of around 30 financial services professionals including portfolio managers, bankers, trust advisors and wealth strategists.
Meanwhile, Rees will also head up Northern Trust’s foundation and institutional advisory services on the East Coast. This unit provides investment services to small- and medium-sized foundations and non-profit organizations.
Based in New York, he will report to Dave Blowers, executive vice president and head of the eastern region.
Rees spent the past six years at Northern Trust as national sales director for wealth management and has worked at the firm for 16 years overall. Before joining Northern Trust, he held a variety of wealth management and commercial banking positions at Bank of America, Bank of Boston and Wachovia.
Northern Trust has $197.7 billion in assets under management, as at end-December 2012. The firm has over 70 wealth management offices in the US and abroad.
Published: January 08, 2013
By Harriet Davies - Editor - Family Wealth Report
Two private family offices with their roots in ultra-wealthy business owning families have formed a strategic alliance which involves sharing a chief executive and chief investment officer.
Forbes Family Trust and LGL Partners will work together under a long-term strategic advisory and investment relationship. LGL CEO P Scott Gregorchuk and CIO William Luterman will join Forbes Family Trust in the same roles. They will work with Keith Bloomfield, the president of Forbes Family Trust, in managing all aspects of the business.
LGL traces its origins to the Lenfest family and was the result of the sale of a family business to a public company in a multi-billion dollar transaction led by Brook J Lenfest. Brook J Lenfest went on to set up a private office, Brooks Capital Group, to manage financial, philanthropic and personal affairs. This led to the development of LGL Partners to work with other wealthy and like-minded families.
H F Gerry Lenfest founded the original business, Lenfest Communications, around four decades ago.
Luterman is the president, CIO and a co-founding partner of LGL Partners. Since 2000 he has also served as the CIO for Brooks Capital Group and as the CIO for The Brook J Lenfest Foundation.
Gregorchuk is a co-founding partner of LGL, before which he was a managing direct at JP Morgan Private Bank.
Forbes Family Trust was formed in 2009 by the Forbes family, founders of the eponymous magazine, to offer wealth management to ultra-wealthy clients.
“We are extremely pleased that our partnership with LGL will allow Forbes Family Trust to create a better global wealth management solution for high net worth families and individuals,” said Miguel Forbes, vice chairman of FFT.
“The addition of Mr Gregorchuk and Mr Luterman to the team at Forbes Family Trust greatly enhances our resources and capabilities to continue our mission,” said Bloomfield.
Daily News Analysis
Published: January 04, 2013
By Harriet Davies - Editor - Family Wealth Report
Minneapolis, MN-based US Bank appointed Michelle Walker and Robert Stadler as managing director of investment consulting and managing director of private banking, respectively, for Ascent Private Capital Management in Seattle.
Walker will provide investment plans for UHNW clients. She spent the past 10 years as an investment specialist and money manager for a high net worth Seattle-based family office.
Stadler will provide UHNW clients with banking solutions. Prior to joining Ascent, Stadler served as a vice president and regional credit executive at Bank of America Merrill Lynch.
US Bank Wealth Management named Terry Sandven chief equity strategist, a newly-created position in which he reports to chief investment officer Tim Leach.
Sandven will build and lead the equity team that manages individual stocks not managed by third-party managers, for all client accounts of Ascent Private Capital Management. Additionally, Sandven will lead the equity workgroup, which supervises equity investment policy and strategic process.
The wealth and investment arm of Barclays, the UK-listed bank, appointed Stephen Liss and Alpa Patel as directors in the New York and San Francisco offices.
In these newly created roles, Patel and Liss will advise high net worth clients and related entities on domestic and international wealth structuring, multi-generational estate planning, wealth preservation strategies, and planned charitable giving.
Liss joined a New York-based team which includes Anthony Ruscigno, director, and Kristen Rode, assistant vice president. Patel will be based in the San Francisco office and will serve clients in the West Coast and Texas regions. Both will report to Chris Johnson, director.
BMO Private Bank hired Terry Jack as vice president, senior portfolio manager, focused on the Green Bay, WI, area. Jack’s hire was part of an effort by the private bank to ramp up its Midwestern presence, and is its sixth senior hire in the region in recent months.
San Francisco, CA-headquartered Sanctuary Wealth Services, a provider of business support services for breakaway advisors, named Craig Johnson as chairman.
Johnson is vice chairman of JMP Group and a member of its executive committee, as well as chairman of Harvest Capital Strategies. At JMP, Johnson served as president from 2007 through 2010 and earlier was president of JMP Securities between 2002 and 2007.
Beacon Trust Company, a Morristown, NJ-based subsidiary of The Provident Bank, appointed Diane Allard as a vice president and portfolio manager, responsible for managing investment portfolios and focused primarily on high net worth clients.
Allard spent the past 10 years as a vice president and portfolio manager at TD Wealth, managing investment portfolios for institutional and HNW clients.
BNY Mellon chairman and chief executive Gerald Hassell announced three executive promotions.
Karen Peetz, was vice chairman and CEO of financial markets and treasury services, and is now president of BNY Mellon. Peetz will lead global client management, regional management, treasury services and human resources.
Brian Shea is now president of investment services and head of BNY Mellon’s global operations and technology group. Shea will continue in his role as CEO of BNY Mellon’s Pershing subsidiary and as head of broker-dealer and advisor services.
Lastly, Timothy Keaney, previously vice chairman and CEO of asset servicing, is now CEO of investment services. BNY Mellon said it will align its asset servicing, corporate trust, depositary receipts, global markets, global collateral services, broker-dealer services and Pershing businesses under Keaney’s leadership. Keaney retains his vice chairman title.
Vice chairman Curtis Arledge remains as CEO of BNY Mellon Investment Management, the New York bank’s asset and wealth management businesses.
Peetz, Keaney and Arledge continue to report to Hassell. Shea will report to Hassell as head of global operations and technology and to Keaney in his role as president of investment services.
Raymond James & Associates added a trio of financial advisors in Fort Lauderdale, FL, from Morgan Stanley Wealth Management.
Scott Cutliff, Donald Horras and Patricia Polster - who make up the Sunset Financial Group - previously managed over $204 million in client assets and had annual fees and commissions of about $1.5 million.
LPL Financial, the independent broker-dealer that is part of LPL Financial Holdings, named Victor Fetter chief information officer and managing director of its business technology services unit.
Based in Charlotte, NC, Fetter will report to Mark Casady, LPL Financial chairman and chief executive. He will also serve as a member of the firm’s executive management committee. He will develop the firm’s existing technology capabilities built by chief information officer Chris Feeney, who is retiring after five years at LPL and over 30 years in the financial services technology industry.
Genworth Financial appointed Thomas McInerney as president and chief executive. McInerney will also join the board of directors and James Riepe will continue to serve as the company’s non-executive chairman of the board.
McInerney previously held senior roles at ING Group and Aetna Financial Services.
Meanwhile, Genworth Financial Wealth Management appointed Daniel Courtney as president of Genworth Financial Asset Management, the wealth unit’s affiliate investment arm. It is a newly-created role in which Courtney will oversee growth strategy, including product development and target markets.
Courtney will report to Mike Abelson, senior vice president of Genworth Financial Wealth Management’s investments and product development. He will also work closely with Tim Knepp, chief investment officer of the asset management division.
Morgan Stanley Wealth Management added two former Merrill Lynch advisor teams in New York.
Nancy Buttweiler, Kristopher Schultz and David Peterson previously managed $141 million in assets and had a combined production of over $1.2 million. They report to branch manager Michael Junker in St Paul.
Richard Prybyl, Richard Farr and Steve Headrick previously managed $248 million and had a combined production of about $1.8 million. They join Morgan Stanley in Ithaca and report to Dean Wallace, CeWSFS Bank appointed Mark Gordon as director of private banking within its wealth management division.
Gordon joined the bank in 2007 as vice president within the commercial banking division. Before that he led a private banking team in Greenville, DE, at Mellon Financial Corporation, and earlier still he worked with wealthy clients as an advisor with Merrill Lynch.
The Private Client Reserve, a unit of US Bank, appointed Matthew Ordway as a vice president and wealth management advisor in Chicago, IL, and the greater metro area.
Ordway will provide private banking, personal trust, investment management and financial planning to HNW clients. Prior to joining the PCR, Ordway was a vice president/relationship manager at PNC Bank Wealth Management.
Didem Nisanci, chief of staff at the Securities and Exchange Commission, left the agency.
Nisanci was named chief of staff in March 2009 and was a senior advisor to the chairman on policy, management and regulatory issues.
New York-based Royal Alliance Associates, an independent broker-dealer, recruited three advisor teams with a combined $800 million in assets under management.
The three advisor teams are: Beverly Hills Financial Planners in Beverly Hills, CA; Ranker-Hanshaw Wealth Management in Harrisburg, PA; and Informative Financial Services in Sylvania, OH.
The Hedge Fund Association set up a new high net worth advisory board, chaired by marketing veteran April Rudin. The HNW advisory board will develop educational programs and networking events globally for wealthy investors.
In a separate move, the HFA promoted Ryan Mitchell to HFA West Coast chapter regional director
Central Eastern, NY, complex manager.
Philadelphia, PA-headquartered Janney Montgomery Scott promoted Anthony Miller to executive vice president, chief administrative officer and financial operations principal.
Miller joined the firm 10 years ago as the director of internal audit and was later promoted to chief financial officer. Prior to joining Janney, he worked at Ernst & Young.
In a separate move, Janney brought in Gregory McShea as senior vice president and general counsel.
McShea has 15 years of experience in regulatory and legal affairs within the financial services industry, most recently with M&T Bank. There he oversaw the regulatory and compliance function of the asset management division, and was also responsible for compliance oversight of the bank’s broker-dealer unit.
Waterbury, CT-headquartered Webster Bank appointed Al Falco as a senior vice president and senior private banker serving the Greater Hartford region.
Falco will provide individuals with banking, lending, investment trust and planning services, as well as institutional asset management for middle-market corporations and non-profits.
He was latterly a senior vice president and private client manager in the private wealth management division at US Trust, Bank of America.
Wells Fargo Advisors recruited the financial advisor team of Joseph DiRago and Penny DiRago from Morgan Stanley Wealth Management. The two brokers, who are husband and wife, joined the firm’s San Antonio, TX, office, where they report to branch manager Hugh Patterson.
Joseph and Penny DiRago both worked at Morgan Stanley for over six years. Over the past year they generated $1.4 million in fees and commissions, and managed $180 million in client assets.
Peter Moertl left his post as head of international wealth management at BNY Mellon. He held the role for “a little more than two years” and there are no plans to replace him at this time. As head of international wealth management, Moertl lead the firm’s international high net worth/family office client business in Asia-Pacfic, Latin America, Europe, the Middle East and Africa, according to LinkedIn.
Northern Trust expanded its wealth management team in Dallas, TX, adding Michael Montgomery as managing director and Jamie Cuellar as senior investment portfolio manager.
Montgomery will lead a team serving affluent individuals and families with investment management, fiduciary and credit needs. He will report to Dallas region president Mark Flagg. Cuellar, who reports to Montgomery, will advise clients on their investment needs.
Montgomery was most recently a managing director at Harris myCFO. There, he served as the primary contact, financial strategist and coordinator for the firm’s wealth management and family office services across the Southwest.
Cuellar was latterly a managing director and portfolio manager with PineBridge Investments and a predecessor subsidiary, John McStay Investment Counsel.
Raymond James Financial Services recruited a team of advisors in Baltimore, MD, from LPL Financial, led by advisor Tony Fusco.
The team operates as Fusco Financial Associates, an independent firm with offices at 505 Baltimore Avenue in Towson, MD.
Fusco is joined by his partner and son, Kevin Fusco, as well as financial advisor David Matthews; senior financial analyst Steven Moore; registered associates Donna Childress and Michelle Dumler, and client services associate Ascenza DiFerdinando. Fusco spent the last 16 years at LPL and managed over $230 million in client assets.
East Hartford, CT-based 3D Asset Management added Timothy Baker, Tom Chimirri and Edwin Nunez as regional vice presidents on its business development team. The trio report to Vincent Leon, national sales manager.
Baker joined from Symmetry Partners, where he managed key relationships with financial advisors, broker-dealers and RIAs across the US. At 3D, he will serve as the regional vice president for the Southeast region.
Meanwhile, Chimirri - latterly of Legg Mason Global Asset Management - is responsible for the North Central region, while Nunez will cover the Northwest region. Prior to joining 3D, Nunez was a regional sales director at Financial Products.
Virginia-based registered investment advisor Washington Wealth Management added California Wealth Transitions and Overlake Partners to its advisor platform - taking its assets under management to $1 billion.
Based outside Seattle in Bellevue, WA, Overlake Partners is an independent financial advisory practice led by John Wilbourne, principal. Wilbourne has over 18 years of industry experience and was most recently with Wells Fargo Advisors.
The Private Client Reserve, a unit of Minneapolis, MN-based US Bank, made two senior hires spanning Naples, FL, and the San Francisco Bay Area.
In Naples, Jason Philips joined as vice president and private banker. Meanwhile, Neil O’Keeffe joined as a vice president and wealth management consultant in the Bay Area, spanning San Francisco, Palo Alto, and San Jose.
Philips has over a decade of experience working for US Bank and in his new role will serve high net worth individuals and families. He previously worked in the commercial banking division and consumer banking.
Meanwhile, O’Keeffe will work with wealthy families, business owners, foundations and individuals. He previously served as a director at AllianceBernstein Institutional Investments and prior to that was a vice president and financial advisor at Bernstein Global Wealth Management.
FolioDynamix, a provider of web-based wealth management technology, appointed Aaron Schumm to the newly-created role of chief customer officer. Schumm oversees revenue generation and strategy. He previously served as senior vice president of products for FolioDynamix. He was also one of the firm’s original founders in 2007. Prior to joining FolioDynamix, Schumm was a vice president at Citigroup, with a focus on global asset manager solutions.
Man Group hired an executive chairman for North America as it looks to grow its business among institutions, foundations, family offices and intermediaries. John Rohal will work closely with Eric Burl and Lance Donenberg, respectively chief operating officer and head of sales for North America, and report to Manny Roman, president and COO of Man.
Rohal is a former institutional client of Man’s and was a member of the investment committee at California-based Makena Capital Management, a multi-asset class investment manager. There he oversaw global investments in public equity and tactical hedged equity. He stepped down from this position on joining Man.
Morgan Stanley Wealth Management recruited eight financial advisors - seven from Merrill Lynch and one from Barclays - with a combined $778 million in assets under management.
The largest former Merrill team by assets includes Luis Fuentes, Christopher Fuentes and Rosario Hondermann, who joined in Miami, FL. They previously oversaw $373 million in client assets and generated $1.97 million in fees and commissions. Senior client service associate Louis Fuentes moved with that team. The team reports to complex manager Kevin McCarty.
Meanwhile, a second team comprising Brant Giere and Lisa Szucs joined from Merrill in Akron, OH. Giere and Szucs previously had $210 million in client AuM and $1.005 million in production. They report to branch manager Jason Haines.
Additionally, Vince Costanzo and Rex Mack joined from Merrill in Cleveland, OH. The pair previously had $115 million in client AuM and at Morgan Stanley report to branch manager Robert Hartmann.
Lastly, joining from Barclays in Shrewsbury, NJ, was Howard Shallcross, who previously oversaw $80 million in client assets. He reports to branch manager Todd Sacks.
Barbados-based CIBC FirstCaribbean named Dan Wright as a director for private wealth management.
Wright was latterly senior vice president and head of international wealth management at Bank of Nova Scotia in Toronto, a role in which he oversaw the bank’s wealth management business in the Caribbean, Latin America and Asia. He also served as chair of BNS Trust Company in the Bahamas and as a director of various Caribbean-based businesses in the Cayman Islands and Jamaica.
In his new role Wright will focus on implementing CIBC FirstCaribbean’s new strategy to deliver a “holistic advisory service” to private wealth management clients both regionally and internationally. He will initially be based in CIBC FirstCaribbean’s Cayman Islands office.
Geller & Company hired Tricia Levin as its new partner in charge of tax services, responsible for shaping tax strategy for the firm and its clients, and also for helping guide the overall strategic direction of the firm’s Family Office Services business. Levin joined the executive team at Geller from Deloitte’s private company services practice. She worked there for over 17 years, liaising with high net worth individuals and private equity firms on tax matters.
New York City-headquartered Snowden Capital Advisors, a dual listed RIA and broker-dealer, made three senior appointments. Lyle LaMothe joined as non-executive chairman of the board, while Greg Franks started as managing partner and president. Finally, Chris Lappas was named chief operating officer.
LaMothe is a senior partner of Left Hand Logic, a business consulting firm focused on the independent financial services industry. He was formerly head of US wealth management at Merrill Lynch. Franks was latterly Western/Mid-Atlantic division director and regional managing director of US wealth management at Merrill Lynch.
Lappas was previously a regional director for wealth management and banking in the Northeast region at Merrill Lynch.
Snowden has brought in two new strategic investors: Bob Doll, chief equity strategist and senior portfolio manager at Nuveen Asset Management and former BlackRock chief equity strategist, along with Brinker Capital, an independent asset management firm based in Berwyn, PA.
Doll and Charles Widger, executive chairman of Brinker Capital’s board of directors, will join Snowden’s strategic advisory board, which also includes LaMothe and Pete Mooney.
Aristotle Capital Management hired Dennis Sugino as managing director and part of its executive team. Sugino was a co-founder and president of Cliffwater, an investment firm specializing in alternative assets for institutional clients. He held this role from 2004 to 2012.
Standish Mellon Asset Management appointed Federico Garcia Zamora to the newly-created position of senior portfolio manager of currency strategies. Reporting to Standish Mellon’s chief investment officer David Leduc, Zamora will be responsible for making investment recommendations in global currencies for single sector and multi-sector fixed income strategies. He will also manage the firm’s upcoming currency absolute return strategies.
Zamora was previously co-manager of the international fixed income, global fixed income and strategic inflation opportunities funds at American Century Investments.
Canada-based Morguard appointed Vikash Jain as vice president and chief investment officer of Morguard Financial, its wholly-owned fund management company. Jain succeeded Charles Dillingham - whose reason for departure is unknown - on December 31. As CIO, Jain will oversee the management of the equity and fixed income portfolios that Morguard Financial manages for its institutional, retail and HNW investors.
The members of Dillingham’s portfolio management team, Derek Warren and Kate MacDonald, will continue their day-to-day management of the Morguard portfolio of funds under Jain’s direction.
London-based Insparo Asset Management appointed Glenda Levin as head of marketing, charging her with spearheading a marketing drive targeting international investors, which will focus on the US in particular. Levin previously spent eight years at Pioneer Alternative Investments as head of equity strategy for fund of funds.
DA Davidson & Co opened a Pittsburgh office and made a number of hires to its taxable fixed income group.
John Koodrich, who joined the firm from Raymond James, runs the new office as chief credit strategist.
The new team members are:
•Paul Beaudoin, senior vice president, corporate bond trader, Seattle;
•George Covert, senior vice president, institutional sales, Austin;
•Brian Doherty, vice president, institutional sales, Boston;
•Tracy Hindman, vice president, institutional sales, Pittsburgh;
•Jake Koodrich, credit strategist, Seattle;
•Matt Lynch, senior vice president, institutional sales, Denver;
•Doug McKoy, vice president, institutional sales, Denver;
•Dan Murphy, senior vice president, institutional sales, New Jersey;
•HT Simonton, senior vice president, institutional sales, Memphis;
•Jeff Stanley, senior vice president, portfolio strategist, Seattle;
•Chris Sundquist, vice president, institutional sales, Lincoln, Nebraska;
•Robin Taylor, senior vice president, institutional sales, Chicago.
The appointments have extended the taxable fixed income team’s coverage to Chicago, Boston, Austin and Memphis.
Members of the strategies team report to James Rice, head of taxable fixed income trading, while the institutional sales team reports to Rick Turnage, head of fixed income sales.
Prospera Financial Services brought in two advisors in Westchester, PA, and Plymouth, MA, adding over $56 million in assets under management. Tom Ambrose of Ambrose Wealth Management has over 32 years of experience and was formerly with Ameriprise. Meanwhile, Hilary O’Malley - latterly of Wells Fargo Advisors - joins Plymouth Rock Financial Partners and has been advising clients for over 19 years.
Daily News Analysis
Published: October 24, 2012
By Harriet Davies - Editor - Family Wealth Report
Hilliard Lyons, the Kentucky-headquartered wealth manager, has hired Robert Bernardin as a senior vice president for its Evansville, IN, office.
Bernardin joined from Morgan Stanley, where he oversaw some $300 million in client assets, and has been in the industry for 30 years.
“I’ve known Robert for more than 30 years and I have great respect for his integrity and professionalism,” said Jim Allen, chief executive of Hilliard Lyons.
Earlier this week reports emerged that senior private wealth advisors have left Morgan Stanley’s brokerage operation in California, potentially taking over $6.5 billion in client assets. Rebecca Rothstein and Palmer Murray left separately this month, Reuters reported, adding that the US firm has been the target of rival businesses looking to recruit advisors concerned about technology problems and other issues stemming from the wealth management joint venture with Citigroup.
