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PAM020909 2/5/09 4:43 PM Page 1 FEBRUARY 9, 2009 VOL. XVI, NO. 3 Making Way For Merrill Wells Names Wachovia’s Kelly To Regional Post Bank of America, US Trust Private Wealth Management is downsizing its 34 hubs across the U.S. by as much as half and reorganizing certain offices in an effort to reduce costs and to make way for the integration of Merrill Lynch offices. It is also in the process of combining its multi-family office with Merrill’s Family Office Services division. As part of the restructuring, some hubs will shut down and others will be rolled into existing hubs in an effort to avoid overlap with Merrill’s Private Banking & Investment Group offices. A spokesman said there will be more announcements in the coming weeks on which offices will officially close and which regional heads will now have expanded coverage. So far, the Baltimore and Washington, D.C. hubs have been eliminated and advisors will BofA, UST REORGANIZES, REDUCES HUBS Wells Fargo has appointed Stan Kelly, former president of Wachovia Wealth Management, as regional president for North and South Carolina following its recent acquisition of Wachovia. See story, page 2 Firms & Services Bessemer Nabs Barclays Exec Merrill Tax Pro Joins N.J. Firm White Paper Favors CRUTs Merrill PBIG Scoops Up $2B Krawcheck To Co-Host Book Launch 2 3 3 4 4 Family Office Safra Family Offices Loses FoF Specialist Tax Pro Jumps To Tag Associates Bessemer Taps Business Development Officer 5 7 7 Research Discontented Wealthy Moved Assets 7 Advisors Underestimating HNW Fears 8 Departments On The Move Wealth Management Happenings Heidi Nedwurth 9 9 12 COPYRIGHT NOTICE: No part of this publication may be copied, photocopied or duplicated in any form or by any means without Institutional Investor’s prior written consent. Copying of this publication is in violation of the Federal Copyright Law (17 USC 101 et seq.). Violators may be subject to criminal penalties as well as liability for substantial monetary damages, including statutory damages up to $100,000 per infringement, costs and attorney’s fees. Copyright 2009 Institutional Investor, Inc. All rights reserved. ISSN# 726-98790 For information regarding subscription rates and electronic licenses, please contact Dan Lalor at (212) 224-3045. (continued on page 11) Finding Bay State Bounty LAW FIRMS GETTING INTO THE HNW ACT Massachusetts law firms have been rolling out family office or wealth advisory divisions. They say they are seizing the opportunity to attract wealthy, multi-generational families, many of whom have been self-managing their assets for generations. These families are now seeking outside managers but are disillusioned with larger banks in the wake of the financial crisis. In Massachusetts, law firms can act as fiduciaries and offer investment advisory services for clients. Boston law firm WilmerHale set up family office unit Silver Bridge Advisors last fall (PAM, 10/6), which operates independently but taps into the law firm’s tax, estate planning and fiduciary services. Wilmington Trust bought Boston law firm Bingham Legg last year as a way to enter the (continued on page 11) FIRMS, FAMILY OFFICES TURN TO WEALTH COUNSELORS Some family offices and firms are tapping into wealth counselors, typically psychologists or therapists with specialized training in the behavioral and emotional issues of wealth, as a way to better interact with and understand their wealthy clients during the turbulent markets. Calibre, Wachovia Wealth Management’s multi-family office, recently hired another wealth counselor. Keith Whittaker, managing director and head of Calibre’s Family Dynamics unit, (continued on page 11) Check www.iiwealthmanagement.com during the week for breaking news and updates. PAM020909 2/5/09 4:43 PM Private Asset Management Page 2 www.iiwealthmanagement.com February 9, 2009 At Press Time Barclays Wealth Exec Joins Bessemer Holly Isdale, former managing director for Barclays Wealth who left the firm last month, has joined Bessemer Trust. Isdale steps into the newly-created role of deputy head of Family Wealth Advisory Services, reporting to William Forsyth, senior fiduciary counsel. New York-based Isdale is responsible for the development of wealth advisory services and family wealth management for the firm’s ultra-high-net-worth clients. She also specializes in legacy planning, according to a spokeswoman. Calls to Isdale were referred to the spokeswoman. A Barclays spokeswoman said there are no replacement plans for Isdale, who joined Lehman Brothers in 2004 and stayed on briefly after the acquisition. Nuveen Jumps Into Alternatives Nuveen Investments is planning to enter the hedge fund space and readying a global endowment model for high-net worth and institutional clients. Nuveen created Nuveen Alternative Investments at the end of last year to bolster its presence in alternative investing, and