One hundred firms make up AdvisorOne’s 2012 Top Wealth Managers, as measured by assets under management per client, with data as of 12/31/11.
Here we present a profile of the crème de la crème of the Top Wealth Managers—those 10 firms that topped the list in in our 2012 survey.
View the list of all 280 firms in our 2012 Top Wealth Managers survey.
According to Steve Braverman, managing director and cofounder of Pathstone Family Office LLC, even though Pathstone itself is fairly new—formally announced just 2½ years ago—the principals have worked together, and with some clients, for years longer than that.
Pathstone is “internally multidisciplined to provide fully a integrated family office” and made up of 30 employees who serve 34 client families with an average $100 million balance sheet net worth. (In the Top Wealth Managers survey, as of Dec. 31, 2011, Pathstone reported it had 26 staffers.) Directors head such areas as tax, insurance, financial reporting, philanthropy and accounting, and seek to provide each client family with its own customized family office.
“All families are different,” he says, and despite some commonalities, each family has different critical needs. As a result, the firm classifies itself as a “single-family office for multiple families” and the principals who make up Pathstone regard the firm as a way to best serve “client families we’ve been working with for as long as 10 years, if not longer.”
‘An Accounting Firm Stapled to an RIA’
Partly as a result of the events of 2008, says Braverman, and partly as the “UHNW community has come to better understand the role that institutions, banks and others play in wealth management,” the business has grown substantially.
“We found many families becoming increasingly interested in independent advisors,” he says, “and specifically those who have formulated themselves as family offices.” Pathstone has designed itself around being “internally multidisciplined” so that it can provide a fully integrated family office to its clients.
He explains further: “We’ve made the conscious decision to internally staff the multiple disciplines that those families most appropriate for our service would have chosen, should they wanted to create their own family office.” The firm not only provides a multiplicity of services, it does so in a way to “create economies of scale” and benefit its clients “without diluting the service experience.”
As a result, he says, “We look like an accounting firm stapled to an RIA—going the extra mile to integrate the level of expertise” necessary to oblige clients. “Those families most successful with us,” says Braverman, “are those that recognize that marrying those disciplines together on a permanent basis generally allows for the best decisionmaking, problem solving and forward-thinking advocacy for the types of families we serve.”
Growth and Adaptability
The team that started out at 19 professionals has grown to 30, and has seen its client base grow organically as well. While further growth is planned, Pathstone has only just begun to consider acquisitions.
Being a relatively new firm has its advantages, says Braverman, adding that Pathstone has “enjoyed being a new organization able to more easily adapt and adopt new technology and processes.” Client meetings are conducted on iPads, rather than “handing out multitudes of paper in an environment where the market is volatile.” Technology, as might be expected for such a firm, is a “major factor,” particularly because of its client base. More timely data, managed and manipulated more quickly and efficiently by “taking the best advantage of what the tech world has to offer,” is appreciated by a client base that’s pretty heavy into technology itself.
“So many clients are heavily entrepreneurial in nature,” says Braverman, “that they’re on the move more. As a result, it’s hard to catch them behind a desk, so technology has given the firm the means to deliver information to them wherever and whenever they need it, whenever they have time to access it.”
Because Pathstone incorporates so many aspects of clients’ financial lives into its functions, it doesn’t have to ask questions about what a family might want to do with its money or how it might prefer to handle a business or charitable question. “We are in possession of the answers, rather than the questions,” says Braverman, so if a client wants to make an unplanned major acquisition, the firm can tell him if it’s possible and/or adjust other aspects of his finances so that it can happen.
Ownership From Within
Pathstone is “employee-owned,” with new employees “mentored through a growth process to be future partners.” In addition, there is a protocol in place, Braverman explains, to acquire ownership interests from the founders.
Succession planning is set up with the multigenerational nature of client families in mind. “When a family makes the buying decision to become the client of a multifamily office,” says Braverman, “what they’re really saying is, ‘Here’s all my money forever,’ because what they recognize is that they have attained a level of wealth greater than they will need to consume in their lifetime.” For that reason, he says, the firm has to be prepared to serve the family beyond the current generation and plan for its own longevity.
Along those lines, he says that maintaining the culture of the firm, with client service ideals intact, is a prominent concern. Future leaders of the firm have to be selected to be culturally aligned with the ideals that drive present leaders. To this end, when looking for new candidates, the firm seeks out those who look at the whole picture, whether on the accounting side—with a focus on complex families—or on the advisory side, with a focus on multigenerational financial planning with complex asset allocation.
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