Daily News Analysis
Published: October 23, 2012
By Tom Burroughes - Group Editor
More than $6.5 billion in client assets managed at Morgan Stanley’s US brokerage may depart after senior private wealth advisers left the firm in California, according to Reuters.
Rebecca Rothstein and Palmer Murray left separately this month, the news agency said, adding that the US firm has been the target of rival businesses looking to recruit advisors concerned about technology problems and other issues stemming from the wealth management joint venture with Citigroup.
In September,Morgan Stanley bid farewell to the Smith Barney name, as it re-branded its brokerage behemoth as Morgan Stanley Wealth Management. The brand overhaul, which had been planned for some time, came shortly after the two owners of the joint venture brokerage - Morgan Stanley and Citigroup - agreed on a purchase price that allows Morgan Stanley to take full control of it over time. Morgan Stanley recently boosted its stake to 65 per cent and will buy the remaining 35 per cent no later than June 1, 2015.
Last week, Morgan Stanley Wealth Management reported $239 million in pre-tax income from continuing operations for the third quarter of the year, down from $356 million for the same period in 2011, representing a year-on-year decline of $117 million.
According to one report, performance of this business has been relatively robust in recent months. According to the Wall Street Journal, the number of advisors at Morgan Stanley Wealth Management did decline to 16,829 as of 30 September, down by a net 105 from the end of the prior quarter. However, average productivity among advisors – measured in annualized revenue per adviser – rose to $790,000, a 2 per cent increase from the previous quarter, the WSJ said.
Both Rothstein, a managing director based in Beverly Hills, and Murray, an executive director based in Los Angeles, had been with the firm for more than a decade and were a part of the company’s private wealth management group, which caters to ultra-wealthy clients with at least $20 million in assets.
Morgan Stanley confirmed the departures but declined to comment further, the report said.
Rothstein, who managed about $2.5 billion in client assets with her team, moved to Merrill Lynch’s private banking and investments group. She moved with advisor Mark Varo, also a managing director, and two of her sons, Evan and David Rothstein, who are also advisors on her team.
Murray, who has been in the wealth management industry for two decades, joined Beverly Hills-based Lourd Capital Management. He managed $4 billion in client assets in 2011, the news report said.
Daily News Analysis
Published: October 18, 2012
By Harriet Davies - Editor - Family Wealth Report
Assets under management rose 13 per cent year-over-year and 5 per cent sequentially at BNY Mellon, hitting a record $1.4 trillion at September 30, 2012.
The rise in assets was in a context of both rising market values and net inflows, with both long- and short-term inflows at $9 billion for the third quarter.
Investment management and performance fees were $779 million in Q3, up 7 per cent year-over-year and down 2 per cent sequentially, again boosted by rising markets and new business on a yearly basis, the firm said.
Overall, Bank of New York Mellon reported third quarter net income applicable to common shareholders of $720 million, or $0.61 per common share, up from $651 million, or $0.53 per common share, in the third quarter of 2011.
“We are pleased to report solid earnings growth this quarter, led by the strength of investment management, which recorded its twelfth consecutive quarter of long-term inflows,” said Gerald Hassell, chairman, president and chief executive of the firm.
In other business units, BNY Mellon logged investment services fees of $1.7 billion in Q3, a decrease of 6 per cent year-over-year and an increase of 1 per cent sequentially.
The bank’s assets under custody and administration amounted to $27.9 trillion at September 30, 2012, an increase of 8 per cent compared with the prior year and 3 per cent sequentially.
Daily News Analysis
Published: October 18, 2012
By Eliane Chavagnon - Reporter
Net income at Bank of America’s global wealth and investment management business rose 50 per cent year-on-year to $542 million for the third quarter, due to lower expenses and credit costs as well as higher revenue.
Despite the 50 per cent year-on-year gain, net income was down slightly from the prior quarter (Q2: $547 million).
Revenue at the division increased 1 per cent year-over-year to $4.3 billion, “largely as a result of higher net interest income,” Bank of America said. Non-interest expense fell 4 per cent from the third quarter of 2011 due to FDIC expense and lower support and personnel costs.
Meanwhile, the provision for credit losses increased by $14 billion to reach $61 billion, but year-on-year signifies a $101 million decrease, off the back of “lower delinquencies and improving portfolio trends within the residential mortgage portfolio.”
Assets under management stood at $708 billion, up from $682 in Q2 and up year-on-year (Q3 2011: $617 billion). This was driven by higher market levels and long-term AuM flows, the bank said.
Among its business highlights for the division, BofA said that period-end loan balances for global wealth/investment management grew $5.1 billion - equivalent to 5 per cent - from the third quarter of 2011 to a record $107.5 billion, driven by higher securities-based lending and residential mortgage production.
Total client balances in global wealth and investment management increased 3 per cent from the prior quarter to $2.3 trillion, which the bank said was primarily led by market gains, as well as gains in deposit balances, long-term AuM flows and loan balances. GWIM posted “solid” long-term AuM flows of $5.7 billion, the bank said, up 39 and 27 per cent from the previous quarter and year respectively.
Meanwhile, across the group BofA reported $340 million in net income, significantly down from $6.2 billion in the third quarter of 2011 and the $2.5 billion logged in Q2.
The bank said the Q3 results were negatively impacted by debit valuation and fair value option adjustments related to the improvement in its credit spreads, as well as $1.6 billion in litigation expense, while the year-ago quarter was positively impacted by DVA and FVO adjustments.
The bank had a Tier 1 common capital ratio of 11.41 per cent under Basel 1, and an estimated CCR under Basel 3 of 8.97 per cent, as of 30 September 2012.
Thomas Carroll has been named chief executive of GenSpring Family Offices, SunTrust’s multi-family office affiliate. Carroll succeeds Maria Lagomasino, who has decided to leave the firm.
Published: October 05, 2012
By Eliane Chavagnon - Reporter
Most recently, Carroll led SunTrust’s sports and entertainment group, which provides private wealth management services to sports, music and entertainment professionals and executives, as well as financial services to sports, music and film organizations.
Having spent 16 years at SunTrust, he has held various positions within the firm’s private wealth management business, including serving as wealth services manager in Atlanta.
“We remain committed to GenSpring’s advice-driven approach to serving clients, and Carroll’s proven leadership skills and experience as well as knowledge of the needs of ultra high net worth clients make him uniquely qualified to lead this business,” said William Rogers, chairman and CEO of SunTrust Banks.
Earlier this year, GenSpring explained to Family Wealth Report about how it is breaking down its service offering and segmenting clients to align their needs and services more closely. (To view that article, click here.)
More recently, GenSpring set out how it has seriously ramped up its offering to female clients over the past year, capitalizing on women’s extreme dissatisfaction with the financial services industry to strengthen its appeal among this high-growth market. That program is run senior strategist Jewelle Bickford, ex-investment banking supremo and long-time advocate of empowering women.
Headquartered in Atlanta, New York-listed SunTrust had $178.3 billion in assets and total deposits of $128.4 billion, as at end-June.
New York is the fourth most attractive wealth management and private banking hub globally, tailing Hong Kong, Zurich and - at number one - London, while there are signs that offshore centres have recovered some of their old lustre, a new survey shows.
Published: September 26, 2012
By Eliane Chavagnon - Reporter
Filling the remaining six of the top 10 spots are Singapore, Geneva, Toronto, Vancouver, Frankfurt and Jersey, Z/Yen Group’s Global Financial Centres Index for 2012 showed. Last year, behind the top three centres as wealth management’s most-wanted places (London, Geneva and New York) were: Toronto, Hong Kong, Zurich, Singapore, Jersey, Vancouver and Boston, the UK-based think tank said.
New York also ranks second in the asset management industry, behind London but ahead of Singapore, Z/Yen Group said. Also in the top 10 for asset management is Boston (6), Chicago (7), Toronto (8) and San Francisco (10).
In terms of overall financial centre ratings, again, London scores above the rest with 785, up four points from GFCI’s 2011 reading of 781. Although in second place tailing London, New York’s rating has slipped seven points to 765. Hong Kong’s rating - despite holding third place - has fallen 21 points from 754 to 733. After Hong Kong, Singapore, Zurich, Seoul, Tokyo, Chicago, Geneva and Toronto complete the top 10 rankings.
“We continue to believe that the relationships between London, New York and Hong Kong are mutually supportive,” the firm said in the report. “Whilst some industry professionals still see a great deal of competition, others from the industry appear to recognize that working together on certain elements of regulatory reform is likely to enhance the competitiveness of these centers.”
The GFCI has been tracking movements in the competitiveness of financial centres around the world since 2007. At present, it follows 77 centres. Ratings scores range from zero to 1,000.
Overall a mixed picture in the Americas
Ratings have all fallen across New York (seven points), Chicago (five points), Boston (four points), San Francisco (five points) and Washington, DC, (five points). In Canada, Toronto saw a very small decline (four points), while Montreal, Calgary and Vancouver have all risen (up nine points, five points and one point respectively.)
Of all three Latin American centres, South America’s Sao Paulo showed the largest rating increase, up seven points from 612 and finishing forty-eighth overall.
Offshore gains ground
Offshore centres, which the firm noted have suffered “significant reputational damage” in the past four years, gained momentum in 2010/11. However, the 2012 index conveys a mixed picture this year, with no significant moves, except for the Bahamas which gained 22 points. Jersey and Guernsey remain the leading offshore centres.
Progress is also notable in the Middle East, with Qatar, Dubai, Abu Dhabi and Riyadh all logging increases in both ratings and rankings.
The euro crisis cloud lingers
Madrid, Lisbon, Dublin and Athens all have lower ratings in 2012, as was also the case in 2010 and 2011. Although Frankfurt and Paris both rose slightly in 2011, this year the two countries saw “a reversal of these gains”, the firm said. Nonetheless, some improvements have made their way in Europe, with Geneva re-entering the index’s top 10.
Meanwhile, the past trend of large rises in the ratings of Asia-Pacific centres appears to have ended, the firm added. For example, Hong Kong, Singapore, Tokyo, Shanghai, Beijing, Taipei and Shenzhen all declined this year. Specifically, centres on the mainland of China have seen “significant declines”, with Shanghai taking the largest tumble, down 31 points.
“GFCI respondents believe that the Asian centres will continue to become more significant in the medium- to long-term,” the firm said.
Published: September 11, 2012
A third party has valued Morgan Stanley Smith Barney at $13.5 billion, as Morgan Stanley and Citigroup reach a deal allowing the transfer of the business over in full to Morgan Stanley.
The agreement means that Morgan Stanley can go ahead and buy Citi out of the joint venture. It will purchase an extra 14 per cent stake in the business initially, and buy the remaining 35 per cent stake no later than 1 June 2015, pending regulatory approval. This will be done in steps, with Morgan Stanley set to purchase another 15 per cent stake by June 2013.
The 14 per cent stake will see around $5.5 billion of deposits transferred at no premium, while the 35 per cent stake is inclusive of around $48 billion of deposits.
“This mutually beneficial agreement gives both parties certainty and transparency on price and timing, and is a significant milestone for Morgan Stanley in the implementation of our strategy,” said James Gorman, chairman and chief executive of Morgan Stanley.
The two firms initially disagreed over the valuation of the JV, with Citigroup Global Markets pricing Citi’s 49 per cent stake at around $11 billion. Morgan Stanley’s valuation for the full business, however, was around 40 per cent of Citi’s valuation of the business, according to a regulatory filing.
At the end of August Citigroup said in the filing that due to the “unexpectedly low” valuation given to MSSB by Morgan Stanley, and depending on the ultimate purchase price, it could face “a significant non-cash GAAP charge to net income in the third quarter 2012.”
“Establishing certainty regarding the divestiture of this business is in the best interests of our shareholders,” said Vikram Pandit, chief executive of Citi.
“As we have shown, the more we put the past behind us, the more we can focus on our future, which is in the core businesses in Citicorp. Since forming Citi Holdings, we have reduced its assets by over $600 billion, and we will continue to do so in an economically rational manner.”
The original 2009 deal saw Citi exchange 100 per cent of its Smith Barney, Smith Barney Australia and Quilter units for a 49 per cent stake in the venture and an upfront cash payment of $2.7 billion. Meanwhile, Morgan Stanley made the cash payment and exchanged 100 per cent of its global wealth management business for a 51 per cent stake in the joint venture.
Daily News Analysis
Published: August 20, 2012
By Eliane Chavagnon - Reporter
Tulsa, OK-based BOK Financial has acquired The Milestone Group, a Denver-based RIA which manages $1.3 billion in equity and fixed income investments.
BOK said the purchase of Milestone will boost assets under management and administration within its various subsidiaries to almost $50 billion. Steve Bradshaw, senior executive vice president, said the firm is “actively pursuing acquisitions” to enable the firm to “continue its growth trajectory.”
Milestone provides wealth management services to some 250 high net worth clients, located primarily in Colorado and Nebraska. As part of the transaction - the details of which remain undisclosed - the firm’s founders, advisors and relationship teams will “remain intact,” BOK said.
“This partnership preserves our team and boutique service model, yet adds the strength and resources of a stable, 100-year old firm,” said Robert Adams, co-founder and managing director of Milestone.
BOK is traded on the Nasdaq and has financial holdings including BOKF, NA, BOSC and Cavanal Hill Investment Management.
Published: August 17, 2012
By Harriet Davies - Editor - Family Wealth Report
The world’s most successful, multi-generational families routinely adopt best practices on maintaining personal relationships, family governance and next-generation development, a new study by the Family Business Network and Family Office Exchange finds.
The study, authored by Dr Dennis Jaffe of Saybrook University, along with Jane Flanagan of FOX, defines and compares the best practices used by 192 of the world’s most successful families, drawn from the two organizations’ pool of members. The study characterized the families as successful due to the high proportion of third- and fourth-generation families present in the sample.
One of its key findings is that successful families make use of best practices “significantly,” and expect to increase their use of them over time. The findings are also consistent across families around the world, with participants drawn from North America (57 per cent), South America, Europe, Asia and Australia/Oceania. They are also consistent across families who still own a legacy business and those who don’t.
In terms of assets, 87 per cent of the participant-families have over $50 million and 23 per cent have over $1 billion. Some 68 per cent still own a legacy business.
“The major insight is that a family has to plan and be conscious not just about their financial safety but also about their family’s communication, connection, trust and teamwork,” said Dr Jaffe. “We found in this survey that the most successful families were doing these things; the question now for a family is not whether to do them, but when and how.”
As is often said, the generational transition is a pitfall for many families: the FBN/FOX report cites the Family Firm Institute in saying that only a third of family businesses survive as they cross generations; of those, under 10 per cent manage a successful second transition.
Once a family has sold its legacy business it can still operate as a “family enterprise,” the report lays out, with shared investments and a shared wealth-creation function. Many families, however, “do not survive the generational transition,” because they do not adopt internal governance practices and manage emerging realities.
One of the biggest challenges is the way families sprawl over time to include several related households, so governance practices must counter a tendency toward dissipation and fragmentation. To do so, the paper found that families adopted practices that spanned the inter-connected worlds of family, business and finance.
The critical practices for success are distributed along three overlapping pathways, it says.
• Path one: “Nurture the family”
In this pathway, the business is sold within the first generation but substantial wealth is passed on, with second-generation siblings starting their own families. As such, cousins grow up separately, and to maintain a family enterprise the family must actively build communication and shared values.
Best practices on this path include sharing philanthropic activities, ensuring regular and extended family gatherings, as well as fostering a climate of openness and trust, and respect for the family’s history and legacy.
• Path two: “Steward the family enterprises”
In the second scenario, the family still owns a business together. In this case, as the family base grows, expectations for ownership of the business need to be addressed.
Best practices include having a strategic plan for family wealth and/or enterprise growth; an active, diverse and empowered board; ensuring transparency about financial information and business decisions, and being explicit about shared shareholder agreements governing family assets.
• Path three: “Cultivate human capital for the next generation”
The third pathway is focused on developing the human capital of the younger generation and preparing them for their roles within the business and family, ensuring they feel connected with the family’s legacy.
Best practices include employment policies for younger members within the family enterprises; agreement on values about family money and wealth; financial education for the younger gen, matched to their age as they grow; and, crucially, support to develop the next generation of leadership.
“Highly engaged” in best practices
The families involved in the report are highly involved with best practices and the trend is for greater use of them over time, say Jaffe and Flanagan, who developed a composite index to measure how important families believe these practices are now, and how important they will be in the future.
These indexes allowed the researchers to identify areas where the most work was needed to bring the use of practices in line with families’ vision for their future use. By this measure, families will be looking to increase their use most of the following practices:
1) Support for development of next-generation leaders;
2) Exit and distribution policies for individual shareholder liquidity;
3) Strategic plan for family wealth and/or enterprise development;
4) Climate of openness, trust and communication;
5) Clear, compelling family purpose and direction.
What kind of model for wealth management?
The report also delved into how families managed their wealth, and found that even in cases where the legacy business was still owned by the family, it had often branched out to make use of other forms of wealth management.
Over half (57 per cent) reported having a single family office; 11 per cent relied on staff advisors within the family business; 10 per cent used a private bank or wealth advisor; 5 per cent were part of a multi-family office, and 4 per cent used a private trust company.
Allan Starkie, Ph.D. is a partner at Knightsbridge Advisors, an executive recruitment firm specializing in wealth management.
Published: August 09, 2012
Over the last four years, 64% of our searches have targeted two types of revenue generating professionals: the rarest of creatures, million-dollar revenue producers, and relationship managers with a strong sales component to their responsibilities.
However, top revenue producers are becoming increasingly rare and recruiting relationship managers with sound production records does not ensure client portability. As a result, firms also should focus on back-end structured team lift-outs and strategic acquisitions.
Although occasionally teams actively seek to move together, more often team lift-outs must be created. That tends to cost less and also increases the likelihood that clients will move with the team. If an intact team is marketing itself, it’s safe to assume that the team approached a number of firms, driving the cost considerably higher. Creating a lift-out team also allows the acquiring firm the element of surprise, which always increases portability. By contrast, if a team is selling itself, it is virtually impossible for their employer not to get suspicious and begin developing a contingency plan to retain their clients.
The first step to creating a lift-out team is identifying institutions in which a “hard-wired” client team is the prevalent model. That is to say that a relationship manager has an actual team in which the same specialists surround each client relationship. The key players need to be the portfolio manager, trust administrator and lead relationship manager, but it’s also beneficial to bring any support personnel that actually engage in frequent interaction with the client.
Typically, the best way to construct a lift-out is to approach one of the senior members of the team as if you were recruiting him or her individually. However, the hiring institution sincerely should be willing to hire this professional, even if the team does not follow immediately.
During the initial interview process, after establishing trust, pose the question of a team lift-out. If the professional is amenable to the idea, be sure to examine any non-solicitation agreements undertaken by the employee. Then, if no non-solicitation agreement exists, the lead employee can act as the negotiator and spokesperson for the team.
However, if he or she is prohibited from soliciting employees, the recruiting firm must contact each team member individually and create the lift-out in a manner in which the members are not perceived as soliciting each other. It’s also important to orchestrate the method and timing of the mass resignations and have complete clarity on any restrictions regarding soliciting clients. Since restrictions usually apply, create bonuses based on portable assets on a success basis, never as upfront sign-on bonuses.
Under the right conditions, RIA acquisition can be a viable solution to quick asset growth.
However, don’t try to roll-up a series of disparate RIAs under the illusion that it will drastically cut overhead costs and create a more efficient organization through economies of scale. Instead, focus on acquiring only those firms that will be a good fit into your firm’s culture. Then, procure them in a manner that will benefit the key staff of the acquired RIA as well as your firm’s strategic goals.
Published: August 02, 2012
By Eliane Chavagnon - Reporter
The Wharton School of the University of Pennsylvania and the Institute for Private Investors are to formally launch The Wharton IPI Private Wealth Network - a new resource for investors which formalizes the network built over the past 13 years via the IPI Private Wealth Management program, the organizations said.
The IPI Private Wealth Management program is a five-day residential program which since 1999 has been joined by 652 investors from 36 countries.
“The professors and I noticed a very natural connection and common interests among the hundreds of investors who’ve attended the program and we felt ready to launch a formal network,” said IPI founder and chief executive Charlotte Beyer.
“Investors now have a chance to tap into this newly-created network comprised of the professors from their class – whether they attended the class in 2001 – or 2012,” added Professor Richard Marston, PWM academic director.
According to Professor Marston, after investors complete the program, they often find that they have “even more questions that need objective answers.” For example, following a conversation with their advisor about a particular issue, investors can refer back to professors for their views.
This taps into a trend of peer networks created to allow wealthy investors to discuss common worries and strategies. For example, Money K, head of the next generation at Citi Private Bank, recently told this publication how in some ways the most successful aspect of the program had been the network it created after the event itself (view here).
In the IPI Private Wealth Management program, topics such as the theory behind asset allocation, family dynamics and how investors’ personalities can impact wealth management are discussed, as well as global economic trends.
In order to launch the network officially, there will be a series of dinner meetings. The first is scheduled for October 4 at the Penn Club in New York City, where Professor Marston will address the investors in attendance. Thereafter, the meetings will be held three times a year. The second gathering is due to take place in March 2013 at Wharton, San Francisco.