these will be the first offerings from the firm, headed by Mark Anson, president, and Jamshaud Zovein, managing director. The fund of hedge funds and global endowment model have been designated priorities for Nuveen and both are expected to launch this year, with a target of mid-year, said Zovein. The global endowment model will be based on the investment models of large educational institutions and will be targeted at high-net-worth clients and institutional investors. Former Wachovia President Named To Regional Post Wells Fargo, which recently acquired Wachovia, has named Stan Kelly, former president of Wachovia Wealth Management, regional president for North and South Carolina. Kelly, who has spent 28 years with Wachovia, now reports to Laura Schulte, head of Wells Wachovia’s Eastern Community Banking in Charlotte. Jay Welker, former head of the Wells Fargo Wealth Management Group, was named president of the combined Wealth Management Group in December following the Wells acquisition (PAM, 12/29). Kelly will be based in Charlotte and Winston-Salem, N.C. and lead the retail, small-business and banking operations for Wells Fargo in the region, which includes the Raleigh-Durham area, according to an internal memo. Calls to Kelly were not returned. A spokesman said that Kelly pursued this position after spending most of his early career working in the Carolinas. EDITORIAL PUBLISHING TOM LAMONT Editor MIKE FERGUS Publisher (212) 224-3266 STEVE MURRAY Deputy Editor WENDY CONNETT Executive Editor (212) 224-3979 MARIANNE NARDONE Managing Editor (212) 224-3610 KRISTEN OLIVERI Reporter (212) 224-3934 MELISSA KARSH Associate Reporter (212) 224-3255 STANLEY WILSON Washington Bureau Chief (202) 393-0728 LAURA PAGLIARO Renewals Manager (212) 224-3896 VINCENT YESENOSKY Senior Operations Manager (212) 224-3057 DAVID SILVA Senior Fulfillment Manager (212) 224-3573 SUBSCRIPTIONS/ ELECTRONIC LICENSES One year $2,585 (in Canada add $30 postage, others outside US add $75) KIERON BLACK Sketch Artist DAN LALOR Director of Sales (212) 224-3045 PRODUCTION BRANDON NICKERSON Account Executive (212) 224-3824 DANY PEÑA Director LYNETTE STOCK, DEBORAH ZAKEN Managers MELISSA ENSMINGER, JAMES BAMBARA, DOUGLAS LEE Associates JENNY LO Web Production & Design Director ADVERTISING AND BUSINESS PUBLISHING JONATHAN WRIGHT Publisher (212) 224-3566 ERIK KOLB Editor, Business Publishing (212) 224-3785 PAT BERTUCCI, MAGGIE DIAZ, LANCE KISLING, ADI HALLER Associate Publishers BRIAN GOLDMAN Advertising Production Manager (212) 224-3216 LESLIE NG Advertising Coordinator (212) 224-3212 PAM Reader Survey In The Works! Private Asset Management is looking for your feedback in order to better tailor our publication to fit your needs. Please be on the lookout for the survey to be delivered to you shortly. If you would like more information, please e-mail Managing Editor Marianne Nardone at [email protected]. Thank you for your participation. 2 ARCHANA KAPUR Associate Marketing Manager (212) 224-3421 ©Institutional Investor News 2009. Reproduction requires publisher’s prior permission. REPRINTS DEWEY PALMIERI Reprint & Permission Manager (212) 224-3675 [email protected] CORPORATE GARY MUELLER Chairman & CEO CHRISTOPHER BROWN President STEVE KURTZ Chief Operating Officer ROBERT TONCHUK Director/Central Operations & Fulfillment Customer Service: PO Box 5016, Brentwood, TN 37024-5016. Tel: 1-800-715-9195. Fax: 1-615-377-0525 UK: 44 20 7779 8023 Hong Kong: 852 2842 6910 E-mail: [email protected] Editorial Offices: 225 Park Avenue South, New York, NY 10003. Tel: 1-212-224-3979 Email: [email protected] Private Asset Management is a general circulation biweekly. No statement in this issue is to be construed as a recommendation to buy or sell securities or to provide investment advice. Private Asset Management ©2009 Institutional Investor, Inc. ISSN# 726-98790 Copying prohibited without the permission of the Publisher. PAM020909 2/5/09 February 9, 2009 4:43 PM Page 3 www.iiwealthmanagement.com Firms & Services N.J. Firm Names Merrill Tax Pro COO Pennington, N.J.-based Prestige Wealth Management Group has tapped Thomas McCabe from Merrill Lynch Trust as coo of its wealth management group. McCabe will also take the post of director of accounting for Prestige’s Wealth Accounting Group. Roy Williams, founding partner, said Prestige Thomas McCabe previously employed a part-time accounting professional and is now looking to better integrate wealth management and accounting services. McCabe, who was referred to Prestige through a mutual friend, told PAM he was attracted to the firm’s effort towards taking a proactive approach to tax planning for its clients. “Just looking at the need that clients are going to have considering the volatility in the markets and the new tax laws, they are going to need planners and CPAs more than ever,” he said. At Merrill, McCabe was v.p. and chief Roy Williams administrative officer where he