Published: July 20, 2012
By Harriet Davies - Editor - Family Wealth Report
Millionaires are in the vast majority self-made, and how they made their wealth has a bearing on the way they view and handle their finances, a new survey from Fidelity says.
The survey, covering 1,000 millionaire households, found that 86 per cent are self-made. Furthermore, it found that this group is the most confident about the future financial outlook since the survey began in 1996. On a scale between -100 and +100, millionaires’ future financial outlook stands at +39.
However, their views about the current financial environment remain negative, at -29.
Among the survey’s findings is that “today’s millionaire” is, on average, 61 years old with $3.05 million in assets. Just under three-quarters of millionaires feel they are wealthy, with those who don’t feel wealthy citing $5 million on average as the golden figure that would make them feel rich.
Of the self-made wealthy, their top sources of assets were investments and capital appreciation, compensation and employee stock options or profit sharing, according to Fidelity. Those who were born wealthy were more likely than the self-made wealthy to cite inheritance, entrepreneurship and real estate investment.
The two groups’ investment styles were also slightly different, with people who were born with wealth erring toward real estate, while the self-made wealthy cited equities more often. People born wealthy were also more accustomed to using financial advice, as they made the most of services like personal trust and foundation/endowment management.
Unsurprisingly, the survey also found that the millionaires with more negative opinions about the financial outlook were drawn toward cash-like products, while the more positive millionaires were more active in the stock market.
Finally, the responses contradicted the idea that the younger generation are wealth builders while the older generation are mainly interested in preserving their lifestyle, as of those looking to generate more wealth, nearly two-thirds were older baby boomers or seniors.
Published: July 18, 2012
By Harriet Davies - Editor - Family Wealth Report
Independent registered investment advisors had a record year in 2011, in terms of both assets and revenues, and are now setting their sights on strategic planning and execution, according to Charles Schwab’s latest benchmarking study of the sector.
Despite the flat market performance last year new clients boosted assets under management at RIAs, with the median firm’s client assets rising by 3.8 per cent.
The median firm increased its revenue by 12 per cent, marking the second consecutive year of record highs for the industry.
It should be noted that measuring everything at the median, with no mean, can cause outlying firms to dominate results. The study covered over 1,000 firms, managing more than $425 billion in combined assets, with 105 firms managing at least $1 billion.
In terms of “new clients through the door,” the median firm grew its client base by 8.2 per cent, but taking client departures into account client growth registered at 4.7 per cent, Charles Schwab said. This was flat from 2010 and up from 3.5 per cent in 2009.
Meanwhile, the top 20 per cent of firms who were managing to add the most clients expanded their client base by 14.7 per cent or more (not including departures).
Jon Beatty, senior vice president, sales and relationship management at Schwab Advisor Services, said RIAs had “stayed true to their core mission” of client service, and had achieved growth through this.
Growth and strategic planning
However, slightly fewer advisors felt satisfied with the way their businesses grew last year than the year before (67 per cent versus 69 per cent). This year, growth is the number one priority for over half of RIAs. To achieve this, they believe they have to: maintain quality of client service (81 per cent), close new client business (74 per cent), implement new technologies (63 per cent), and maintain efficient operations (61 per cent).
Meanwhile, RIAs are shifting their focus toward strategic planning. Around 28 per cent of advisors cited this area as one of the barriers to growth – if not done properly. This had grown from 19 per cent in 2007.
“In fact, a number of firms in the study have switched their highest priority initiatives away from marketing and business development, and instead are prioritizing strategic planning and execution,” Schwab said.
Currently, 42 per cent of firms have a written strategic plan in place, according to the study, but one in seven said strategic or succession planning had been a “special initiative” in 2011.
Beatty said that the best managed firms were twice as likely to have a written strategic plan in place, allowing them to “maximize their resources by prioritizing efforts across client service, operations and business development.”
At the median, profits grew faster than revenue, at 14 per cent. Another measure of profits, principal income (the total base, bonus and firm profits per principal), also grew 5 per cent in 2011, averaging $341,000 at the median.
Productivity in terms of revenue-per-professional rose by 6 per cent last year, to $374,000, and per-total-staff also rose to $229,000. Revenue on a per-client basis rose 9 per cent to $8,000.
Last year, business development became less efficient as the cost of bringing in $1 million in assets under management shot up 20 per cent in 2011. “It appears that longer sales cycles are contributing to that increase,” said Schwab.
Daily News Analysis
Published: July 17, 2012
By Tom Burroughes - LondonGroup Editor
Goldman Sachs, the Wall Street-listed investment banking giant, is creating an in-house private bank to serve wealthy customers around the world as it seeks to recalibrate its business, according to the Wall Street Journal.
The bank is designed to boost Goldman Sachs’ deposits, which is a relatively cheap source of funding and less vulnerable to movements in financial markets, such as short-term money market rates, the article said.
The bank was not available for comment at the time that this publication went to press.
The report said the new unit will also lend more directly to corporations, some of which already make investments and do business with Goldman Sachs. Bank executives have set a goal of $100 billion in loans, up from $12 billion at the end of March. The development, however, will not involve any retail branches, Lloyd Blankfein, chief executive, told the WSJ.
Goldman converted into a bank holding company in 2008 to get access to emergency funds from the Federal Reserve when the financial crisis was at its height.
The firm remains best known for its role as an investment bank. It has been caught in controversy for activities such as its role in selling complex mortgage-linked securities to investors while taking advice, so it was claimed, from John Paulson, the hedge fund manager who famously predicted the collapse in the price of such securities. Goldman Sachs executives have also featured prominently among people appointed to high-profile roles in the US government, such as Hank Paulson, former US Treasury Secretary in the George W Bush era, and Robert Rubin, who held the same post in the Clinton administration.
Daily News Analysis
Published: July 05, 2012
By Eliane Chavagnon - Reporter
Bob Diamond resigned as chief executive of Barclays in the wake of a LIBOR-rigging scandal that has rocked the financial industry.
Eaton Vance Investment Counsel, a subsidiary of New York-listed Eaton Vance, appointed William Gillen as vice president of business development.
Gillen will be responsible for enhancing its presence “in the marketplace and overall marketing efforts,” as well as managing select client relationships, reporting to David McCabe, president of EVIC.
Gillen has spent the past 23 years with Eaton Vance Distributors, another subsidiary of Eaton Vance, responsible for the distribution of the firm’s mutual funds, separately-managed accounts and alternative investments.
Brown Advisory strengthened its Boston office, appointing Dune Thorne as partner - a role in which she will also serve as a senior investment and strategic advisor to families, family offices and foundations.
Thorne joins Brown Advisory from Silver Bridge Advisors, where she was a managing director and principal, as well as serving on the management committee. Prior to Silver Bridge, Thorne was the director of investments for Circle Financial Group, an investment and wealth management think tank for ultra high net worth women.
Capital Guardian hired Brian Chapman as president for the independent channel. Chapman was most recently a regional vice president at Woodbury Financial Services, an independent broker-dealer owned by The Hartford.
In his new role he will be based at Capital Guardian’s Charlotte, NC, headquarters and help grow the firm’s national independent channel. He will also act as office of supervisory jurisdiction for the Southeast region.
American Independence Financial Services, the New York investment manager, bolstered its large cap value strategy with a new hire. Richard Baird assumes the role of principal portfolio manager for the large cap division, including the American Independence stock fund.
His background includes roles as senior vice president for Zions Bank and chief investment officer for Western National Trust Company. He also founded Wind River Advisors, which was acquired by Yellowstone, a registered investment advisory firm, in 2009.
In his new role, he is joined by Chris Jacobs as assistant portfolio manager. Jacobs joined Yellowstone in 2010 and supports Baird with equity research and analysis.
Greenwich, CT-based Fieldpoint Private, the wealth advisory and private banking firm, hired Bill Kennedy as chief investment officer.
Kennedy will oversee all of the firm’s investment functions, including research, strategy and asset allocation.
He is formerly of Guy Carpenter & Co, where he ran the firm’s global analytic and advisory division.
Pioneer Investments, the fund manager owned by Italy’s Unicredit, expanded its US operations with a raft of hires and promotions, increasing its US retail sales team by almost a quarter.
In total, 16 new positions were created, bringing the internal and external wholesaling sales staff to 81 - an increase of 23 per cent.
The firm also brought in 15 wholesalers supporting wealth management firms and independent financial advisor firms across various regions throughout the US. Of those, nine were newly-created positions and six were internal promotions or replacement hires. Moreover, 13 new regional sales specialists joined, lifting the size of its internal wholesaling team to 33.
Foundation Source, a firm working with US private foundations, appointed two senior managing directors to cover the east and west regions.
Shannon Baker will serve the west region from a base in Colorado. She joins from Merrill Lynch, where she was a financial advisor working with high and ultra high net worth clients. She has also previously worked at Wachovia Securities. She will look after Colorado, Washington, Arizona, Utah, Oregon, Nevada, Montana, Wyoming, Idaho, New Mexico, Alaska and Hawaii.
Meanwhile, Anna Curry will be based in New York City and work with wealthy clients in the east region, spanning Northern New Jersey, New York and New England. Both report to King McGlaughon, chief executive of Foundation Source.
Greenwich, CT-based Fieldpoint Private, the wealth advisory and private banking firm, took on another New York-based managing director in the shape of David Zoll.
Zoll joins from the wealth and investment management division of Barclays, where he worked with 40 ultra high net worth families. In his new role, he is joined by former Barclays analyst Sarah Kechejian.
Citi appointed Helio Lima Magalhaes as country officer for Brazil, responsible for “establishing strong client relationships and driving growth in the country.”
Lima Magalhaes rejoins the firm from American Express, where he worked for 13 years, serving as head of global networks services for the Americas, country manager for Mexico, and president of American Express Brazil. He previously worked at Citi between 1988 and 2001.
He now reports to Francisco Aristeguieta, Citi’s chief executive for Latin America. He replaces Gustavo Marin, who has served as Citi country officer in Brazil since 2005. It is not clear at present what Marin’s plans are.
California-based Citizens Business Bank appointed R Daniel Banis as executive vice president and head of its wealth management unit, CitizensTrust.
Prior to CitizensTrust, Banis was executive vice president of sales and strategy at MullinTBG, a Prudential Financial firm. There, he led the sales, marketing, relationship management, investment advisory and analytical service groups.
George Sauter is to retire from his post as managing director and chief investment officer at Vanguard on 31 December, when managing director Mortimer Buckley will replace him as CIO.
Sauter joined Vanguard in 1987 and currently directs the firm’s global investment management groups, which oversee a combined $1.6 trillion of Vanguard’s $2.1 trillion in global assets.
In his new role, Buckley inherits a group of over 300 equity, fixed income, risk management and investment strategy professionals.
New York-listed Morningstar named Paul Kaplan as director of research for Morningstar Canada, reporting to president and chief executive Scott Mackenzie.
Most recently Kaplan served as director of quantitative research for Morningstar Europe, where he held a number of research and business development roles over the past 13 years.
In his new role Kaplan will develop methodologies for Morningstar’s fund analysis and indexes, while helping to create tools for advisors and retail investors globally, but with a focus on Canadian research.
Convergent Wealth Advisors promoted its executive vice president David Zier to chief executive, replacing the founder and CEO of eighteen years Steve Lockshin.
Lockshin will retain his role as chairman, concentrating on working directly with new and existing clients, estate planning and “trying to effect change in the industry.”
As CEO, Zier will focus primarily on sales and client service, as well as employee communication and development. Meanwhile, Douglas Wolford, president, will continue to manage the day-to-day operations of the firm. Together, Zier and Wolford will “coordinate strategic and tactical planning.”
FallLine Strategic Advisors, a consultancy firm for the wealth management industry, hired Scott Graflund as a partner.
Graflund is a former managing director and head of technology and operations for Morgan Stanley Private Wealth Management, and former president of Morgan Stanley IT Holdings. In total he was with Morgan Stanley for 22 years, holding senior positions in the US, Switzerland and the UK. He specializes in the IT and operational requirements of wealth management and private banking businesses serving ultra high net worth clients.
RBC Wealth Management added Pedro Cañas to its international wealth management arm as first vice president and international financial advisor.
Cañas joins the firm from Oppenheimer in New York, where he provided wealth management services for high net worth clients in Venezuela and Argentina. Earlier in his career, he worked at ANZ Securities and Bear Stearns & Co, with a focus on Latin America.
The PrivateBank bolstered it private wealth team with the addition of managing directors David Pisarkiewicz and Chris Williams.
Pisarkiewicz and Williams were also appointed as investment advisor and private banker respectively. The pair report to Chris Carman, regional manager of private wealth.
Pisarkiewicz was formerly a senior portfolio manager at M&I Trust Company in St Louis, MO. Before that, he was a portfolio manager with Northern Trust in Chicago, IL.
Williams is also latterly of M&I Bank in St Louis, where he led the private banking team. Earlier in his career he was a private client manager at Bank of America/US Trust in St Louis, as well as a private client manager with Strong Capital Management in Wisconsin.
Canada’s TD Bank Group named Brandon Williams as senior vice president and head of TD Wealth, to lead an “aggressive expansion strategy” in the US, the firm said. Based in New York City, Williams will oversee “all US wealth functions,” serving high net worth, private banking, private investment counsel, private and institutional trust, and mass affluent clients.
He reports to Bharat Masrani, president and chief executive of TD Bank, and Leo Salom, executive vice president of the bank’s wealth advice businesses.
New York-headquartered Bessemer Trust, the US multifamily office, named Rebecca Patterson as chief investment officer, succeeding Marc Stern, who became chief executive in January.
Patterson starts her new role on 16 July and will report to Stern. Her responsibilities as CIO will involve working with Bessemer’s investment team on all aspects of investment management, including asset allocation, strategic portfolio direction and research.
Bank of America eliminated “some managers” from its US Trust unit amid a “company review of expenses,” Bloomberg reported, citing two unnamed sources.
The sources declined to comment with regards to how many of about 40 managers were affected by the review, but they did say that some other managers overseeing private client advisors were also cut.
New York’s BNY Mellon took on Jeffrey Mortimer as director of investment strategy for its wealth management unit, Bloomberg reported.
Based in Boston, Mortimer will lead the firm’s wealth investment strategy committee while setting asset allocations and making investment recommendations for client portfolios.
He reports to Leo Grohowski, chief investment officer of the wealth unit. Mortimer is latterly of Boston-based Bainco International Investors and was CIO for the asset management arm of Charles Schwab before that.
Peak Advisor Alliance, the coaching program for advisors led by Ron Carson, hired Paul West as managing director, replacing Steve Sanduski in the leadership role.
West was formerly president and chief operating officer of a registered investment advisory firm, and was with Securities America before that.
Meanwhile, Sanduski, who joined Peak Advisor Alliance in 2001 as a managing partner, will “remain in partnership with both Peak Advisor Alliance and Carson Wealth.” He will be a “strategic resource” and consultant to the firm, and be actively involved in the rollout of a new book, Tested in the Trenches: A 9-Step Plan for Success as a New-Era Advisor.
deVere Group, a financial consultancy firm, established an office in New York City and appointed Adrian Flambard to manage it.
deVere, which is on a mission to launch 100 offices worldwide over the next five years, is planning to make NYC one of its most important locations, said chief executive Nigel Green.
Flambard recently joined the firm from Kleinwort Benson in Guernsey. He specializes in the expatriate market – the firm’s main focus.
Illinois-based Old Second Bank added Jacqueline Runnberg to its wealth management division.
Runnberg joins from BMO Harris Private Bank, where she served as a vice president.
She will work with high net worth individuals and families on investment advice and management, trust and estate services and financial planning.
Invesco Real Estate hired Timothy Bellman as head of global research, based in the property investment manager’s office in Dallas, TX.
As part of the global research team, Bellman will focus on global asset allocation and coordinate the research efforts led by the firm’s three regional heads of research in North America, Europe and Asia-Pacific.
Bellman joins after seven years in real estate management at ING, most recently as the global head of research and strategy and previously as the Asia-Pacific head of research and strategy. Before that, he was with LaSalle Investment Management as regional director of research and strategy for Asia-Pacific.
The Securities and Exchange Commission appointed Thomas Butler as director of its new Office of Credit Ratings, mandated by Dodd-Frank and charged with oversight of the country’s main ratings agencies.
Butler will oversee a staff or around 25 lawyers, accountants and examiners responsible for monitoring the nine registered Nationally Recognized Statistical Rating Organizations (NRSROs). They will examine each agency on a yearly basis and release a public report.
Genworth Financial Wealth Management, a subsidiary of Genworth Financial, appointed Rico Casares to lead the southeast region within its practice management consulting team.
The current team is made up of James Mackiewicz, who joined earlier this year and covers the central states; Dana Marino, covering the west; and Gretchen Golembewski, who has been with the firm since July 2011 and covers the northeast. The trio reports to Matt Matrisian, director of practice management.
Manulife Financial has named Craig Bromley as senior executive vice president and general manager of its US division, as well as president of John Hancock Financial Services.
As of 1 September, Bromley will take over from Jim Boyle, who is retiring after 20 years at the firm. Boyle will remain at John Hancock until the end of the fiscal year so as to “facilitate a smooth transition.”
In his new roles, Bromley will report to Manulife president and chief executive Donald Guloien. He will also join the executive committee.
PGB Trust & Investments, the wealth management division of Peapack-Gladstone Bank, hired Lisa Berry, Bruce Ficken and Erik Vadeika as vice presidents.
In addition to their roles as vice presidents, Berry and Ficken were appointed as wealth advisor and senior financial consultant respectively, while Vadeika also serves as senior portfolio manager.
Berry, with over 25 years of wealth management experience, was formerly a vice president and trust officer at US Trust.
Opes Advisors, a wealth management firm and mortgage bank, took on Aurora Dreyer as a real estate investment advisor.
Dreyer will lead the firm’s real estate investment advisory services, advising clients on how to ensure their investment returns are “maximized and managed effectively.” She will also provide research and analysis on the overall real estate market, including real estate capital markets and residential housing markets.
Prior to joining Opes, Dreyer served as vice president and regional asset manager for Bank of the West/BNP Paribas, as well as property and operations manager for Pacific Realty Associates.
G2 Investment Group, the private investment firm, brought in Peter Rockefeller as managing director to develop the firm’s investment origination and capital-raising capabilities.
Rockefeller will develop relationships with new clients for G2-sourced investment opportunities. He will also work with families on a global basis to discuss investments, asset allocation, philanthropy and legacy issues.
Rockefeller’s past experience includes mergers and acquisitions, corporate finance and capital markets, private equity and investment strategy. He is formerly of Berkshire Capital Securities, a New York-based mergers and acquisitions advisor focused on serving clients in the investment management and securities industries.
Opes Advisors, a wealth management firm and mortgage bank, added Alex Katz to its wealth management division as vice president of business development.
Katz will lead strategic and tactical planning, sales development and market share growth while managing the wealth advisory team. Prior to joining Opes, he held group vice president positions for over 10 years at Fisher Investments, leading their sales, trading and investment operations, and research divisions.
Enterprise Bank & Trust, the banking subsidiary of Enterprise Financial Services, promoted Scott Goodman to executive vice president and director of commercial banking services and wealth management.
Goodman is responsible for Enterprise’s fee income-producing divisions, including Enterprise Trust, the firm’s community development entity and the bank’s mortgage, treasury management, international banking and tax credit lending and brokerage activities.
Goodman was formerly president and chief credit officer for the bank’s St Louis, MO, region. He is replaced in this role by James Lally, president of the bank’s Clayton, IN, banking unit, who serves as president.
New York’s BNY Mellon added Tom Hamilton to its team of wealth strategists for its western Pennsylvania, Ohio and greater Chicago, IL, businesses.
Hamilton will be based in Pittsburgh, PA, reporting to Don Heberle, head of international and client segments.
Prior to joining BNY Mellon, Hamilton served as a wealth advisor at Wells Fargo and was a director within the wealth group at Grant Thornton before that.
Stratos Wealth Partners, a registered investment advisory firm, added former Morgan Stanley Smith Barney advisors Craig Adams and Steve Beierlein to its newly-created office in Ogden, UT.
Adams and Beierlein were both appointed partners, as well as wealth advisor and branch manager respectively. The pair has 70 years of combined experience in the financial services industry and “maintain a direct partnership with Stratos,” the firm said.
Ballentine Partners, the Waltham, MA-based wealth management firm, named William Braman as chief investment officer.
Braman has 30 years of experience in the asset management industry. At Ballentine, he will lead an investment team which oversees around $6.5 billion in assets under advisement, spread across traditional investments, hedge funds and private equity.
Before joining Ballentine, he was chief executive of Fortis Investment Management USA, until its recent acquisition by BNP Paribas. Prior to that, he was CIO at John Hancock Advisers, and at Baring Asset Management before that.
California’s Beverly Hills Wealth Management appointed industry veteran Steven Stahlberg as western division director.
Stahlberg joins BHWM with over 30 years of industry experience and will focus on growing and developing the firm’s presence on both a regional and national scale.
Mark Schwartz returned to Goldman Sachs as a vice chairman and chairman of Goldman Sachs Asia-Pacific, based in Beijing.
Schwartz will represent “the importance of China” and the Asia-Pacific region to the firm’s overall business.
New York-based J Michael Evans, chairman of Asia-Pacific since 2004, will continue in his role as a vice chairman of the firm and global head of growth markets.