led a fiduciary investment oversight team for the high-net-worth. Prestige Wealth Management, which provides investment management services to HNW individuals, families and corporate executives, oversees more than $400 million in assets. Private Asset Management another vehicle that can be used to house proceeds of an asset sale. “The difference between the two [vehicles] is with the CRAT, the annual annuity stays the same for the term of the trust. With a CRUT the trust gets revalued every year as of the first of the year,” said Bekas, adding that a CRUT is more of a gamble since the annual income level is not fixed and tied to stock prices. Wachovia Trust Exec Heads To Glenmede Frederick Young, regional managing director of the Atlantic region for Wachovia Trust, a unit of Wachovia Wealth Management, has left to join Glenmede Trust. In his new role at Glenmede’s Princeton office, Young will oversee sales and new business, and offer financial planning advice for high-net-worth clients. Calls to Young were referred to a Glenmede spokeswoman who would only confirm his hire. Glenmede launched an ongoing national marketing campaign last fall to tout its strength and stability in the midst of the market downturn (PAM, 12/1). While at Wachovia, Summit, N.J.-based Young oversaw a team of 30 trust advisors in New York, New Jersey and Connecticut. A Wachovia spokesman said there were no plans for replacement. White Paper Says CRUTs Provide New Estate Option Hands-On Philanthropic Endeavour Launches A Charitable Remainder Unitrust (CRUT) is a useful tax vehicle for the high-net-worth to house proceeds from the sale of valuable collectibles, according to the white paper Charitable Remainder Unitrusts: A MustConsider Wealth Maximization Vehicle For Owners Of Hard Assets. Michael Bekas Michael Bekas, author of the white paper and tax partner at accounting firm Marks Paneth & Shron, told PAM the CRUT would house the proceeds from the sale and generate income to be reinvested—and the interest earned would eventually go to a charity. “Using a Charitable Remainder Trust has created a cash flow that I would not have had before,” said Bekas. Bekas said if a portion of the proceeds is then used to purchase a life insurance policy, this can be housed in a Life Insurance Trust with the heirs as beneficiaries. The monies received by the beneficiaries would be free from estate tax, according to the white paper. Bekas said a Charitable Remainder Annuity Trust (CRAT) is Maryann Fernandez, president and cofounder of the Manhattan-based foundation Shaking The Tree, will launch a hands-on philanthropic firm that offers travel and internships for high-net-worth individuals and families. The New York-based firm, called Philanthropy Indaba, will work with family Maryann Fernandez offices and private banks to offer this service to clients to provide a bird’s eye view of charitable giving options. Fernandez told PAM the firm, which will launch by the end of the month, will meet with individual clients to evaluate what type of organizations they want to support, where they’d like to travel to, and the type of experiences they want to have as it relates to philanthropic endeavors. Philanthropy Indaba will then customize a trip for that particular person or family and speak with them afterwards about their experiences and other options for continued giving. Fernandez said that, despite the downturn in the economy and giving, philanthropic-minded clients want more than ever to To receive email alerts or online access, call 800-715-9195. 3 PAM020909 2/5/09 4:43 PM Page 4 Private Asset Management www.iiwealthmanagement.com February 9, 2009 Firms & Services (cont’d) see where their money is going, and how they can make a difference through more than just check-writing. It will market itself through word of mouth, client referrals, and its Web site (www.philanthropyindaba.com). The firm, which took the name “Indaba” from a Zulu word meaning a discussion between people of different tribes, is also organizing service internships that are matched with a monetary donation from the client and geared for the younger generation and retirees. Fernandez is currently crafting an internship where one client will work with an Oscar Award winning director who is shooting a documentary about poverty in Africa. Fernandez plans to donate 10% of the firm’s yearly profits to a new charity each year. She said she continues to work with Shaking The Tree, which uses theater and other mediums to provoke discussions among wealthy families, and is currently working on a script for its next production. Darcy Bhatia, partner with multi-family office Highmount Capital who plans to work with Philanthropy Indaba, said “Maryann’s guidance complements our own work with families and the next generation. It is great for the young adults going through our program, especially those who are experiencing tough times in this job market and need to have a life changing experience,” said Bhatia. Northern Trust Ponders Investment Biz Consolidation Northern Trust Global Investments is considering combining its London-based and U.S.-based manager of managers business, Northern Trust Global Advisors, under one roof. It already plans to consolidate its North American index management business in Chicago and will be moving its passive investment management teams in New York to the Chicago headquarters. “By consolidating quantitative portfolio management in single centers located in Chicago and London, we will be able to meet client needs across North America, EMEA and APAC with focused investment teams that operate efficiently,” according to a client letter. It is so far unclear what impact the moves will have on staffing. The parent firm announced at the end of last year that it plans to axe about 450 employees globally. Northern Trust has about $235 billion in assets under management, of which more than half is already overseen by investment professionals in Chicago. The firm has also combined its active equity strategies under the leadership of John Cole, who was previously the head of active growth equity. He did not return a call by press time. The groups were combined in December, and the move has not resulted in staff cuts yet, though some are expected, a firm official said. 4 Merrill PBIG Nabs $2B Big Apple Team Merrill Lynch’s Private Banking and Investment Group has scooped up the approximately $2 billion team of Eric Bodner and Benjamin Sax from UBS Private Wealth Management in Manhattan. The nine-person team led by Bodner and Sax join Merrill’s PBIG at 2 World Financial Center in N.Y. and report to Riley Etheridge, regional managing director. “We decided to move because we felt that the platform here to execute our business was better, and it is,” Bodner told PAM. Bodner would not comment on compensation. The team specializes in trust and estates, tax consulting, cash flow analysis, concentrated equity, options and restrictions. Merrill’s PBIG handles high-net-worth clients with $10 million or more in investable assets. A UBS spokesman would only confirm the departure. SG Adds To Swiss Hub SG Private Banking has brought on Guillaume Lejoindre, former director for private banking clients at Credit Agricole, as managing director of SG in Switzerland. Zurich-based Lejoindre steps into the new post to accommodate growth and expansion plans for SG’s efforts in Switzerland, which has increased because of new business growth from the firm’s merger with Geneva-based CBG Compagnie Bancaire Geneve. Calls to Lejoindre were referred to a spokesman. SG, the wealth management arm of Societe Generale, has €73 billion in assets under management, and works with international family office clients and wealthy individuals through its global alliance with Rockefeller & Co. Greycourt Hires For Top Tier Wealth management firm Greycourt has named Gregory Friedman, its current cio, as president and appointed Gretchen Shoup as coo. Friedman, who will retain his cio role, steps into the newlycreated post to accommodate the Pittsburgh-based wealth management firm’s growth plans. The firm works with high-networth families throughout the U.S., and has recently launched offices in Charlotte, Houston and Portland, Ore. Shoup, a managing director overseeing operations and client services, steps into the new role of coo, which was being overseen by David Lovejoy as part of his cfo and chief compliance officer positions. The pair report to chairman and founder Greg Curtis. Calls to Friedman and Shoup were referred to a spokeswoman. ©Institutional Investor News 2009. Reproduction requires publisher’s prior permission. PAM020909 2/5/09 4:43 PM Page 5 February 9, 2009 www.iiwealthmanagement.com Krawcheck, Research Firm Host Book Launch Sallie Krawcheck, former ceo of Citigroup Global Wealth Management, and the political research and advisory firm The Eurasia Group, will co-host a gathering for the launch of the book The Fat Tail: The Power of Political Knowledge for Strategic Investing. The event will invite Citi clients and Sallie Krawcheck friends of both Krawcheck and the book’s co-authors, Ian Bremmer and Preston Keat. Krawcheck will introduce the authors, who will discuss how politics and business fuse and how investors should identify and manage political risks. The evening reception, slated for Feb. 24 at The Yale Club, will invite roughly 200 guests, according to a Eurasia spokeswoman. Krawcheck, who left Citi in September reportedly after turning down a client advisory position offered to her by Citi chief executive Vikrim Pandit (PAM, 9/23), could not be reached. Family Office FoF Specialist Leaves Safra Family Office Mark Raskopf has left his role as managing director at Safra Bank’s family office, M. Safra & Co., where he headed up all hedge fund research. An official there declined to comment on replacement plans, if