Schwartz will work alongside Masa Mochida, president of Goldman Sachs Japan, and David Ryan, president of Goldman Sachs Asia-Pacific Ex-Japan. He will rejoin the firm’s management committee, on which he served from 1999 - when the firm went public - until his departure in 2001.
Houston, TX-based US Capital Advisors took on Clifford McTee as a managing director and Austin, TX, market manager.
At US Capital, McTee is responsible for the expansion and management of the firm’s wealth management business in the Austin market. He was previously a senior vice president overseeing 13 wealth management offices in central and West Texas at Wells Fargo Advisors
Sloan Wealth Management, the Dallas, TX-based investment advisory firm, appointed Christopher Davis to manage the investment portfolios of a select group of private clients.
Davis has over 16 years of experience in building businesses and client advisory relationships within the public and private markets. Prior to joining Sloan, he was a vice president at Bernstein Global Wealth Management.
In his new role he works with clients and their advisors on investment matters including tax and estate planning, concentrated stock positions and the sale of privately-held businesses.
Opes Advisors, a wealth management firm and mortgage bank, added Richard Cunningham to its wealth management division as director of investment strategy and research.
Cunningham is a chartered financial analyst, with over 17 years of experience in portfolio management and investment research. At Opes he will lead tactical asset allocation strategies, money manager selection and portfolio risk management.
Before Opes, Cunningham was a senior portfolio manager at Morgan Stanley. He was also previously chief investment officer for the western market for Comerica Bank, and regional investment manager for Northern California at Bank of the West.
Morgan Stanley Smith Barney promoted firm veteran Michael Outlaw to managing director within its wealth management office in Atlanta, GA.
Outlaw has been with MSSB and its predecessor firms since 1996.
BNY Mellon appointed Edward Watson as executive vice president and chief operations officer – a newly-created position.
Watson will serve as a member of the global operating committee, reporting to Kurt Woetzel, head of global operations and technology and chief administrative officer.
At BNY Mellon, he will lead “the centralization of certain operations” and “oversee operational activities in our global delivery centers and have responsibility for operations functions that today reside in our businesses,” Woetzel said.
Wells Fargo snapped up new advisor hires with more than $1.99 billion in assets under management in its private client group, bank branch-based wealth brokerage services and independent financial network in the past several weeks.
The largest team joining the private client group was John Taitague, Tom Krahe, Matt Tatum and Tom Doyle, who join in Richmond, VA, from Suntrust. The team previously had $520 million in assets under management and $3.1 million in annual fees and commissions, the report said. Also joining Wells Fargo with the team were client associates Jennifer Smith and Davis Walker. The team reports to Richmond market manager Rob Withers.
The McFadden Group, including financial advisors John McFadden and Pari Hashemi, also joined the private client group in Philadelphia. They joined from Morgan Stanley Smith Barney, where they had $268 million in assets under management and $954,000 in production. The team reports to branch manager David Lojpersberger.
Also joining the private client group from Morgan Stanley were financial advisors Alan Metheny, David Clarke and Gary Ledbetter. The team joins in Walnut Creek, CA, and previously had $244 million in assets under management and $2.6 million in production. They report to branch manager Kevin Smith.
Two more advisors, Robert Shelton and Donald Reed Mayne, also joined the firm’s private client group from Morgan Stanley. Shelton joined in Lafayette, LA, after overseeing $155 million in client assets. Shelton reports to branch manager Ken Meyers. Mayne joined in La Jolla, CA, after having $107 million in assets under management. He reports to branch manager David Jones.
In addition, Wells Fargo hired William Kennedy from Morgan Keegan to its private client group in Hot Springs Village, AR. Kennedy previously had $125 million in assets under management, and reports to complex manager Greg Strnadel.
In wealth brokerage services, the firm’s business based in bank branches, Wells Fargo hired Robert Moreland in Baltimore, MD, from Merrill Lynch. Moreland previously had $100 million in client assets under management and $868,000 in annual production. He reports to regional brokerage manager Joshua Ritz.
Wells Fargo also hired two new financial advisor teams to its independent financial network with more than $489 million in assets under management, according to OnWallStreet. Floe Financial Partners moved to Wells Fargo from LPL in Pasadena, CA. The 12-person team includes advisors Robert Floe, Kenneth Sanchez and Lee Wolfe. Together, they had more than $380 million in assets under management.
Spruce Private Investors, a wealth management firm based in Stamford, CT, added Donald Herrema as a senior advisor.
Herrema is executive vice chairman and chief executive of Kennedy Wilson’s capital markets group. Under the partnership with Spruce, he will advise the firm on strategic and investment issues. He joins Nouriel Roubini, who has been a senior advisor to Spruce on global economic issues for three years.
Cincinnati, Ohio-based Fifth Third Bank strengthened its private banking team with the addition of Cody Tellis as president and wealth management advisor to cover the Bowling Green, KY, and Nashville, TN, markets.
Tellis is a relationship manager, working with affluent clients on asset protection, financial planning, estate review, risk management, generational wealth transfers, captive insurance planning and asset management.
Prior to joining Fifth Third, he served as a wealth management advisor in the Bowling Green community for four years. He is a certified financial planner and is currently pursuing his CPA license.
Eaton Vance, the US investment management firm, appointed Aaron Dunn, J Griffith Noble and Jason Kritzer as senior research analysts and vice presidents
Dunn joined the large-cap energy research team on 7 May while Noble, who joined on 21 May, is responsible for covering the small- and mid-cap energy and industrial sectors. Kritzer started on 31 May and analyzes the large-cap healthcare space.
The trio reports to Charles Gaffney, director of equity research.
Citi Private Bank employed Jane Monahan as director and head of its Delaware Trust business.
Monohan is based in New Castle, DE, and reports to Pete Randazzo, US trust administration head.
Monahan joins from RBS Coutts Trust & Fiduciary Services, where she was executive vice president and managing director. There, she lead the firm’s fiduciary business in Geneva, Switzerland.
BlackRock’s chief equity strategist Bob Doll decided to retire after 34 years at the firm.
Doll had managed BlackRock’s large cap fund series since 1999. In light of his retirement, the firm appointed Chris Leavy, chief investment officer of fundamental equity (Americas), to manage the LCS portfolios, along with Peter Stournaras, who has co-managed the series since 2010.
Raymond James & Associates, the broker/dealer subsidiary of Raymond James Financial, appointed Lisa Detanna as senior vice president of investments within its Los Angeles branch.
Lisa Detanna is a southern California financial professional, wealth advisor and a former president of the Beverly Hills Chamber of Commerce.
Alexander Friedman, UBS Wealth Management’s chief investment officer, will hold this position globally for the Swiss firm, including the Americas wealth management segment.
The Presidio Group took on 27-year investment industry veteran Thomas Smith as managing director within its capital advisors unit. Smith is tasked with launching an office in Chicago.
The new office was due to open at the end of the month - at 155 North Wacker Drive. Mark Palmer, head of the capital advisors unit, said the firm expects to hire additional advisors and staff for the office over the next 12-18 months.
Citi Private Bank added ultra high net worth private bankers and directors to its teams in Colorado and Texas.
The bank brought in Brian Becker in Denver, reporting to to Mark Connally, Southwest region executive.
Becker is latterly of JP Morgan Private Wealth Management, where he was a vice president in Denver. Before that he spent three years at Bernstein Wealth Management, also in Denver.
BNY Mellon’s wealth management business hired Patrick Cappatt as a senior sales director throughout the Pittsburgh region. He joined the firm in April and reports to Philip Spina, senior vice president of sales.
Cappatt’s 30 year-career includes two decades with “Big Four” consulting and advisory firms. Before joining BNY Mellon Wealth Management he was a strategic global account relationship director at KPMG.
AllianceBernstein boosted its alternatives business with the appointments of senior vice presidents Christopher Bricker and Michael Gaviser, as head of business strategy and head of sales and client service respectively.
Gaviser joined AllianceBernstein 14 years ago, and was most recently co-head of alternatives sales and client service with John Akkerman. Akkerman left the firm to “pursue another opportunity.”
Bricker, a 20-year AllianceBernstein veteran, will assume “overall responsibility” for the $13 billion alternatives platform, which includes multi-manager strategies, proprietary hedge funds and closed-end drawdown funds. He will also remain head of product development.
Gaviser will lead the firm’s client-facing efforts, which involves expanding and developing the team of alternatives
The World Wealth Report 2012 highlights that although the median age of high net worth individuals is declining the same cannot be said of advisors.
Published: July 03, 2012
By Eliane Chavagnon - Reporter
While older, successful advisors play a “crucial role” in maintaining and expanding the existing client base, as well as “grooming” young advisors, the Capgemini/RBC report warns that essential client needs could go unmet if the more “tenured” advisors opt for advisory methods which don’t resonate with younger HNW individuals.
“Firms will therefore need to map advisors to the appropriate category of clients to ensure the relationships are well-matched, and perhaps develop a younger advisor workforce for younger HNW individuals to relate to,” the report recommends.
The notion that the average HNW individual is getting younger is significant because the current and next generation of advisors must adapt to clients’ changing financial needs and objectives.
However, the number of advisors in the US representing the 60 to 69 age range actually fell from 24.1 per cent in 2008 to 16 per cent in 2011, according to figures from the College for Financial Planning.
While this is an important find, the underlying issue is that high and ultra high net worth individuals tend to want “very sophisticated relationships and don’t necessarily want to work with someone who is up-and-coming,” Rowan Taylor, vice president at Capgemini Financial Services, told journalists during a media briefing on the global report.
With this in mind, it is somewhat unsurprising that data from Cerulli Associates shows that last year over one-fifth (22 per cent) of all advisors were in fact at least 60 years old.
“In the US, the financial advisory workforce is certainly aging across the board and even more quickly in specific segments. The average advisor age has crept from 48 to 53 over the past decade, implying limited recruiting of younger advisors,” Chip Roame, managing partner at Tiburon Strategic Advisors, told this publication.
“The wirehouses have cut back substantially on recruiting programs and have also laid off many underperforming younger advisors. The net result has been a decline in the numbers of wirehouse advisors,” Roame continued. “Similarly, the independent rep and RIA channels have aged. And very important, if the client assets of advisors are dollar-weighted, the average age across the board is closer to 60. The industry has a recruiting challenge.”
Demographics “continuously skewed”
While the demographic makeup of the world’s workforce is changing because people are living and working for longer, the demographics of the financial advisory industry are “continuously skewed towards older advisors,” explains Tyler Cloherty, senior analyst at Cerulli, speaking to Family Wealth Report.
As the current cohort of senior advisors edges closer to retirement, firms must find ways to ensure that younger advisors are properly trained with the skills to successfully follow in their predecessors’ footsteps, safeguarding both new and existing client relationships.
However, trust – a crucial aspect of wealth management - “comes with many years of experience,” he explains. “Clients want to give their money to someone who has grey hair, not to someone who left college two years ago and has no experience.”
Younger financial advisors, even though some may be very good, aren’t able to generate the measure of trust necessary, he says, adding that it’s a challenge which hasn’t been easy to overcome.
“Most clients want to deal with someone who is about their age, and people’s financial wealth peaks in their fifties and sixties, which is why you see assets peaking for advisors within those age ranges as well.”
If it is true that people want to deal with an advisor of a similar age – although it’s worth noting that some in the industry contest this – then this presents a significant problem. In the coming years, according to The Bureau of Labor Statistics, the primary driver of growth within the personal financial advisory space will be the aging population.
“As large numbers of baby boomers approach retirement, they will seek planning advice from personal financial advisors,” the organization says in its Occupational Outlook Handbook for 2011.
This is perhaps why the Bureau forecasts job growth in the industry in the period 2010 – 2020 that is much faster than the average in the US.
However, the top-line numbers of the industry are beginning to stagnate and even decline to some extent, Cloherty warns. “More advisors are retiring and leaving the industry as they grow old, compared to new talent coming into the industry.”
Human capital management as risk management
The financial turmoil of 2008 resulted in many of the programs for new trainees being cut or “brought down significantly,” which Cloherty asserts is where the hidden issue lies. The volume of new talent has taken a beating, but the industry has yet to establish an effective way of recruiting new and successful advisors.
This idea ties with the view of Dr Jim Grubman, of FamilyWealth Consulting, who says: “If you don’t look ahead five years or more, making sure you are developing a deep bench of capable client advisors, the aging of the senior people is going to become a serious risk to the firm’s longevity.”
Interestingly, however, Grubman advocates a slightly different view about the concept of an aging advisor workforce. He believes the demographics in wealth management are “actually bifurcating,” with a large volume of senior advisors and firm owners reaching their sixties while a new and “equally large” group of young advisors fill many of the client-facing positions.
Yet Grubman acknowledges that the statistics on client retention when an advisor leaves or when generational wealth transfers occur “aren’t great.” In response to this, many firms have started to gravitate towards a team-based model in a bid to boost the expertise of younger advisors.
Emotional intelligence versus technical skills
The team-based approach involves one senior or “lead advisor” collaborating with specialists and, most importantly, junior-level advisors. This gives junior advisors the opportunity to meet top-level clients whom they perhaps wouldn’t get the chance to meet otherwise. Nevertheless, there are important questions to address about the effectiveness of such training.
A training model focused on mentoring and modeling client relationship skills “has its risks,” Grubman says. “There are potential problems with that, because a lot depends on the individual capacities of both the trainee and the mentor.
“For example, we know that emotional intelligence makes a big difference in this area, but many younger financial advisors aren’t necessarily skilled in emotional intelligence versus technical intelligence. Just because someone is teamed up with a more senior advisor doesn’t mean they’re going to be able to pick up on the mentoring and the modeling,” he says.
Rather, Grubman raises the question of how the current successful, more senior advisors initially developed their own expertise in this field.
Often, this was more of an informal “apprenticeship” model whereby skills such as listening, how to draw out clients’ concerns, and how to interview appropriately may not have been taught very well. “A lot of what is attempted to be mentored are the client relationship skills, not just technical skills. But not everyone with good client skills is good at teaching them.”
However, even the traditional informal apprenticeship model may not be sufficient for the modern firm or the modern investor, he remarks. “What’s happening in the industry now is a better combination of more formalized assessment of emotional intelligence capacity in potential hires, along with better methods for teaching these skills using effective techniques.”
He also observes that young advisors have “quite literally never encountered a sustained bull market and don’t know what it’s like or how to do planning for it. At some point, those skills will be needed again.”
Advisors working for longer
Cloherty anticipates that the average age of financial advisors will gradually “tick up” further, as advisors find it increasingly difficult to retire when confronted with issues such as the value of their practice not matching their expectations.
In turn, more advisors will probably “phase out” over time, taking part-time roles or transitioning slowly while still retaining a portion of their income. In doing so, with the assets they generate they’ll be more inclined to boost the size of their team, taking on more junior advisors, which will help “stem the tide” of an overall decrease in advisor population.
But despite these forecasts, as Grubman says, it’s a complex situation which in part relates to normal demographics - the fact that senior people are often more experienced and skilled - but equally, and perhaps most crucially, that firms must plan ahead for this in the modern era.
Indeed, the very concept of an aging advisor workforce is encouraging firms to recruit more “up-and-coming” advisors with greater emotional intelligence and skill capacity, but there’s also a growing emphasis on the need to train them effectively, over a longer period of time, to prepare them for handling the “client of the future.”
Daily News Analysis
Published: June 22, 2012
By Eliane Chavagnon - Reporter
Convergent Wealth Advisors has promoted its executive vice president David Zier to chief executive, replacing the founder and CEO of eighteen years Steve Lockshin.
The firm said Lockshin will retain his role as chairman, concentrating on working directly with new and existing clients, estate planning and “trying to effect change in the industry.”
As CEO, Zier will focus primarily on sales and client service, as well as employee communication and development. Meanwhile, Douglas Wolford, president, will continue to manage the day-to-day operations of the firm. Together, Zier and Wolford will “coordinate strategic and tactical planning,” the firm said.
Convergent has $10 billion in assets under management, as at 31 March. It has offices in Washington, DC, Los Angeles, New York and Portland, OR, and is a majority-owned subsidiary of New York-listed Convergent Capital Management, the parent company of City National Bank.
A record 62 per cent of ultra-wealthy respondents to the Institute for Private Investors’ annual performance survey reported using an advisor for over half their wealth.
Published: June 06, 2012
By Harriet Davies - Editor - Family Wealth Report
The IPI Family Performance Tracking survey, which covered 57 families with at least $30 million in assets, is conducted in two parts. Data released earlier this year revealed families’ anticipated investment strategies while the latest survey, completed in April, examines actual allocations and performance.
It found that 45 per cent of respondents increased their allocation to commodities, while 31 per cent increased their exposure to real estate, and 22 per cent to private equity. “Investors also increased their municipal holdings and decreased investment in hedge funds/funds of funds,” said IPI.
Wealthy families are worried about geopolitical risk and domestic policy shifts, according to the survey, with 70 per cent of respondents expressing concern about this. Nearly half of respondents were concerned about the scarcity of yield opportunities.
Returns for 2011 “varied widely,” said IPI, from -10 per cent to 25.1 per cent net of fees. The majority of families, though, reported returns in the range of -2.16 per cent and 2.28 per cent net of fees. Families seeking principal protection last year fared better than those pursuing growth, with nearly two-thirds of the first group achieving positive returns compared to less than half of the second group.
“This year’s data reinforced the investment trends we have been seeing among the ultra-affluent as far as the rise in allocation to commodities and real estate, and the continuing popularity of direct investment in private companies,” said Mindy Rosenthal, IPI executive director. “Families are also concerned universally about risk, both abroad and at home.”
Daily News Analysis
Published: June 04, 2012
By Harriet Davies - Editor - Family Wealth Report
Wealth advisory firms are standardizing their processes across regions and offices, according to a new study from Family Office Exchange.
The study, called Enhancing the Client Service Experience, found that wealth managers are: automating processes, eliminating inconsistencies between regions and offices, and creating designated teams responsible for process improvements and consistency.
Firms are also doing more “to demonstrate the client experience in their sales processes,” said FOX. This includes adopting a “more involved needs assessment” during the sales process and aiming for “white glove” treatment in all aspects, from responsiveness to scheduling meetings.
“Standardization can help advisors become more efficient, while giving firms a more sustainable business model over the long term,” said David Lincoln, managing director of research.
A study released last week by Pershing said that, while some RIAs have regained profitability since the financial crisis, those who have failed to adapt are “literally paying the price.” Furthermore, the study said “most” RIAs had not made the necessary operational changes to tackle rising costs.
Among the suggestions for improving efficiency the Pershing study said RIAs should target more homogenous clients and create efficient and consistent workflow systems.
Published: May 30, 2012
By Tom Burroughes - Group Editor
Two of the most famous business and financial dynasties in the US and Europe will join forces after Lord Jacob Rothschild’s listed investment trust and Rockefeller Financial Services agreed to form a strategic partnership.
RIT Capital Partners (of which Lord Rothschild is chair) is to buy the 37 per cent equity stake previously held by Société Générale Private Banking in Rockefeller Financial Services for an undisclosed sum. Other Rockefeller Financial stakeholders include “the Rockefeller family, related entities and the management team,” RIT said in a statement.
France’s Société Générale formed the alliance with Rockefeller Financial in 2008, highlighting the linkage that already existed between the US financial institution and Europe.
The new arrangement unites patriarchs David Rockefeller, 96, and Lord Rothschild, 76. David Rockefeller said: “Lord Rothschild and I have known each other for five decades. The connection between our two families remains very strong. I am delighted to welcome Jacob and RIT as shareholders and partners in the ongoing development of our investment management and wealth advisory businesses.”
The Rockefeller group traces its roots back to 1882 when John Rockefeller established one of the world’s first family offices dedicated to investing his wealth. It has since developed into a provider of wealth and asset management services to other families, foundations and institutions. It is majority-owned by the nineteenth century oil magnate’s family and has $34 billion of assets under management.
The partnership with RIT will focus on setting up investment funds, eyeing joint acquisitions of wealth and asset managers and granting each other non-executive directorships, according to the Financial Times. RIT Capital Partners is minority-owned by Lord Rothschild and its net assets of £1.9 billion are spread across global investments from public equities to government bonds and private equity.
There are other developments affecting the Rothschild dynasty. For example, Baron David de Rothschild, chairman of Rothschild Group, is currently bringing the UK-based investment bank under a joint roof with the French family operations. The reorganization will reunite the shareholdings of the French and English sides of the family into a single company, listed in Paris.
The deal between Rockefeller and RIT is expected to close in September and is subject to regulatory approval.
Published: May 29, 2012
By Harriet Davies and Max Skjönsberg - 29 May 2012
Editor’s Comment: As part of a series analyzing the Californian wealth management industry, here Family Wealth Report shares insights from firms on their Californian operations. Although by no means inclusive, the information is intended to give readers an idea of the many flavors of wealth manager flourishing on the West Coast. To view the first part click here.
Rothstein Kass Family Office Group, part of the eponymous consultancy firm, has offices in Wilshire Boulevard and Montgomery Street, spots the firm chose due to their “thriving business communities.”