any, and Raskopf did not return a call. Before joining M. Safra in January 2005, Raskopf was a director in the fund of hedge funds business at Bank of America for three years, and before that, a portfolio manager at Deutsche Asset Management, also focusing on its funds of funds. Shelterwood Adds To Team For New Biz Multi-family office Shelterwood Financial Services has brought on Dimitri Balatsos as senior advisor in charge of new business growth. Balatsos will bring his background as founder of global investment management firm Tesseract Partners where he worked with U.S. and international clients. The Manhattanbased MFO is looking to bolster its ultra-high-net-worth client base, particularly in London, major European hubs and throughout the U.S., and Balatsos was brought on to help with this growth. Balatsos, who will continue in an advisory role with his former firm, will also focus on multi-generational investment planning for family business owners. “Shelterwood understand to its core that wealth management means more than just managing Private Asset Management assets,” he said. Shelterwood, founded in 2004 as a subsidiary of family business J.M. Huber, focuses on investment management, succession planning and tax and estate planning. Silver Bridge Hosts Philanthropic Session Multi-family office Silver Bridge Advisors held a workshop on strategic philanthropy, as part of the launch of its monthly Women’s Initiative series. The workshop, held Jan. 27 at the Bostonbased firm’s headquarters, focused on philanthropic trends and giving during Steve Prostano recessionary times, an economic overview and breakout sessions on how to create a giving plan. Steve Prostano, ceo, said the goal was for participants to come away with a personal mission statement for charitable giving. Advisory firm speakers included Janet Atkins, principal of Ridgeway Advisors, Anne Ellinger, co-founder of Bolder Giving and Abbie von Schlegell, principal of A. von Schlegell & Co. who led the sessions and discussion groups. Michelle Knight, director of fixed income with the MFO, also participated in the session, which is part of the firm’s monthly series Women’s Initiative: Enrich, Engage, Enjoy. Costs could not be determined. Highmount Grows Staff Multi-family office Highmount Capital has brought on two senior executives in New York and Boston, its headquarters, and is aggressively looking to hire more executives in those cities, said Darcy Bhatia, partner. Highmount hired David Thompson, former managing director with North Darcy Bhatia American Management, as managing director of fixed income. The position was created to emphasize fixed income investment opportunities at the firm, said Bhatia. Additionally, Nancy Brickley was brought on in Boston as managing director to focus on business development. Brickley, former managing principal with North American Management, is also responsible for marketing and client sourcing efforts. For additional hires, Bhatia said the firm is targeting those who have recently left big banks and are looking for a boutique atmosphere. “We’re also looking for good people to join us in both New York and Boston who might be displaced from all the big banks merging,” said Bhatia, declining to provide a target of how many more the firm will add. Highmount has $1.3 billion in assets under management. To receive email alerts or online access, call 800-715-9195. 5 Project2 1/13/09 11:58 AM Page 1 PAM020909 2/5/09 4:43 PM Page 7 February 9, 2009 www.iiwealthmanagement.com Family Office (cont’d) Tag Associates Taps Tax Pro New York-based multi-family office Tag Associates has hired Stephen Cutting, former owner and president of Albany-based MFO SMC Advisory, for a newly-created post of director of tax services. David Basner, president and coo, said Cutting was brought on to review tax work and compliance for family office clients, adding he hopes to evolve the role into a managing director post for client advisory. Cutting, who reports to Clara Wong, managing director, said he decided to leave SMC Advisory and move to Manhattan for personal reasons. “I wanted to be part of a boutique firm with high-quality MFO services,” Cutting added, declining to comment on replacement plans for his old post. Tag Associates caters to families with $20 million and above providing investment, financial and tax planning, compliance and controllership services. Tag has $5 billion in assets under management. David Glaser and Gary Teigman with search firm ECG Resources conducted the search. Research Unhappy HNW Investors Moved Assets More than half of wealthy investors who planned to withdraw assets from their advisory firms in September, immediately following the fall of Lehman Brothers, have done so, according to a Prince & Associates study. The study, a follow-up to an investor behavior study conducted in September, found that Hannah Shaw Grove 48.2% took assets from their primary advisor