It segments the state into: Southern California, with a strong concentration of business managers, legal and investment advisors, and “gatekeepers” to the wealthy; Central California, “home to an enclave of regional and national banks” and investment advisors – whose high level staff and clients qualify as potential clients; and Northern California, “one of the most active markets for multifamily office operations in the US.”
As Rothstein Kass does not offer investment advice, it views part of its niche as providing outsourced services to single-family offices – usually with around $100 million assets – and investment managers. It counts athletes and entertainers among its California client base, which comprises over a dozen ultra-wealthy clients.
Its provides services including balance sheet management, liquidity cash management, bookkeeping, income and estate tax planning, investment reporting and general project management.
Northern Trust, the Chicagoan stalwart, entered the California market in 1987 with a Santa Barbara office.
“When Northern Trust opened its first California office in the late 1980s, the average price of gas was less than $1 per gallon, the internet was in its infancy and the first President Bush was in office,” Steve Bell, chairman and CEO of the west region, told Family Wealth Report.
Since then, much has changed, and with it the firm’s coverage has expanded to ten offices in five markets (San Francisco, Santa Barbara, Los Angeles, Orange County and San Diego), staffed with around 260 employees.
Strategically, Northern Trust views California as part of the West Region, which also includes Washington, Nevada, Arizona, Colorado and Texas, all of which Bell heads up. It then breaks California down into Northern California, Santa Barbara, Los Angeles, Orange County and San Diego.
Its offers a lifetime goals and values-based approach to wealth management, says Bell, covering financial planning, private and business banking, investment management, trust and estate services, advisory, foundation and institutional advisory services.
CitizensTrust has two offices in the state, in Pasadena and Ontario, with a history in California dating back to 1912, making it one of the oldest trust companies there, according to Chris Walters, executive vice president.
It views California as a “distinct market” and further parses it into North/Central, Los Angeles and Orange/San Diego counties. It segment clients by the size of their investment portfolios: affluent (under $1 million portfolio), HNW (under $10 million), and UHNW ($10 million+).
It serves “individuals, families, foundations, endowments, institutions and governmental entities,” all of whom are looking for “continuity, discretion and accountability in the management of their assets,” says Walters.
“We are not a brokerage firm, nor are we owned by one. We are not compensated in any way other than our advisory fee.”
It offers proprietary investment strategies and third-party manager selection and gives clients the option to use either of these or a mix of both.
The multi-family office Silver Bridge has been ramping up its West Coast presence over the last 12 months, expanding its physical presence from solely the East Coast, in Delaware and Massachusetts, to Berkeley and San Francisco. It has been serving clients on the West Coast for around 20 years.
California, which is segmented into northern/southern, is the “central focus” of the firm’s West Coast team.
The firm has six advisors based across its West Coast offices serving a client base of 40, representing around $1 billion assets.
Its focus is on multi-generational and business-owning families. Its service mix consists of wealth planning, including philanthropy services; financial management, administration and consulting (including family office and business consulting); and research and education, delivered through the Silver Bridge Institute.
Salem Partners is a privately-held Los Angeles based investment banking and wealth management firm, co-founded in 1997 by John Dyett and Stephen Prough. The wealth management division is a registered investment advisor with the SEC.
In the main its clients are successful entrepreneurs, with at least $10 million in investable assets. “Fortunately for us, there is an abundance of these families on the West Coast,” said Salem Partners. It does not differentiate prospects by whether they are based in Northern or Southern California and counts California as part of its West Coast client-base.
It manages the assets and financial lives of 20 families, representing over $250 million in assets, from its LA base, where it has six professionals.
With an investment banking division, the firm’s focus is squarely on entrepreneurs and business owners and the niche services required right from the early stage - of “business planning, seed-stage capital raises and institutional venture capital raises with an eye to the long-term impact these decisions have on wealth management.”
“Business owners seeking wealth management services confront a complex set of challenges and opportunities that calls for expertise beyond strong portfolio management,” said Salem Partners.
City National Bank
City National Bank has around 50 client-facing advisors in California spread across offices in San Francisco, Palo Alto, San Jose, Walnut Creek in the northern part of the state, and Pasadena, downtown Los Angeles, Beverly Hills, Irvine and La Jolla in the southern part. The firm defines the transition between HNW and UHNW as starting at $10 million in investible assets, but it prefers to segment clients by needs. It also divides them into sources related to their wealth, for example entertainment, technology, healthcare, real estate and the legal profession.
The firm offers investment management and investment advice as well as family legacy planning, estate and wealth transfer, deposit and liquidity management.
When describing the differences in the nature of the wealth management business in California compared with the rest of the country, the firm said that there might be slightly more focus on growth rather than wealth preservation because of the entrepreneurial mentality in the state.
CONCERT’s business model is to help what it calls “captive” financial advisors of HNW and UHNW clients at wirehouses to become independent and own their own businesses, while supporting them with back and middle offices systems. Roughly half ($443 million) of its total assets under management of $1 billion are based in California. The firm has 22 independent advisors in California and 11 offices in Carmel, Los Altos, Menlo Park, Folsom, Irvine, Los Angeles, San Diego, San Jose, San Mateo, Walnut Creek and Westlake Village.
Beverly Hills Wealth Management
Having started just two years ago, Beverly Hills Wealth Management has 150 clients and $250 million in AuM. The firm has eight advisors in the golden state across two offices. One of them is, quite naturally, in Beverly Hills and the other one in San Diego. The investment advisory firm launched the San Diego base earlier this month and added a financial advisor in the shape of Taylor Schulte to spearhead it. The firm has also an office in Phoenix, AZ. The firm defines HNW as someone with a net worth or around $5 million and investible assets of at least $1 million, and UHNW as £25 million in net worth and investible assets of $5 million.
Among the wealth manager’s services are portfolio management, tactical and strategic retirement planning, international trading, private equity, alternative investment, insurance and trust services.
Daily News Analysis
Published: May 29, 2012
By Eliane Chavagnon - Reporter
Coral Gables, FL-headquartered Gibraltar Private Bank has named Adolfo Henriques as chairman, president and chief executive. He takes on the responsibilities from Steven Hayworth, who has left the firm.
Henriques joined the bank in February 2011 as vice chairman, president and chief operating officer. It is unclear at this stage whether he will continue to serve in these roles.
Previously, Henriques was vice chairman of the Related Group, and chairman, president and CEO of Florida East Coast Industries. Earlier in his career, he was chairman of NationsBank for south Florida and CEO of the south region for Regions Bank.
His appointment at Gibraltar Private remains subject to regulatory approval.
The former managing director of wealth management at the bank, Matthew Lapides, resigned last June, according to media reports at the time, which said Henriques had assumed the wealth management responsibilities on an interim basis.
In October 2010 the Coral Gables-based bank was served with a cease and desist order from regulators, citing unsound banking practices related to its Bank Secrecy Act and Anti-Money Laundering policies and procedures, as well as problem loans.
It was established in 1994 and offers residential and commercial lending, private banking and wealth management services to professionals, corporate executives, entrepreneurs, affluent retirees and businesses.
The bank has eight full-service private banking and wealth management relationship offices including Florida’s Coral Gables, Fort Lauderdale, Downtown Miami, Miami Beach, South Miami, Naples, Ocean Reef and New York.
Daily News Analysis
Published: May 22, 2012
By Harriet Davies - Editor - Family Wealth Report
In a busy month of hiring at the firm, Citi Private Bank has ramped up its Northeast operations with the launch of a Greenville, DE office.
Leading the Greenville team are Barbara McCollum, Southeast Pennsylvania and Delaware region executive, and Bob Rosenberg, managing director and ultra high net worth private banker. Other team members are Paul Gordon, senior investment consultant; Tim Carroll, wealth planner; and Jennifer Phillips, banker associate.
The Greenville staff will work closely with colleagues at Citi Trust, which has an eight-person team based in New Castle, DE.
“Our new Greenville office will enable us to deliver the full power of Citi’s global institutional platform for our clients – locally,” said McCollum.
Some of the new team are moving from Citi’s office in Philadelphia. Meanwhile, the private bank’s Philadelphia office is relocating from 1818 Market Street to One Liberty Place in Center City and will continue to work with Pennsylvania-based clients, the firm said. It is also planning a third office for wealthy clients in Conshohocken, PA in the fall “to round out its presence in the region,” it said.
So far this month City Private Bank has hired Michael Hatch to its Seattle office as director and ultra high net worth private banker, Michael Sak as vice president and private banker within its law firm group, and Nevada Mohammed as director and investment counselor at its Vancouver office.
Daily News Analysis
Published: May 14, 2012
By Tom Burroughes - Group Editor
Editor’s note: Here is a summary of first-quarter results for private banks and wealth management firms. While all possible care has been taken to present results accurately, not all of the figures here may be strictly comparable.
Switzerland’s largest bank said wealth management pre-tax profit was SFr803 million ($1.3 billion) in the first quarter of 2012 compared with SFr471 million in the previous quarter, and included a reduction in personnel expenses of SFr237 million related to changes to its Swiss pension plan. Adjusted for this item and restructuring charges, pre-tax profit increased by SFr110 million to SFr578 million.
In the Americas business of UBS, meanwhile, the division achieved its highest reported quarterly pre-tax profit of $209 million in the first quarter of 2012 compared with $156 million in the prior quarter. “The quarter was marked by higher transactional activity and included higher realised gains on sales of financial investments in the available-for-sale,” it said.
Credit Suisse said net revenues at its private banking arm stood at SFr2.651 billion ($2.91 billion) in the first quarter of this year, a rise of 3 per cent on the previous quarter. Private banking comprises the global wealth management clients business and the Swiss corporate and institutional clients business. The wealth management clients business reported net revenues of SFr2.185 billion, 10 per cent below the first quarter of 2011 and 3 per cent above the fourth quarter of last year, both mainly due to transaction-based revenues. Income before taxes was SFr406 million in the first quarter of this year compared to SFr624 million in the first quarter of 2011 and to SFr285 million in the fourth quarter of 2011.
Lloyds Banking Group
Lloyds, the UK banking group partially owned by the government, posted an impairment charge for its wealth segment of £705 million ($1.14 billion) for the first quarter of 2012, down from £1.5 billion for the same period last year.
The wealth business of the banking group falls within the “wealth and international” arm of Lloyds, which covers a number of business interests besides private banking, such as operations in Ireland and Australia. The impairment charge was also significantly lower than the £1.32 billion the bank reported for its wealth and international segment for the final three months of 2011.
The wealth and investment management arm of UK-listed Barclays reported a pre-tax profit of £60 million (around $97.1 million) in the first three months of 2012 from £46 million a year before, while total profit – on an adjusted basis - across the entire bank rose to £2.445 billion, a 22 per cent year-on-year rise. This is the first time that Barclays has issued results for its wealth business since it rebranded from the old Barclays Wealth name earlier this year. The wealth and investment business reported a cost/income ratio of 85 per cent in the first quarter, a slight fall from 86 per cent a year earlier.
HSBC today reported that first quarter pre-tax profit for its global private banking segment in the first quarter of 2012 fell by $22 million year-on-year to $286 million, hit by weaker revenues and higher loan impairment charges, partly offset by lower operating costs. Fee income declined, driven in part by lower average assets under management, the UK/Hong Kong-listed banking giant said in quarterly figures today. In its North America segment, the private bank reported a profit of $23 million, down from $32 million a year ago but up sharply from $7 million in the previous quarter.
The private bank reported net outflows $500 million, “primarily the result of a small number of large withdrawals in Switzerland, partly offset by net new money inflows in Asia.”
Wealth management income for the first three months of 2012 held in line with the strong first quarter of a year ago and “up on the run rate seen in the second half of 2011”, UK-listed Standard Chartered said, while giving few other details. The bank, which earns the bulk of its revenues outside the UK, said in an interim statement that across the whole business, it had a “strong start to the year, with high single digit income growth over the comparative period of 2011”.
Royal Bank of Scotland
The wealth division of Royal Bank of Scotland, which includes Coutts, the private bank, reported an operating profit before impairment losses of £55 million (around $89 million) in the first three months of this year, down from £86 million in the previous three months and £75 million a year ago. The parent firm, which is partly owned by the UK taxpayer, suffered a first-quarter loss. Part of the dent to the first-quarter profit was caused by an £8.75 million fine imposed on Coutts by the Financial Services Authority in connection with failings connected to anti-money laundering procedures.
The private banking arm of the French bank reported net income in the first quarter of 2012 of €36 million ($47.3 million), down from €43 million in the first three months of last year, while total assets under management rose slightly. At €200 million, the business line’s revenues fell by 10.7 per cent (or down -9.1 per cent in absolute terms) from a year ago. Operating expenses at the private bank were €148 million, down 6.9 per cent year-on-year, benefitting from the operating adjustments implemented in the second half of 2011. Total assets under management at the private bank rose slightly at the end of the quarter to €85.4 billion, compared with €84.7 billion at the end of December last year.
Pre-tax income at the investment solutions arm, which includes wealth management, was €483 million ($634 million) in the first three months of this year, a 9.3 per cent year-on-year decline. Total revenues were €1.521 billion, unchanged from the same quarter in 2011, it said. Gross operating income was €478 million, a 0.2 per cent fall.
“This quarter, the net asset inflows of Investment Solutions totalled €12.6 billion euros. All the business units made a positive contribution: asset management (+€7.8 billion) thanks to strong asset inflows into money market funds from institutional investors; Private Banking (+€2.7 billion), especially in the domestic markets and in Asia; Insurance (+€1.1 billion) thanks to good asset inflows in France, Luxembourg and Asia; Personal Investors (+€0.4 billion) and Real Estate Services (+€0.4 billion),” it said.
Assets under management at the private banking arm rose 2.3 per cent in the first quarter of 2012 from the previous three months, driven by a 3.4 per cent rise in assets under management by LCL Banque Privée, as inflows of interest-bearing deposits offset outflows of securities. Internationally, aided by a favourable currency impact, assets under management moved up 2.2 per cent in the first quarter of 2012 even though business was adversely affected by instability in the eurozone and customer mistrust of European banks.
Net revenues at the private clients and asset management arm at Germany’s biggest bank fell to €3.4 billion (around $4.49 billion) in the first three months of this year compared with €4.1 billion a year before. The figures were “positively impacted” by €263 million related to Deutsche’s stake in Hua Xia Bank for which equity method accounting was applied for the first time. The remaining decrease was mainly attributable to lower operating revenues in Postbank driven by the impact of de-risking activities and also reflecting a low interest rate environment, as well as lower releases of loan loss allowances recorded prior to consolidation.
The private customers segment at Germany’s Commerzbank posted an operating profit of €112 million ($145.2 million) for the first quarter of the year, in line with last year’s level of €116 million.
The bank’s net income in the first quarter of 2012 was $5.4 billion, down from $5.6 billion in the same three months of 2011, while private banking revenue slipped slightly. JP Morgan said revenue from private banking was $1.3 billion, down 3 per cent from the prior year but gave few other details.
Bank of America
Net income at Bank of America’s global wealth and investment management business rose by around $5 million year-over-year to $547 million for the first quarter 2012, while net income across the bank tumbled by over a third. At the wealth business, net income was also up significantly on a consecutive basis from $259 million in the final quarter of last year. Total revenue at the GWIM unit decreased 3 per cent compared to the prior-year quarter, falling from $4.5 billion to $4.4 billion, as lower transactional activity took its toll.
The bank reported a 3 per cent rise in assets under management at its Personal Financial Services division, the firm’s wealth management unit, in the three months to 31 March. The Chicago-based firm managed $179.1 billion for private individuals at the end of the first quarter, up from $173.7 billion at the end of 2011. Since 31 March 2011, when the firm had $168.4 billion in PFS client assets, the firm has boosted wealth management AuM by 6 per cent.
The Bank of New York Mellon reported 2012 first quarter income applicable to common shareholders of $619 million, down from $625 million a year earlier. Total fee and other revenue held steady on a year-over-year basis at BNY Mellon at $2.8 billion. Investment management and performance fees comprised $745 million of these revenues, down from $764 million a year earlier, driven by higher money market fee waivers, partially offset by net new business. Assets under management, excluding securities lending assets, were $1.3 trillion at 31 March 2012, up 6 per cent from the prior year and 4 per cent sequentially.
Earnings at the investment management division were $1.11 billion for the first quarter, down 6 per cent from a year earlier. Net revenues at the division fell 8 per cent on a year-over-year basis to $1.18 billion. Lower management and other fees, as well as lower transaction revenues, dragged revenues down relative to the first quarter 2011. Over the quarter, the firm saw assets under management net outflows of $26 billion, predominantly in money market assets ($18 billion of outflows) but also in equity and alternative investments. On the other hand, net market appreciation of $22 billion saw AuM fall by only $4 billion, to $824 billion.
Southeast Asia’s biggest lender posted a 16 per cent rise in net profit to a record S$933 million ($751 million) in the three months to March 2012 from a year ago, bolstered by customer lending. Net interest margins increased four basis points to 1.77 per cent from higher loan yields. Loans rose 3 per cent (excluding currency translation effects) to S$198 billion, with Singapore-dollar loans leading the increase.
The Australia-based banking group saw its net profit after tax drop 24 per cent in the full year to 31 March 2012 from the year-earlier period due to low client activity and global market uncertainty. Net earnings for the period was recorded at A$730 million, although this was partially offset by a 39 per cent rise in earnings to A$425 million in the second half compared to the preceding six months
Daily News Analysis
Published: May 08, 2012
By Tom Burroughes - Group Editor
Northern Trust has named Daniel Lindley to the newly-created London-based role of managing director, global family and private investment offices group for the EMEA and APAC regions.
He takes on the post on 1 July this year; he currently serves as president of The Northern Trust Company of Delaware, a limited purpose trust company in Wilmington, Del, a position he has held since 2005, the firm said in a statement.
In his new role, Lindley will manage the expansion of Northern Trust’s business with family and private investment offices in Europe, the Middle East and the Asia-Pacific region, and will have operational oversight of the group’s activities in London and Guernsey. Lindley will also continue in his role as chief fiduciary officer for Northern Trust’s Guernsey trust company, Northern Trust Fiduciary Services (Guernsey).
Lindley will report to Jeffery Kauffman, chief executive, global family and private investment offices. He will work with Caroline Devlin, director of international solutions on business strategy and expansion. Charlotte Denton, managing director, London, and Lesley Hodgson, managing director, Guernsey, will report to Lindley.
“Northern Trust is well positioned to grow its family and private investment office services in Europe, the Middle East and the Asia Pacific Region given our outstanding capabilities in asset servicing and fiduciary management,” Kauffman said.
Prior to joining Northern Trust in 2005, Lindley was managing director and trust counsel at US Trust Company of Delaware. He was also responsible for the national development of US Trust’s Delaware trust business.
Lindley spent 25 years in private law practice in Delaware, beginning his career in 1975 with Potter Anderson & Corroon and later as a partner in the Delaware offices of Duane Morris and Reed Smith.
Daily News Analysis
Published: April 26, 2012
By Eliane Chavagnon - Reporter
City National Bank has agreed to buy Rochdale Investment Management, creating an $18 billion firm called City National Rochdale Investment Management and boosting its assets under management to over $60 billion.
Rochdale, a $4.8 billion New York investment firm which serves affluent and high net worth clients, will merge with City National Asset Management to form City National Rochdale, offering an array of equity, fixed income and non-traditional investment alternatives, the firm said.
City National Rochdale will be a wholly-owned subsidiary of City National and will operate separately as a registered investment advisor within the bank’s wealth management group.
The new unit will be led by Rochdale’s current chief executive, Garrett D’Alessandro. He will report to Richard Gershen, executive vice president of City National’s wealth management group.
City National’s chief investment officer, Bruce Simon, will also report to D’Alessandro, additionally serving as CIO of the new unit.
City National serves ultra high net worth clients primarily through Convergent Wealth Advisors. Serving the firm’s HNW and affluent investors are City National Rochdale and the company’s five majority-owned affiliates.
The acquisition is expected to close by the end of the second quarter of this year but remains subject to customary consents, including the consent of Rochdale clients, the firm said.
Published: April 25, 2012
By Harriet Davies - Editor - Family Wealth Report
Ultra high net worth individuals are still in wealth preservation mode, according to the latest Spectrem Group quarterly survey, with more than half saying it is more important to protect principal than grow their investments.
However, willingness to take risk rises among those in the highest wealth segment, with around 53 per cent of respondents in the $15-$25 million segment saying they are willing to take “significant” risk in a portion of their portfolios to achieve a higher return, according to the Investment Attitudes & Behaviors survey.
The sample group
Breaking down the UHNW sample group, which was made up of 482 respondents with a net worth between $5 million and $25 million not including primary residence, shows that nearly two-thirds are retired and around one-quarter are still working, with the remainder being “semi-retired”.
Retirement does not appear to be a worry for this segment, with 90 per cent predicting they will be able to live comfortably through retirement.
Senior corporate executives accounted for 18 per cent of the sample group, followed by entrepreneurs (15 per cent), and professionals such as accountants, doctors and lawyers (13 per cent).
It appears that the wealthy are less dependant on advisors than a year ago, with around 16 per cent of individuals ranking themselves as “advisor dependent” (where an investment professional makes nearly all investment decisions), down from 23 per cent last year, the survey found.
While the self-directed segment has remained constant at around 27 per cent, more people now identify themselves in the “advisor-assisted” group, as well as “event-driven”, where they make their own investment decisions but use an advisor for specialized services such as retirement planning and asset allocation or alternatives advice.
Furthermore, 60 per cent of the sample group said they enjoy investing and do not want to give it up, and 58 per cent like to be “actively involved” in the day-to-day management of their portfolios.
Drawing a conclusion from this, Spectrem Group says the UHNW “are likely to enjoy discussing investment strategies with their advisors,” and that advisors should therefore provide well-informed and holistic strategies for discussion.
According to the survey, the young are less concerned about taxes than their older counterparts, with only 73 per cent of the younger respondents (44 and under) saying tax implications are a selection factor in their investments compared to over 80 per cent for all other age groups.
A similar story applies to the level of risk associated with investments, with 76 per cent of younger respondents citing this as a selection factor for investments, compared to over 90 per cent for all other age groups.
Conversely, younger investors are more likely to consider social responsibility as a factor, with 57 per cent of the youngest age group citing the social responsibility of an investment as a selection factor.
“Socially responsible investing will increase dramatically within this segment,” says Spectrem.
Where did the wealth come from?
Nearly all UHNW respondents to Spectrem’s survey identified hard work as the secret to their financial success, with a full 96 per cent citing this as a factor behind wealth creation. Education also featured highly, cited by 91 per cent, as did smart investing (87 per cent), frugality (75 per cent), and “being in the right place at the right time” (68 per cent). Taking risk was also a factor, as 61 per cent of the wealthy sample group thought this was a factor behind their success.
On the other hand, family connections and inheritance were only cited by 13 per cent and 32 per cent of respondents respectively, indicating that wealthy people tend to feel they have earned their status, rather than had it “given” to them. When responses were broken down by age, younger people were more likely to cite family and inheritance as reasons behind their wealth.
Concerns of the UHNW
Political concerns have risen over the past year, according to the report, with 80 per cent of ultra-wealthy individuals saying they are worried about the political environment, compared to 73 per cent the year before. The national debt was a concern for 82 per cent, up from 81 per cent a year earlier.
The upcoming general election is a worry to around three-quarters of wealthy individuals, according to Spectrem’s survey, while the proportion of wealthy people worrying about tax rises appears to have decreased – from 73 per cent a year ago to 65 per cent today.
Anxieties about inflation also seem to be waning slightly among the rich, with 60 per cent saying this is a concern in the latest survey compared to 65 per cent a year earlier.
But worries about wealth remain…
On the other hand, it seems that even as worries over tax rises and inflation have dipped slightly, concerns about maintaining wealth over generations have not diminished. In fact, two-thirds of survey respondents said the financial situation of their children and grandchildren was a source of worry to them.
“Maintaining their current financial position is one personal concern that has dramatically increased from 2011,” says Spectrem in its report.
The reason for this may be linked to costs associated with education and healthcare, for example, as survey respondents appeared to be more worried than a year ago about issues such as personal health and financing education for descendants. Spectrem also noted that almost half of the UHNW in the survey were financing the education of their grandchildren.
Published: April 24, 2012
By Tom Burroughes - Group Editor in London
Invesco, the Atlanta-based asset management firm, wants to sell its $18 billion wealth management business, Atlantic Trust Private Wealth Management, Reuters reported, citing a number of named and unnamed sources.
The Atlantic Trust business has $18 billion of assets under management. It is not a core business for Invesco, one of the sources is quoted by the news service as saying.
Invesco did not respond to this publication’s request for comment at the time of going to press. Reuters said Invesco declined to comment.
Atlantic Trust has 11 offices across the US and serves clients with at least $5 million in assets. With its nationwide presence and strong brand name, it could be an attractive acquisition, said Jim Campbell, director at Riotto-Jones & Company, a family office consulting firm. He was also one of the sources of the story.
Atlantic Trust was the most well-known brand among 35 private wealth management firms, according to the 2011 Luxury Brand Institute Survey of high net worth individuals.
Wealth management firm will be acquired by private equity firm for substantial premium over current stock pric
Published: April 16, 2012
The Edelman Financial Group Inc. is going private.
The nationwide wealth management firm, founded by financial planning industry icon Ric Edelman, announced today that it will be acquired by the private equity firm of Lee Equity Partners LLC.
Lee will pay $8.85 per share in cash, a premium of 43% over Edelman Financial’s (TEFG) Friday closing price of $6.18. That puts the deal price at around $257 million.
Mr. Edelman and George Ball, co-chief executives of the company, will continue in their roles after completion of the transaction and maintain a significant equity investment in Edelman Financial, the company said in a statement.
The Edelman Financial Group manages about $17 billion in client assets through 43 offices in the U.S.
Last year, Mr. Edelman — one of the biggest names in the financial planning industry — announced that he was exiting the independent-contractor brokerage business, saying the channel faces steep hurdles that limit profitability.
“Everyone will draw their own conclusions, but I consider the independent-broker-dealer channel severely flawed and question the sustainability of many of the players in the space,” Mr. Edelman said in an interview in October. “The economics are very challenging in today’s environment.”
Mr. Edelman added that he was exiting the independent broker-dealer space — a move that affected about 15 practices with roughly 75 reps across his firm — to focus on the wealth management business. Mr. Edelman is the largest shareholder of his firm.
(InvestmentNews will offer more details about the sale of Edelman Financial on InvestmentNews.com and today’s Daily email alert.)
Published: April 12, 2012
By Danielle Sottosanti April 12, 2012
Bonuses across the industry were moderately to significantly lower in 2011 than the previous year, according to FundFire poll respondents.
Nearly 43%, or 144 respondents, report receiving 2011 bonuses that were lower than what they received for 2010 results. That was the dominant response to a FundFire poll published Wednesday.
That plurality group includes 26%, or 87 respondents, who said their bonus was “significantly” lower, as well as 17%, or 57 respondents, who saw their bonuses drop “moderately.”
Meanwhile, 31%, or 103 respondents, received fatter bonuses. Around 24%, or 81 respondents, saw “moderate” increases, while just 7%, or 22 respondents, report “significantly” higher bonuses.
Additionally, 26%, or 88 respondents, say their bonuses for 2011 were the same as for 2010.
Those responses were largely in line with what experts are seeing in the industry.
Performance bonuses in the wealth management industry were slightly lower for sales management, middle management and even senior management professionals, according to Allan Starkie, partner at executive recruitment firm Knightsbridge Advisors. Bonuses were not adversely affected for those in asset-generating, client acquisition positions.
Joe Preston, principal at the recruitment firm Preston & Co., also observes that employees in client-facing positions tended to receive the largest bonuses, because they are the ones mostly driving revenue. However, for the most part, bonuses were a “mixed bag,” dependent on the firm and its revenue, he notes.
Some employees perceived a disconnect between their firms’ revenue and the bonuses they received.
At least in the wealth management space, most firms “had a fairly good year in terms of earnings and profitability, and so the expectation among most senior employees was for a slightly higher bonus pool,” Starkie says. Consequently, the lower bonuses fell short of some employees’ expectations, resulting in “general malaise and disappointment that was quite palpable,” he says.
The lower bonuses are a result of firms still playing catch-up from the severe cuts they made during and after the financial crisis. They are now investing a great deal of resources in re-growing their businesses, partially at the expense of the bonus pool, Starkie explains. As part of that rebuilding effort, firms noticeably increased their number of key hires in the third quarter of 2011, he says.
As of 3 p.m. Wednesday, 335 FundFire subscribers had participated in the poll, which is an unscientific sampling of the publication’s subscribers. Readers could vote only once, on a voluntary basis.
Published: April 12, 2012
By Harriet Davies - Editor - Family Wealth Report
BMO Financial Group has signed a definitive agreement to acquire CTC Consulting, an SEC-registered investment advisor with $24 billion in assets under advisement, which it will combine with its US ultra high net worth wealth management business, Harris myCFO.
With the deal, BMO is expanding its geographic footprint on both the East and West coasts, the Canadian firm said in a statement. CTC, which was founded in 1981 as Capital Trust Company, is headquartered in Portland, OR and also has main offices in Boston, MA and Darien, CT.
CTC became majority owned by its employees after a management buyout in 2008 from Bank of America.
Terms of the deal with BMO weren’t disclosed, but it is expected to be finalized in the second quarter of 2012.
“CTC Consulting’s executive committee members will continue to have key leadership positions in the combined firm and clients will continue to work with the same professionals,” BMO said in a statememt.
According to CTC Consulting’s website, its executive committee is made up of: Garbis Mechigan, chairman and chief executive, managing partner; Kristi Hanson, president and director of research, managing partner; Karen Harding, senior consultant and director of consulting, managing partner; Michael Finan, senior consultant, managing partner; Curt Fintel, chief investment strategist, managing partner; and Robert Gray, chief operating officer, managing partner.
“CTC Consulting’s strong client focus aligns perfectly with BMO and complements our existing ultra high net worth investment offering by strengthening our manager research and advisory capabilities, especially in the area of alternative investments,” said Gilles Ouellette, president and chief executive, private client group, BMO Financial Group.
BMO had not responded to a request for further information at the time of publication.
Published: April 02, 2012
Posted by Marianne Nardone on 4/02/12 • Categorized as Regional Firm Focus
HPM Partners has nabbed a four-person team of managing directors from Deutsche Bank Private Wealth Management’s Orange County, Calif. office.
The foursome has joined as partners with HPM’s Costa Mesa, Calif. office. Douglas McCrea and Craig Wells, former senior relationship managers at DB, and Stephen Nielander and Gerald Larr, former investment advisors, have taken their posts at the newly-launched hub.
The team reports to Kurt Miscinski, president of HPM Partners who is based in Chicago. Miscinski also hails from DB PWM, where he was a managing director before joining HPM and an executive committee member. Miscinski told PWF that he is excited about the launch of HPM’s new Southern California office, as well as the firm’s growth plans. “I’m reuniting with many of my former colleagues from Deutsche Bank and I’m excited about our prospects for growing our business out West,” Miscinski said.
Calls to Deutsche Bank’s press office and to Tom Bowers with Deutsche Bank PWM in New York were not returned by press time.
Private Wealth Focus last wrote about HPM bringing on a Legg Mason team to its Chicago office (see PWF, 4/1/10). The Costa Mesa and Newport Beach region have been on a steady growth spurt for wealth management firms, as the area’s wealthy have thrived and continue to seek services closer to home (PWF, 12/7/09).
Daily News Analysis
Published: April 02, 2012
By Eliane Chavagnon
Wells Fargo has opened its new Abbot Downing business - a move involving the merge of two of its wealth management units under a new brand.
Abbot Downing serves ultra high net worth individuals and families with at least $50 million in investable assets, and is an integration of Wells Fargo Family Wealth and Lowry Hill. The unit is led by James Steiner, who was appointed as president last year.
In February, the firm appointed Lisa Featherngill as managing director of planning of the division, based in Winston-Salem, NC, reporting to head of wealth planning, Anthony McEahern.
Since details of the merger were announced in November, the combined business has grown by approximately 20 per cent to $32.9 billion in client assets under management, according to Reuters. More specifically, the group has reportedly added five billionaires and 13 individuals with $100 million or more in investable assets.
Steiner told the publication that people are leaving more money to foundations and endowments. He also said cash from the sale of company stakes in initial public offerings, mergers and acquisitions have been the “biggest drivers” of wealth creation.
Abbot Downing has four divisions, including an asset management division, a private banking channel, a combined trust and fiduciary service, and a group which addresses family psychology and governance.
Daily News Analysis
Published: March 28, 2012
By Harriet Davies - Editor - Family Wealth Report
The “enhanced” family office model will come to dominate the ultra-high-net-worth wealth management landscape, as the very wealthy remain shaken by the effects of the financial crisis, according to a new white paper from Optima Group.
“In the aftermath [of the crisis], a ‘new normal’ has taken hold. For the ultra affluent, it is characterized by heightened concerns over capital preservation, risk management and the responsibilities of wealth stewardship,” says the white paper. “And trust, transparency, clarity and fiduciary responsibility have become, now more than ever, the paramount drivers in choosing financial advisory relationships.”
In this environment, providers who fail to shift their business practices to accommodate market sentiment will lose market share, and “quality multi-family offices” stand to benefit in the near-to-intermediate term, says Optima.
“It is worth noting that formidable global entities such as HSBC, UBS, Citi and others, are also rapidly creating or expanding ‘family office service groups’ which market investment banking and other services to existing family offices,” the white paper says.
“This increased willingness by industry giants to participate in the growth of MFOs, even where these providers do not control the ‘end relationship,’ is further recognition of the growing popularity and potential of the family office market,” it continues.
The size of the market
Optima characterizes households with at least $30 million in investable assets as UHNW, and notes the small size of this market, accounting for fewer than 60,000 households in the US. At the $50 million threshold, it says there are some 10,000 households in the market.
“This makes for an intensely competitive marketplace where market differentiation and client satisfaction are critically important to continued viability,” says Optima.
Among some of the things the UHNW are demanding are:
1) True open architecture: encompassing an “end to any conflicts of interest in product selection or sales” and proprietary products competing only on a level playing field.
2) Real transparency: relating to both products and pricing, as well as full disclosure over investments.
3) Simple and practical solutions: clients want solutions they understand, rather than “black box” products; higher cost products in particular must be justified.
4) Effective risk management: ultra-wealthy clients want to understand their investment strategies and the risk management processes in place, which must account even for “black swan” events.
Daily News Analysis
Published: March 26, 2012
By Tom Burroughes - Group Editor
UBS has changed leadership roles within its Wealth Management Americas unit, Bloomberg reported, citing a memo it has seen from Americas chief executive Robert McCann.
Bob Mulholland, who was head of the wealth management advisor group, was named head of wealth management and investment solutions, according to the memo. Jason Chandler, who ran the unit’s ultra high net worth division, reports to Mulholland as head of the wealth management advisor group.
John Brown, who led wealth management solutions, reports to Mulholland as head of the middle-markets business. He will also report to Brian Hull, who assumes the new title of head of strategic clients and partnerships, as leader of the team responsible for Wealth Management Americas’ partnerships with the equities and fixed income division of UBS’s investment bank.
UBS did not reply to this publication’s requests for confirmation of the moves at the time of going to press.
Mike Schweitzer, who led Wealth Management Americas’ western division, is leaving the firm. Paula Polito, who was chief marketing officer, is becoming chief strategy officer, continuing to lead marketing with added responsibility for the unit’s emerging affluent segment and retirement services business.
Dan Cochran is becoming chief operating officer for Wealth Management Americas. He had been chief administration officer.
Published: March 13, 2012
J.P. Morgan has announced the launch of the J.P. Morgan Family Office Solutions Team in Europe, Middle East and Africa (EMEA). The newly formed group will focus on single family offices with a net worth of over $500 million across the EMEA region.
“Given the increasing complexities and sophistication of single family offices, we have established a dedicated team who will focus on offering to this segment a range of customized services including tailored investment strategies, wealth planning, advice on family governance, philanthropic initiatives, and succession planning throughout the family office life cycle,” said Samy Dwek, who leads the J.P. Morgan Family Office Solutions team.
The J.P. Morgan Family Office Solutions team will provide single family offices access to an ongoing stream of investment themes and ideas, the team will also provide family offices a number of exclusive events that allow them to expand their networks and engage in conversations with influential leaders and experts from around the globe.
Pablo Garnica, head of J.P. Morgan Private Bank EMEA added, “Whether it is identifying and executing a unique investment idea, a niche M&A transaction or a credit strategy that solves multiple concerns, we believe that our unique combination of heritage, tailor-made solutions and excellence will enable us to deliver a first-class service to the wide-ranging needs family offices require every day.”
Guest Column: Current Trends Relating to Accelerated Acquisition of Assets through both Organic and Non-Organic Means
The following White Paper is authored by Allan R. Starkie, Ph.D., Partner at Knightsbridge Advisors, Inc.
Published: March 02, 2012
Posted by Marianne Nardone on 3/06/12 • Categorized as Research / White Papers
Since the crash of 2008 and the market’s somewhat tentative return to health, the Wealth Management industry has been obsessed with recruiting client-facing professionals with portable assets, and sales professionals with proven track-records of consistently high production numbers. This should come as no surprise. In a fee-based model any major contraction of AUM leads to a direct reduction of top line revenues. Cost cutting, which has been a prevalent trend, primarily by reducing middle management and sales management, can only do so much to ameliorate a crushing blow to the top line. This is particularly true in our world of open architecture in which such a large portion of fees are used to remunerate outside managers. And so the illusive panacea that we are often tasked to find is a quick transfusion of assets, to stabilize our asset-anemic clients.
2. Current Trends
a. Individual Producers
Over the last four years 64% of our searches have targeted two types of revenue generating professionals: the rarest of creatures, the million dollar revenue producers who remain the unicorns of wealth management, and relationship managers with a strong sales component to their responsibilities. Perhaps one of the repercussions of our present SMA world is that fewer institutions are utilizing a pure hunter sales force. This is quite understandable. In the ancient world of a decade ago, a sales professional could focus on selling the purported superior performance of his firms’ proprietary products. Now as sales professionals “sit on the same side of the table as their clients,” as the current euphemism extols, the sale is considerably more subtle. It generally is a sale of superior service, a more holistic approach, and a bond of trust in the culture and values of the institution. Snake oil is clearly not on the menu, and many institutions are scornful of traditional hunter approaches and scoff at the use of such pedestrian words as “sales” and “production”. And so the unicorn is slowly becoming extinct.
Twelve years ago five percent of the national sales force managed to produce one million in new annual asset management revenues. Today the number is under one percent, based on a survey we conducted last quarter. There are only a handful of firms that even employ a pure sales force that hands-off the relationship upon closing. Although there still is great value in utilizing hunters, even within a primarily private banking model in which a relationship manager will become the client service professional after closing, we find a number of regional banks eliminating their external sales forces entirely. Pure hunters are found primarily among the trust companies and asset management companies, but almost never among international money centers, wirehouses, or most RIA’s. So the unicorn is no longer regarded uniformly as the asset generating solution of choice that the industry is longing to acquire. Several firms use a hunter model very effectively and I do not wish to imply that it is obsolete or ineffectual, simply that the number of top producers has dwindled, the patience of the industry to allow an adequate ramp-up time for production has dissipated, and there are essentially almost no viable training programs which are needed to develop a future generation of top producers.
So in a world in which so few hunters provide exemplary production; particularly in their first two years with a new firm, there has been a growing trend to recruit relationship managers with sound production records and the hope of some degree of portability. This can be very dangerous for two reasons. The first reason is that many relationship managers with impressive production numbers rely extensively on intra-bank referrals from other lines of business, the most obvious being commercial lending. One can dissect their production numbers and try to isolate what has been hunted externally, but it is a difficult thing to validate, and even externally sourced business is often a result of a strong bond between the referring center of influence and the wealth management firm itself. The second danger involves moving relationship managers from a banking environment to one in which credit is not a major component of the firms offering (particularly balance sheet lending). Even if one isolates the asset management portion of the book from the credit and deposit business, and then tries to make a calculation on the asset portability, the analysis will probably be faulty. Clients are still very hesitant to move assets from a bank with which they have an existing credit relationship, even if the assets are not securing a line of credit. One needs to identify clients in the book of business that essentially have a pure asset management relationship with the relationship manager and are not tied to the bank by other products. Once this small group has been identified a reasonable portability expectation would be no more than 20% in the first year. Even wirehouses have experienced enormous drops in portability (some estimates place the figure at 55% down from 85% in 2007).
b. Team Lift-Outs
The next turn the industry has taken, a bit like a mouse running frantically through a maze and turning at each blank wall, has been an increased move toward team lift-outs. This can be a viable option if caution is exercised, because the term “Team Lift-Out” is rather vague, and can mean anything from a newly hired producer bringing a sales assistant, to lifting-out the entire team of specialists that surrounds a group of clients. Although one occasionally encounters teams that are actively seeking to move together, more often a team lift-out needs to be created, almost in the manner of recruiting an intelligence operative within a foreign government entity. In the cases in which an intact team is marketing itself one can assume that the hiring firm will be actively competing with a number of other institutions that the team has approached. As a result the cost will typically be considerably higher than constructing a team lift-out in a clandestine manner. The other advantage in the clandestine approach is it generally allows the acquiring firm the element of surprise which always increases portability, as opposed to the team that is selling itself; for regardless of the precautions they may undertake to insure secrecy, it is virtually impossible for their employer not to get suspicious and begin developing a contingency plan to retain their clients.
The first step in executing the clandestine approach is to identify institutions in which a “hard-wired” client team is the prevalent model. That is to say that a relationship manager has an actual team (typically in the hub and spoke configuration), in which the same specialists surround each client relationship. The key players need to be the portfolio manager, trust administrator, and lead relationship manager. We always encourage the hiring institution to also bring any support personnel that actually engage in frequent interaction with the client. Typically the best way to construct a lift-out is to approach one of the senior members of the team as if you were recruiting him individually, and the hiring institution should sincerely be willing to hire this professional even without his team following immediately. During the initial interview process, after a sense of trust has been established, the question of a team lift-out should be broached. It is essential that the recruiting firm examine any non-solicitation agreements undertaken by the employee you wish to use as the clandestine operative. If he is prohibited from soliciting employees, it is then essential that the recruiting firm contact each team member individually and create the lift-out in a manner in which the members are not perceived as soliciting each other. If no non-solicitation agreement exists it naturally is an easier process, in which the lead employee can act as the negotiator and spokesperson for the team.
The other ingredient in a successful lift-out is orchestrating the method and timing of the mass resignations, and having complete clarity on any restrictions regarding soliciting clients. Since restrictions usually apply (outside of firms that have joined the Protocol) it is important that bonuses used to enrich the team for portable assets be created on a success basis, and never as upfront sign-on bonuses.
c. Acquisitions of RIA’s
The more surprising trend that we are currently experiencing is not only a heightened interest in team lift-outs, but a virtual stampede to acquire RIA’s in an effort to immediately increase assets. Within the last twelve months we have experienced slightly more requests on the M&A side than on the lift-out front, from a host of firms from regional banks, to other RIA’s. It is an interesting phenomenon when you consider that a recent report from Schwab Advisory Services chronicled that in 2011 only 57 RIA’s were sold in the entire country, representing a sale of only $44 billion in AUM (yielding an average deal size of only $798 million). Of those only 10% were purchased by regional banks, while 44% were purchased by other RIA’s.
There are a number of reasons why the demand far outstretches the supply. The first reason is that RIA owners often have unrealistic expectations of the value of their company. In my local veterinary office there is a print of a cat looking in a mirror and the face of a lion is reflected back. Unfortunately, many RIA owners have a magnified sense of their own uniqueness and value that makes agreeing on a normal valuation difficult, and sometimes contentious in an overly personal way. In addition to this, since the RIA segment has also suffered from top line and bottom line compression, the basis for any valuation will almost always be lower than it was prior to 2008. One RIA owner whom we were trying to sell to a private equity firm last year reluctantly agreed to an 8 times EBITDA valuation- but insisted that the 2007 EBITDA be used against this multiple. The perplexed private equity principal responded that it would be quite similar to posting a photo of himself on Match.com from twenty years ago. But these anecdotes illustrate the simple fact that despite a huge demand for RIA’s, the valuation discussions will negate many potential deals.
Another problem, is although RIA’s are typically hungry for cash to either fund growth or provide some liquidity for the owners, and succession issues, they often are not willing to rejoin the same corporate banking environment against which they rebelled in the first place, and ultimately escaped to form a more nimble and versatile culture, albeit often in their own image.
So the question arises, is RIA acquisition a viable solution to quick asset growth? I think under the right conditions the answer can be yes. Let me define what I believe to be some of the right conditions as well as some common pitfalls.
Before I provide specific guidelines I would like to make the blanket warning to avoid trying to roll-up a series of disparate RIA’s under the illusion that through economy of scale one will cut overhead costs drastically and create a more efficient organization. As Tolstoy said “Happy families are all alike; every unhappy family is unhappy in its own way.” One should then focus on acquiring only those firms that will fit well within the culture of your family, and do so in a manner that will benefit the key staff of the acquired RIA as well as your firm’s strategic goals. Here are some guidelines:
• A wanton roll-up strategy with a poorly defined, pathetically hopeful IPO exit strategy for the most part is doomed. One unhappy family is unfortunate; a harem of unhappy families is a tragedy. As for economy of scale, I have seen very little cost savings devolve from roll-up strategies, with the exception of the new Dodd-Frank compliance costs that might severely affect smaller RIA’s bottom lines. Therefore, a strategic, well thought-out set of reasons should be clearly defined, in which collating assets, and consolidating overhead costs are not the primary goals, but the favorable outcome of a comprehensive set of selection criteria.
• Never pay the entire purchase price at closing. Tie the principals into a minimum of a three-year earn-out with very specific parameters around asset growth, retention, and earnings.
• Sign strict, long-term management contracts with the key staff to ensure that an exodus of talent and then clients does not follow after the last earn-out check clears.
• Develop a structure in which the acquiring company can act as a long-term financing vehicle to provide current owners with liquidity and future partners with cash to buy equity and a means of borrowing against the equity if needed.
• Provide a clearly defined succession plan.
• Offer minimal integration of operations with the exception of: finance/accounting; human resources/payroll; and compliance.
• Depending on the sophistication of the RIA’s back office as it relates to manager selection and consolidated reporting, these functions might also be centralized by the acquiring firm, but that decision needs to clearly be integrated into the strategic plan prior to closing.
• Freeze earn-out metrics at closing.
We believe that in this environment all three solutions referenced above should be investigated in parallel. Individual hires with real production records, and client-facing professionals with verifiable portability should be sought, as well as back-end structured team lift-outs, and strategic acquisitions.
In the current environment we project that 2012 will reflect higher deal flow of RIA acquisitions by other RIA’s; particularly with MFO’s as the acquirer. We would expect that the large appetite for team lift-outs will continue with an increase in wirehouse to wirehouse movement, as the retention bonuses used during the meltdown of 2008 begin to amortize. Finally, we project an increase in portability of assets as the credit environment becomes slightly less conservative.
Published: February 07, 2012
By Eliane Chavagnon
UBS Wealth Management Americas has added two teams and two individual advisors to its Birmingham, Dallas, New York and Raleigh offices - the firm’s third raft of hires so far this year.
The Eubanks Lappin group, led by Steve Eubanks and Michael Lappin, has joined UBS’s Raleigh, NC branch. Eubanks and Lappin bring to the firm a production of approximately $4 million and assets under management of $750 million. The team will report to executive director and complex director Karl Ruppert.
The Trudeau group joins the Birmingham, MI office, led by brothers Stephen Trudeau, senior vice president, and David Trudeau, associate vice president. The team joins from Bank of America Merrill Lynch and will report to branch manager Tod Winkler.
Meanwhile, David Shorr has joined UBS’s New York office, bringing to the firm a production of approximately $2.8 million and AuM of around $355 million. Shorr, who latterly worked at Morgan Stanley Smith Barney, starts as a senior vice president, reporting to Mara Glassel, managing director.
The remaining appointment is that of Steve Owen, who joins the Dallas, TX office as senior vice president. Owen previously worked at Bernstein and in his new role at UBS will report to director and branch manager Michael Wesbrooks.
Last month, UBS hired eight groups, as well as a string of individual financial advisors, bolstering nine of its offices nationwide, in its second round of hires in January. Combined, the groups brought an aggregate production of $3.8 million and AuM of more than $600 million.
Daily News Analysis
Published: January 30, 2012
By Max Skjönsberg
C Hoare & Co, the venerable London-based private bank, has closed down portfolio management for its US clients, citing stricter regulation.
The private bank will continue to offer services other than investment management to its clients in the US, but the bank’s chief executive, Alexander Hoare, suggested that it might come to an end “if they (the US regulators) continue to go down that path.”
Hoare, a member of the original family, told FamilyWealthReport that the firm’s US client base is “negligible.” “It is not a problem for the bank, it is a problem for the customers,” he said.
“The SEC (the Securities and Exchange Commission) and the IRS (the Inland Revenue Service) have made it more difficult for some time to service American clients in London,” a member of the bank’s investment team told this publication.
“Most of our funds are not eligible for US investors; we do not invest in individual securities,” the investment professional said.
C Hoare & Co, which is one of the oldest private banks in the UK, is the latest in a string of companies that have had to turn down US business as a result of a crackdown on offshore tax evasion. HSBC, UBS and Julius Baer are some of the European players that have stopped providing offshore banking to US clients.
Newly-passed legislation in the US, called FATCA, seeks to stamp out tax evasion by US citizens. One of its practical effects is to raise the compliance burden on what are called Foreign Financial Institutions that do business with expat US nationals and Green Card holders, or which invest in US financial assets. The legislation in some ways builds on the compliance requirements of the Qualified Intermediaries regime. A number of firms, such as Societe Generale, the French bank, have told this publication that FATCA will significantly increase the costs of serving US citizens.
Some firms, however, such as RBC Wealth Management, part of Royal Bank of Canada, and London & Capital, a wealth manager, have sought to market their services to US expats in recent years.
Published: January 26, 2012
By Harriet Davies - 26 January 2012
There were 57 merger and acquisition deals involving registered investment advisors last year, down from 70 deals in 2010, with activity focused among smaller firms, the latest data from Schwab Advisor Services shows.
Last year, the deals represented $44 billion in total assets under management, while the average deal size fell to its lowest value since 2005, at $798 million. This compares to total deals representing $63 billion in AuM in 2010, and an average deal size of $895 million.
“Market volatility and economic uncertainty led to a decline in M&A activity in the second half of the year,” said Nick Georgis, vice president of Schwab Advisor Services.
Since Schwab began tracking M&A deals in the registered investment advisor market in 2004, average deal size peaked in 2009 at $1.7 billion. Meanwhile, combined assets under management represented by all deals peaked in 2007, at $90.7 billion.
Of the 57 deals in 2011, Schwab found that 58 per cent represented under $500 million in AuM, 33 per cent represented between $500 million and $2 billion, and 9 per cent over $2 billion.
RIAs were the acquiring firm in 44 per cent of cases, but there was also increased buying activity from banks. Regional banks were the acquiring firm in 10 per cent of cases, compared to just 4 per cent a year earlier, while national banks represented the buyer in 2 per cent of deals.
“RIAs remain the dominant buyer category, but we observed a measurable increase in the number of transactions completed by banks,” said Georgis.
Published: January 04, 2012
By Eliane Chavagnon
San Francisco-based First Republic Bank appointed Garrett Sokoloff from UBS as a managing director for the New York office. At UBS, Sokoloff was also based in New York and worked as a managing director and co-head of conduit origination in the real estate finance group.
UBS Wealth Management added two financial advisory groups to its Americas team. The Findley/Wise Group joined the Toledo, Ohio office, bringing to the firm production of $6.3 million and assets under management of around $800 million. The second group moved to the Rochester office in New York, which brings approximately $375 million in assets under management to the unit.
Aegis Capital, the New York investment management firm, hired Peter Hirsh as managing director for investments as part of a drive to further grow its wealth management offering. Hirsh joined from Janney Montgomery Scott where he served as a financial consultant.
Northern Trust appointed Suzanne Shier as tax strategist for its personal financial services division. In her new role, Shier contributes to the discussion of issues surrounding federal tax - with a focus on charitable giving, trust law and tax legislation.
Los Angeles-based Wedbush Bank appointed Steven Madrigal as a vice president and senior private banker within its sales team. Based in the LA office, Madrigal’s main responsibilities are to develop and manage a portfolio of private banking clients throughout the Southland, as well as the firm’s partner offices.
John Hancock Financial Services, the Boston-based unit of Canadian asset manager Manulife Financial Corporation, named John Vrysen as president of its annuities business. Vrysen served as head of strategic initiatives for the company since 2008. He has held a number of positions during his 34-year career with Manulife and John Hancock so far.
Northern Credit Union, the Canadian financial services firm, added Les Dunbar as an investment advisor for its Northern wealth management team. Dunbar brings over 20 years of industry experience to the role and previously served as an investment advisor at RBC Dominion Securities.
Reliance Financial Corporation, the Atlanta-based financial services and wealth management firm, added Richard Curcio and Ward Curtis to its board of directors. Curcio was chairman and president of Integrity Investments and Integrity Management and Research, which he founded in 1992.
First Republic Bank named Luke Peterson as a managing director for the Boston office. Peterson was previously with Wells Fargo Bank where he served as vice president and branch manager in Boston. At First Republic he serves as a single point of contact to a team of professionals providing banking, investment management, trust, brokerage and real estate lending services.
The Bulfinch Group, a New England-based wealth management firm, added Amy Lampert to its team of affiliated advisors. Lampert is the founder of Womensworth, an investment education and consulting group that promotes financial literacy among women and young people. Before becoming affiliated with Bulfinch, she was an independent investment advisor and has also worked at UBS, Mellon Bank and HSBC.
Barclays Wealth appointed five investment representatives to its New York office, bringing its total hires in the Americas to 50 last year. Jack Broderick and Bill Belleville, who both joined from Credit Suisse Private Banking, are now managing directors at the UK-headquartered bank’s wealth arm. Broderick worked at Credit Suisse for 15 years, most recently as a relationship manager in private banking. Michael Gordon, Scott Madison and Jonathan Sopher also joined as directors.
Ladenburg Thalmann Financial Services made a flurry of appointments, including that of Adam Malamed as its chief operating officer. The rest of the appointments were for executive-level spots at its broker-dealer, Ladenburg Thalmann & Co. As part of the reorganization, David Rosenberg and Peter Blum were appointed co-presidents and chief executives of Ladenburg Thalmann & Co, and Steven Kaplan was named head of capital markets. Mark Zeitchick, who previously served as president and chief executive at Ladenburg Thalmann & Co, continues to serve as executive vice president at Ladenburg and as a member of the firm’s board of directors, positions he has held since 1999.
Private Bank of California appointed Jesse Martin as vice president client services manager. Martin joined the bank’s Century City headquarters, focusing on cash management, product upgrades and operations. He now reports to Marlon Osorto, who is senior vice president director of operations.
The Milwaukee, WI-based investment bank Robert W Baird nabbed two brokerage teams, hiring a total of six people overseeing some $343 million in assets. The teams were Dallas-based Grant Halliday Group, led by advisors Neil Grant and Luke Halliday from Morgan Stanley Smith Barney, and a Fort Worth-based group led by advisors George Gamez and Jim Hazel from Wells Fargo Advisors. They joined by registered client relationship associates Charu Dayal, from MSSB, and Michell Barber, from Wells Fargo Advisors.
Tompkins Financial Advisors, the wealth management arm of New York-based Tompkins Financial Corporation, appointed Laurie Haelen as managing director for the Western New York division. Haelen has over 20 years of wealth and portfolio management experience and most recently served as senior vice president and director of investment services at the firm. In her new role she is based in the Pittsford regional office and oversees a team of wealth advisors, financial planners and trust officers.
San Francisco-based First Republic Bank hired Gayle Nickel as a managing director and preferred banking team leader in Silicon Valley. Nickel is now responsible for preferred banking deposit initiatives in the Silicon Valley area. Prior to this post, she worked for Silicon Valley Bank for 18 years, most recently as head of client advisory services in the venture capital and corporate finance group. She is now based at the bank’s Menlo Park office.
Barclays Wealth hired Joseph Danowsky as managing director and head of solutions for the Americas. Danowsky joined the company from JP Morgan Securities, where he worked in a similar role for the past three years. Before that, he spent over two decades at Bear Stearns in various positions including senior managing director for the advisory services and wealth management division.
Washington Wealth Management created a northeastern presence with the launch of an office in Connecticut, and the addition of a wealth advisory team from Morgan Stanley Smith Barney. Joining Washington was Pacilio Wealth Management, which is led by 25-year financial services veteran Thomas Pacilio. Under the terms of the partnership, Pacilio now assumes a dual role as president and managing director of Pacilio Wealth and as director of Washington’s Westport, Connecticut office. He was joined by Daniel Besse, vice president and managing director of Pacilio Wealth, and Brian Fink, vice president.
Wealth management software and services provider Envestnet completed its acquisition of FundQuest, BNP Paribas’ US provider of fee-based managed services, in a $24.4 million cash deal for all outstanding shares, according to its 8-K filings with the SEC. Along with the completion, FundQuest’s chief investment officer moved to Envestnet to take over the role of chief investment strategist.
Bank of America appointed John Bottega as chief data officer, who is now responsible for the strategy, policy and governance of the bank’s data management. He reports to Marc Gordon, enterprise chief information officer, and is based in New York.
TDECU Wealth Advisors, the Texas-based financial advisory firm, added Robyn Cochran to its growing wealth management team. Cochran was previously an assistant vice president, senior financial advisor at Merrill Lynch and has served in various executive and senior-level roles in the financial services industry over the past 20 years. The firm also announced plans to appoint 10 to 15 more financial advisors in Houston, Brazoria County and Victoria over the next 12 months, as it embarks on an expansion strategy in the US.
State Street Global Advisors nabbed Mellon Capital Management’s chief investment officer for a senior emerging markets investment role. The investment management firm, part of New York-listed State Street, appointed Michael Ho as chief investment officer for its active emerging markets equities and global macro capabilities. Based in Boston, Ho manages the active emerging markets team and leads the development of global macro strategies. He reports to Alistair Lowe, global chief investment officer for active equities.
Bank of the West, the US-based subsidiary of BNP Paribas, hired Brian Katz as a senior vice president to lead a newly-created banking and sales strategy team under its wealth management group. Katz joined the company after serving as a senior marketing executive at a number of firms including Aegon, UBS and MetLife.
Park Sterling Bank appointed David Parker as president of its eastern North Carolina operations. Parker brings 30 years of financial services experience, most of which were spent at Wachovia Corporation, where he most recently served as eastern region executive, based in Wilmington.
Creekside Financial Advisors, the Cleveland-based financial planner, appointed Susan Svenson as client manager. Svenson previously worked for Cedar Brook Financial Partners and Fairport Asset Management. She brings over 20 years of financial services experience to assisting Creekside’s advisors development plans.
Neuberger Berman, the New York asset management firm, named Eli Salzmann as manager of the Neuberger Berman Partners Fund and Neuberger Berman AMT Partners Portfolio. Salzmann joined the company in January last year as managing director and portfolio manager specializing in US large-cap vFirst Republic Bank, the San Francisco wealth manager and private bank, appointed Mary Hayes as portfolio manager and managing director for its private wealth management unit. Hayes was previously a senior vice president and senior portfolio manager at US Trust in New York. Before that, she worked for Scudder Zurich Private Investment Counsel and The Bank of New York. In this new role, she offers equity and fixed income investment management solutions to high net worth individuals and families, foundations and endowments.
Gold Bullion International, the precious metals provider to individual investors and wealth managers, named Andy Provencher as head of business development. Provencher joined GBI after serving as head of third-party distribution and a member of the operating committee for Neuberger Berman, where he oversaw the creation and growth of the firm’s separately managed account business.
WeiserMazars, the New York accounting firm, named Bridget Day as partner in its financial services group. Day most recently served as a partner in the financial services firm EisnerAmper, where she led the banking practice. She also spent 14 years at PricewaterhouseCoopers where she focused on the risk and quality SEC services group for two years. In her new position, she is based in the firm’s Edison, NJ office where she is expected to bolster the company’s banking operations.
First Western Trust Bank appointed Andrew Ewing as senior vice president and portfolio manager for its Los Angeles office. Ewing brings almost 40 years of investment management and private client advisory experience to the role. He joined the wealth planning team in October last year after serving for five years as a director in private banking for Credit Suisse in Los Angeles.
Baring Asset Management added Matthew Whitbread as an investment manager to its US head office in Boston. Whitbread is now part of the company’s global multi-asset team and reports to Hayes Miller, head of multi-asset for North America. He joined from Fundquest, also based in Boston, where he was a portfolio manager.
Florida-based Chilton Trust Management lured fixed income veteran Timothy Horan away from Morgan Stanley Smith Barney, along with a team of four fixed income investment professionals from MSSB and Moody’s Investor Services. Horan was a managing director and chief investment officer at MSSB Fixed Income Investment Advisors and joined the New York-based Chilton Private Clients affiliate on 3 January this year.
UBS Wealth Management Americas hired Barry Mitchell as senior vice president for investments. Mitchell joined from Merrill Lynch where he was first vice president, investments. At Merrill he had $290 million in assets under management and had a T12 of $1.9 million. At UBS, he reports to Dan Shepler, branch manager of the Park Avenue office in New York.
Bessemer Trust, the US-based multifamily office, appointed Lance Bylow as a principal. Bylow reports to Eric Gies, who is the northeast region head of business development. Based in the firm’s New York office, he is responsible for introducing ultra high net worth families to Bessemer’s global investment and wealth management services.
Foundation Source, the US-based provider of support services for private foundations, appointed two former Wachovia senior executives and philanthropy specialists to its management lineup. Carol Yonack and Tony Rodriguez joined as regional managing directors to the national business development team, reporting to H King McGlaughon, chief executive of Foundation Source.
Washington Trust Wealth Management nabbed Drew Bottaro from Wells Fargo Family Wealth as a vice president and senior financial counselor at its Wellesley, MA-based Weston Financial division. Bottaro was latterly a director of client services and senior vice president at Wells Fargo Family Wealth and was at predecessor businesses Calibre/Wachovia before that.
The Private Bank of California appointed Meredith Esarey as a vice president relationship manager, based at the firm’s Century City headquarters. Esarey joined from EastWest Bank, also in Century City, where she worked in business development. Before that, she was a relationship manager at BB&T in Virginia for six years.
BNY Mellon Wealth Management appointed Ron Bruder as a managing director, to assist the firm’s investment team advising ultra high net worth families and family offices. Bruder was most recently a director and vice president at Goldman Sachs, where he managed main floor operations of designated primary market-makers on the Chicago board options exchange.
Anglo-American law firm Mishcon de Reya appointed family law partner Michael Stutman to its New York office, joining from Mayerson Stutman Abramowitz, a family practice he founded in 1998.
Baring Asset Management appointed Michael Siciliano as head of North American sales. Siciliano reports to George Harvey, head of sales, business development and client service. He joined Baring from Merganser Capital Management in Boston, where he was director of sales.
Scotiabank, the Canadian financial services group with a strong wealth management footprint, added Susan Segal to its board of directors, as well as its audit and conduct review committees. Segal has 30 years of experience in global finance markets and investment banking, primarily in emerging economies and especially in Latin America.
Glenmede, the Philadelphia-headquartered investment and wealth management firm, named Jon Stanley as a senior portfolio manager. Stanley brings more than two decades of investment management experience to Glenmede and most recently served as a managing director at US Trust Company.
Edward Forst, global co-head of Goldman Sachs’ investment management division, retired from the firm at the end of last year. Forst was a veteran of the investment banking giant, having originally joined Goldman Sachs at its capital markets division in 1994. He went on to become co-head of that business and also served as chief of staff to both the equities and fixed income clearing corporation divisions and co-head of the global credit business.
The former management team of HSBC Capital Management completed its investment advisory arrangements with HSBC and formed an independent private investment firm called Graycliff Partners. The New York-headquartered investment firm focuses on private equity, mezzanine and real estate investment in middle-market companies in the US and Latin America. It manages around $1 billion in commitments from existing funds as well as look to manage new generations of funds.
California-based Fremont Bank appointed Jordis Moore as a senior trust officer. Moore had most recently served as a trust administrator at Wells Fargo Bank in Long Beach. She is a licensed attorney and previously worked in the estate planning and probate industry. In her new role she has taken over the general trust administration for Fremont’s wealth management and trust accounts as well as having joined the bank’s key fiduciary committees.
Richardson GMP, the Canadian wealth management firm, appointed Luc Papineau as director for wealth management and branch manager. Papineau was most recently a vice president for Eastern Canada at Dundee Securities. In his new role he works closely with Jean-Pierre Janson, managing director for national wealth management.
Wedbush Securities, the US-based investment firm, appointed Thomas Wyman as managing director of its private shares group unit. Wyman latterly worked for a variety of technology-focused hedge funds in the San Francisco Bay Area and was previously an internet research analyst at JP Morgan, where he began his career. In his new role, he is based at Wedbush’s San Francisco office, reporting to Cyrus Pirasteh, head of equity trading, technologies and operations.
Robert McCann took over the role of chief executive of UBS Group Americas, amid a number of top-level management changes worldwide at the Swiss bank. McCann, who joined UBS in 2009 to head up the firm’s wealth management arm in the Americas, assumed his new role in addition to his current one.
Mariner Wealth Advisors, the Kansas-based wealth management firm, hired Brian O’Regan to lead its nationwide growth efforts. O’Regan joined from Fidelity Investments and brings over two decades of industry experience to his new role. His hiring was the latest in a series of initiatives to expand the wealth management network of Mariner, which began early last year with the takeover of CBIZ Wealth Management’s advisory unit.
Lenox Wealth Management, the Cincinnati-based wealth manager, appointed Jay Hummel as president. Hummel was previously the chief financial officer at the firm and in his new role assumes the day-to-day responsibilities for the management of Lenox Wealth. Prior to Lenox, Hummel worked for Deloitte & Touche and Ward Financial Group. John Lame, the company’s founder, remains as chairman and chief executive.
Enterprise Bank & Trust, a subsidiary of Nasdaq-listed Enterprise Financial Services, appointed Ann McCartney as a senior vice president of private banking in its North Scottsdale, AZ office. McCartney was latterly a principal of a commercial mortgage company, which was sold to GMAC in 1999.
– Acquisition to Expand LPL Financial Presence and Offerings in RIA and High-Net-Worth Market –
Published: January 03, 2012
– Fortigent to Retain Brand, Focus, and Management Team –
BOSTON and ROCKVILLE, Md., Jan. 3, 2012 /PRNewswire/ — LPL Financial LLC (”LPL Financial”), a leading custodian and the nation’s largest independent broker-dealer*, today announced the intent of its parent company to acquire Fortigent, LLC (”Fortigent”), a leading provider of high-net-worth solutions and consulting services to RIAs, banks, and trust companies. LPL Financial is a wholly owned subsidiary of LPL Investment Holdings Inc. (NASDAQ: LPLA).
Upon completion of this transaction, Fortigent will remain solely focused on supporting sophisticated practices and those serving high-net-worth clients. Fortigent will retain its brand, its existing management team and its Rockville, MD, headquarters. Andrew Putterman will continue to lead Fortigent, reporting directly to Robert Moore, chief financial officer of LPL Financial.
“We are delighted to bring together two organizations that share similar cultures, including a legacy of independence and a commitment to offering advisors the most robust, open-architecture platform for serving their clients’ needs,” said Mr. Moore. “Building upon our growing success with RIAs and high-net-worth advisors, this acquisition will combine LPL Financial’s scale and experience in helping advisors manage the complexity and growth of their practices with Fortigent’s robust platform of research, reporting and alternative investment solutions for RIAs and ultra high-net-worth advisors while creating an unmatched offering in the marketplace.”
“Fortigent has taken a bold step for its future. This acquisition will create new possibilities for speeding up the evolution of the Fortigent platform and expanding the ways in which we can fuel advisors’ success in our distinct market space,” said Mr. Putterman. “Fortigent will remain focused on serving the unique needs of successful high-net-worth advisors, and LPL Financial’s resources, scale, and expertise will provide Fortigent with an even stronger foundation to support the kind of innovation and enhanced client service that will empower our advisors to meet and exceed client expectations at the highest level.”
The transaction is expected to close in the first quarter of 2012, subject to customary closing conditions. Financial terms of the transaction were not disclosed.
For this transaction, Silver Lane Advisors LLC served as financial advisor to Fortigent, with Patton Boggs LLP as legal advisor to the company.
Optima Group, Inc., served as financial advisor to LPL Financial, with Skadden, Arps, Slate, Meagher & Flom LLP serving as legal advisor for this transaction to the company.
About LPL Financial
LPL Financial, a wholly owned subsidiary of LPL Investment Holdings Inc. (NASDAQ: LPLA), is the nation’s largest independent broker-dealer (based on total revenues, Financial Planning magazine, June 1996-2011), a top RIA custodian, and a leading independent consultant to retirement plans. LPL Financial offers proprietary technology, comprehensive clearing and compliance services, practice management programs and training, and independent research to approximately 12,800 financial advisors and approximately 730 financial institutions nationwide. In addition, LPL Financial supports over 4,000 financial advisors licensed with insurance companies by providing customized clearing, advisory platforms, and technology solutions. LPL Financial and its affiliates have approximately 2,700 employees with headquarters in Boston, Charlotte, and San Diego. For more information, visit www.lpl.com.
Securities offered through LPL Financial, Member FINRA/SIPC.
Fortigent, LLC, delivers a fully integrated and customizable business-to-business outsourced wealth management solution to banks, trust companies, and independent advisory firms. Services include an “open architecture” investment platform with particular expertise in alternative investments, a flexible unified managed account program, and consolidated wealth reporting. Fortigent’s web-based portal interface allows access to proposal and rebalancing tools, client portfolio reporting and accounting, as well as industry articles, research papers, and other practice management and business development resources. For more information
NEW YORK (Dow Jones)–UBS Wealth Management Americas, a unit of UBS AG (UBS), named Frank Minerva chief operating officer of its ultra-high-net worth business as the firm continues to reshuffle leadership in its U.S. brokerage.
Minerva, a 21-year UBS veteran, previously oversaw the New York office of UBS’ Private Wealth Management. He replaces Douglas Black, who will pursue new opportunities within Wealth Management Americas, a company spokesman confirmed.
Minvera reports to Jason Chandler, who heads the private wealth business, which caters to investors with $10 million or more in invested assets.
Chandler was named head of the unit a month ago as UBS reorganized the U.S. retail brokerage into two divisions from three regions.
In other personnel moves, Chandler removed Jay Messing, head of private wealth sales, and Phillip Hsu, head of business development. Both are looking for new roles within the wealth management unit. It’s not clear who will succeed them. The UBS spokesman declined to comment on the two executives.
UBS has made several management changes since Robert McCann took over as head of Wealth Management Americas in October. McCann announced a Renewal Team in November to help him develop a plan to return the firm to profitability. The UBS unit had $11.6 billion in asset outflows in the fourth quarter and has been hurt by both financial adviser departures and a dispute with U.S. tax authorities.
Reuters reported the UBS personnel changes earlier Thursday.
Published: January 28, 2010 - 5:20 pm(AP) - Bank of New York Mellon Corp. is in talks with PNC Financial Services Group Inc. to buy one of PNC’s business units for close to $2.5 billion, The Wall Street Journal reported, citing people familiar with the matter.
Pittsburgh-based PNC Financial has been looking to sell its unit, PNC Global Investment Servicing, for about three months, the Journal reported. The unit, based in Wilmington, Del., provides back-office processing for financial advisers, fund managers and brokers.
The sale could help the bank pay back $7.6 billion in bailout funds it received from the government during the financial crisis. PNC Chief Executive James Rohr has made repayment a goal for 2010.
A deal with Bank of New York Mellon could be announced as soon as next week, the Journal reported.
Spokesmen for PNC Financial and Bank of New York Mellon declined to comment, with both companies saying “we do not comment on rumors and speculation.”
Shares of PNC Financial rose 2.1% in after-hours trading Thursday after closing the regular session at $54.14, down 22 cents.
Shares of Bank of New York Mellon closed down 50 cents, or 1.7%, at $29.17
But motivations are suspect, and desperation may be driving some deals, bankers say
The drought in mergers and acquisitions of independent-wealth-management firms and investment advisers appears to be ending, but few investment bankers expect a quick return to the pre-recession days when cash-dominated payments at high valuation multiples were common.
In the first three quarters of the year, 32 mergers or acquisitions of registered investment advisers were announced, matching last year’s average pace of 11 deals per quarter but well behind that of 2007, when a total of 67 were completed, according to “Real Deals 2009,” a forthcoming study from Pershing Advisor Solutions LLC and FA Insight.
The study likely missed some smaller transactions, including acquisitions of breakaway broker teams and buybacks from consolidators, because it focused on firms with at least $100 million in revenue or $1 billion in assets under management, said Dan Inveen, a principal at FA Insight.
The Charles Schwab Corp. had tracked 50 M&A deals year-to-date through the end of September, down from 88 in all of 2008, according to a published report. Representatives of Schwab did not return several calls for comment.
“Buyers and sellers woke up around the end of July” as markets rebounded from their March lows, said James Tennies, president of InCap Group Inc. The investment-banking boutique’s first two deals of the year are at the term sheet stage. “Sellers who felt things were wildly underpriced may be accepting a new reality that their firms are worth 70% of what they were in 2007, while buyers are starting to believe that the March numbers weren’t a reality.”
But the biggest driver of recent deals has been fear, with activity dominated by revenue-challenged RIAs combining to cut expenses, according to several bankers. They called it a disturbing trend in which firms are combining without taking into account crucial factors such as compatible cultures and complementary advisory strengths.
“Never have I seen so many bad decisions,” said Elizabeth Nesvold, managing partner of investment bank Silver Lane Advisors. “People are feeling stretched by their infrastructure, but there are so many other nuances that have to be addressed to make mergers work.”
Ms. Nesvold said she has seen many shotgun marriages in the fund-of-funds and multistrategy hedge fund areas in order to build critical mass.
“I worry the same thing is starting to spill over to the wealth management space,” she said.
Paul Lally, president of investment-banking boutique Gladstone Associates, agrees.
“We are seeing a lot of Las Vegas weddings where they get together on Friday night, think they’re in love, get married on Sunday and will likely be heading to divorce by the following weekend,” he said. “They feel they can’t continue with the status quo, but the ability to match culture and synergy doesn’t happen overnight.”
The Pershing study offers evidence that smaller firms rather than large acquirers are fueling much of the activity. The percentage of deals involving so-called serial buyers that tend to buy larger RIA firms plummeted from 36% last year to about 25% this year, it found. And several of those deals involved RIAs who repurchased their firms from roll-up companies and other consolidators that are starved for capital, said John Temple, a managing director at investment bank Cambridge International Partners.
Some observers expect deal activity to continue growing in 2010 as founders of older RIAs refocus on exit strategies after the crisis of the past 18 months. Opportunistic buyers, meanwhile, are beginning to take advantage of lower valuations and increasingly favorable deal structures. Such deals are weighted to small upfront cash payments and “earn-outs” three to five years after closings that are geared to hitting profit and client retention targets.
“The demographics of founders looking to monetize their firms, the drive for operational scale and new entrants to the market will lead to a measurable and appreciable acceleration of M&A activity in 2010,” said Ronald Fiske, executive vice president of client solutions at Fidelity Investments’ institutional wealth services unit for RIAs.
Few are expecting a tidal wave of deals, however, because credit for acquirers remains tight, and buyers have become more discerning about the quality of wealth and asset ¬managers.
“Two years ago, if a target had underperformed the market by 5%, it wasn’t an issue, because their clients weren’t leaving,” said Thomas Miller, a managing director of Quist Valuation. “Buyers today want decent performance and strong client retention.”
Valuations remain depressed, he said, estimating that deal prices have contracted about 20% over the past 18 months. Mergers among advisers looking to combine through stock swaps often founder over disagreements about the respective worth of their stocks, Mr. Miller added.
But he and others also said buyers in the United States and abroad remain intrigued by the continuing migration of wealthy individuals to independent advisers. Quist Valuation this year worked with potential buyers in China and Japan that weighed acquiring some large West Coast RIAs, though the deals weren’t consummated, Mr. Miller said.
“It’s not all doom and gloom,” Ms. Nesvold said. “There are some strong buyers who understand the temporary imbalance in valuation. It may not go back to the rip-roaring ’90s and mid-2000s, but there is a hot pipeline.”
Beleaguered chief executive Ken Lewis to leave after tumultuous tenure. Bank under fire for its merger with Merrill Lynch last year.By Tami Luhby, CNNMoney.com senior writer
Last Updated: September 30, 2009: 6:53 PM ET
NEW YORK (CNNMoney.com) — Ken Lewis, the beleaguered CEO of Bank of America, announced Wednesday that he will retire at year’s end.
–Andrew BloomenthalSeptember 18, 2009
Lenox Advisors, a New York-based asset manager has launched a program that aims to teach fiscal responsibility to the children of wealthy families in an attempt to keep money in the family longer. The goal is to instill values at an early age, to prevent children from squandering their fortunes once they reach their majority, according to managing director Bob Hartnett, who says prudent budgeting can and should be taught to kids as young as five years old. “Professional athletes and movie stars have extremely high levels of bankruptcies, because they’re never taught how to manage money,” Hartnett explains, adding that fiscal educational programs by the NBA and NFL are ineffective because adults are usually too set in their ways to learn new tricks.
–Andrew BloomenthalSeptember 17, 2009
As wealthy families transfer power to the next generation of leadership, many are letting go of in-house staff in a move to cut costs, and are instead turning to outside professionals for ancillary services like accounting, taxes, philanthropy, mission statements, and governance, according to a recent study commissioned by Rothstein Kass and conducted by Russ Alan Prince and Hannah Shaw Grove. Family offices are also migrating from the single family office model to the multi-family office structure, in order to consolidate knowledge and expenditures.
–Kristen OliveriSeptember 15, 2009
The Family Wealth Alliance is readying Alliance University, the first-ever accreditation program for family office relationship managers, and has picked its initial curriculum, faculty and tuition. Tom Livergood, ceo, told PAM the three-day training program is set to be held in Chicago at the University of Chicago’s Gleacher Center Oct. 26-28, and an additional program will run Nov. 10-12.
September 14, 2009As family offices struggle to make it through the recession, with many trying to cut costs and reduce staff, some are setting up advisory committees instead of hiring specialists to address issues such as family governance, investments and philanthropy. These committees are comprised mostly of family members and outside professionals, such as advisors from private banks, attorneys, accountants or independent investment management consultants who help the family make decisions on what to do with their wealth for free. By creating such committees, families can keep the costs down, and advisors can benefit from references families make to their networks.
Angelo Robles, founder of Family Office Association, noted that SFOs in particular have been weighing their options carefully about whether to keep services in-house or to outsource them, but are more focused on creating these specialty committees to be sounding boards for their families. The concept has gained traction this past year with the families’ younger generations as they can equate a family committee to a similar board of directors at any given firm, he said.
Bob Casey, senior managing director of Family Wealth Alliance, said that he is also seeing the trend as a move toward more formal governance structures. “Many SFOs are struggling and are not economically viable, and expenses are such that they’re having difficulty,” said Casey. To combat this, many are setting up these structures to make sure the family office works properly and multi-generational family members work together to find a solution.
MFOs have started getting in on the act, noted Paul Karger, managing partner for Boston-based MFO Twin Focus Capital Partners. “Such committees can aide not only in educating the family on matters at hand, but also gather a collective voice in the overall decision-making process,” said Karger. “Given the dynamics of varying family members, and based on level of interest, we generally encourage each individual family member to use one’s natural skills in indentifying their own desired role within the family committee.”
Twin Focus works with traditional advisors such as attorneys, accountants, investment management consultants as well as specialists in arenas like hedge funds and private equity to staff committees. “We’ll also work with consultants in areas such as philanthropy that may help not only to work with the family to identify charitable endeavors, but also possibly help with the due diligence process involved around grants and gifting,” Karger added. –K.O.
September 11, 2009RWE Private Wealth, a recently-launched Orlando multi-family office, has rolled out Law Firm Advisory Services, a sub-division designed to garner investment clients among personal injury lawsuit winners. The firm will network with personal injury law firms to gain referrals to accident victims who have won large settlements, in order to put their cash into long-term investments. The firm will relax its $5 million investment minimum for this initiative, which has already yielded a $3 million client.
This program is predicated on the fact that recipients often squander their cash. Also, many plaintiffs who receive structured settlements designed to provide lifetime income streams, are vulnerable to offers of instant lump sum payouts, at huge discounts to their settlement.
“These aren’t business owners; they’re people who came across the money because of a catastrophic injury, and, unfortunately, they usually don’t come to the table with strong fiscal education,” explains RWE principal Seth Ellis. The firm will set up clients with a palate of investments, including annuities and fixed-income investments, and will park their excess funds in trust accounts with Raymond James as trustee.
The inspiration for this program unfolded over a conversation between Ellis and his old college friend John Morgan, a partner at Orlando personal injury law firm Morgan & Morgan, which RWE has aligned with for this initiative. Morgan says he’ll get no kickback from this arrangement, but thinks it’s a worthy cause, especially following the recent Wall Street crisis. “After AIG, I became particularly concerned that a client could get structured money from an insurance provider that would go defunct. I’m suspect of everything now,” Morgan notes. “And those folks on TV who say they’ll buy your settlements outright, but for a huge discount? They’re loan sharks. Their behavior would embarrass Tony Soprano.”
For lawyers, the upside is delivering additional post-trial service to the client and building up a relationship that may cause the client to put in a good word with friends or acquaintances. Ellis says he’ll charge the same 1% management fee he charges typical family office clients. Once the program is fully up and running, Ellis says he’ll approach other law firms in an attempt to set up similar arrangements. –Andrew Bloomenthal
Massey, Quick & Co., a Morristown, N.J.-based wealth manager with roughly $1.5 billion in assets under management, is looking to acquire firms with $100-300 million in assets under management and opportunistically pursue team lift-outs. “Many of the smaller firms have realized that their growth is probably capped and they can do a better job for their clients and not have to worry about the business side,” Stewart Massey, founding partner and cio, told PAM. The buying spree comes as the firm sees opportunity to expand nationwide. The firm will be funding the acquisitions internally.
The firm is particularly focused on independent cultures similar to multi-family offices, as they would fit best with Massey’s model, said Massey, adding that larger firms would also be considered. Massey, Quick, which formed from the Massey and Quick family office in 2004, services clients with an average account size of $15 million. The firm has brought on four executives this year, including Jack Kemp, former president and ceo of Morgan Stanley Asset Management Distributors, as partner to run the Vero Beach, Fla., office (PAM Daily, 5/8).
Massey, Quick is also planning to roll out its inaugural print advertising campaign to get the word out to potential new business. It recently launched a new Web site to attract clients and has brought on Bob Ward as a dedicated marketing specialist (PAM Daily, 5/8). The print campaign, for which the firm hired an outside consultant, is set to debut sometime in the fall in regional and national print publications. “Up until now, our firm has just been word of mouth and we’ve made the decision to get out there more aggressively,” said Massey. The theme of the campaign and budget has not yet been determined.On Investing
The firm is allocating the largest part of clients’ portfolios to long-short equity and is looking into credit via distressed debt and long/short preferred stock. Massey declined to provide specifics regarding allocation, as each portfolio varies greatly. The firm uses only outside managers across all asset classes. “We tend to use ‘old pilots’ or managers that have demonstrated the ability to add value over multiple market cycles,” said Massey. Additionally, the firm is looking for managers with strong risk management procedures, a business continuity plan and state-of-the art technology. The firm insists on independent pricing of clients’ portfolios by a third-party custodian or administrator.
Fixed income is at the core of many portfolios and when it comes to hedge funds, the firm will not employ managers that use leverage or managers that have their own broker-dealer, said Massey. He also noted that even though the firm started out by catering to ultra-high-net-worth clients and families, it also consults foundations and endowments that came to them via their UHNW clients. Uniquely, the firm still runs the family wealth for all of the firm’s five partners, investing side-by-side with clients.