out of the 80.6% of high-net-worth who said they would do this. They in turn invested these assets with other advisors. Hannah Shaw Grove, managing partner at Prince & Associates, told PAM the prolonged nature of the economic crisis prompted investors to make these changes. “A number of investors cited the idea of diversifying their relationships so they had less risk of having their advisor become unemployed or firm go bankrupt,” said Grove. She added, “For the first time in a long time people are concerned about having all of their assets in a single relationship because so many companies are failing and requiring government support.” Grove said the biggest disparity between last fall’s results and the new study is how participants responded to and then acted on their intent to recommend avoiding their advisor’s firm. Last fall, 85.7% of participants said they would recommend avoiding their advisor’s firm, while just 14.9% of those investors acted on Private Asset Management Bessemer Hires Business Development Officer Bessemer Trust has tapped Gilbert Chapman, principal with Bernstein Global Wealth Management, in the new role of business development officer. New York-based Chapman reports to Andrew Parker, managing director. Chapman, a 25-year industry veteran, was brought on to work with high-net-worth Gilbert Chapman families in Long Island and build investment strategies, as well as bring in new business, said a spokesman. Calls to Chapman were referred to the spokesman. Calls to Bernstein GWM regarding replacement plans were not returned. Bessemer Trust has more than $53.8 billion in assets under advisement for approximately 1,900 family relationships. It provides various investment, tax, legacy planning and philanthropic services. that intention. Grove said many investors who have left an advisor or took some assets out are now taking a long-term view, and holding off on making more changes until they see the results of their move. The study is based on telephone interviews with 228 investors with $1 million and above, and Grove expects to do a follow-up later this year. Real Estate Favorable With Younger Rich Younger high-net-worth investors—those ages 25 to 45 with $1 million or more in net worth—are more likely to invest in real estate in the future compared to their older counterparts. In the Spectrem Group group’s January newsletter, Millionaire Corner, 34% of younger wealthy investors said they still consider real estate a good investment while just 17% of all wealthy investors said they look at real estate as a solid investment and plan to invest in the future. “For a lot of these people, real estate feels safe and that is because they see it as a long term investment and not a short term,” said Cathy McBreen, managing director of Spectrem’s consulting and research divisions. She said real estate is appealing to younger investors because of its attractive price levels and is also a way to pass on intergenerational wealth. McBreen said real estate generally increases in value even though it has taken a large hit as of late. She added that wealthy investors To receive email alerts or online access, call 800-715-9195. 7 PAM020909 2/5/09 4:43 PM Page 8 Private Asset Management www.iiwealthmanagement.com February 9, 2009 Research (cont’d) are buying “income producing real estate,” which is made up of office buildings or rental properties, and are staying away from investing in vacation areas or vacation-type homes of late. The study is based on interviews with focus groups and an online study of 750 millionaires—those with more than $1 million of net worth—in New York, Palm Beach, Seattle, Los Angeles and Chicago. Problem? What Problem… Advisors Missing The Mark On HNW Fears The high-net-worth advisor is underestimating how severely market volatility is affecting their clients’ attitudes, according to a Phoenix Companies survey Taking The Temperature of Today’s HNW Consumers And Advisors. Walter Zultowski, senior v.p. of research and concept development, told PAM that the study found Cathy McBreen the wealthy are consistently more bearish on the economy and its prospects for sustainable growth than their advisors. He said the disconnect could be caused by advisors having more experience with a bad economy and being more hopeful that it will bounce back. Zultowski said 71% of HNW consumers cited that they are more or much more concerned about their lifestyle changing, while 65% of advisors cited the same. When HNW consumers who are within five years of retirement were asked whether their retirement plans have changed, 30% said they are changing their retirement plans while another 38% said they have not yet changed their plans but are thinking about retiring later. “Concern over retirement security has just been aggravated even more so now, and maybe it’s actually starting to play into the HNW’s behavior such that a third of these people are saying ‘yes I’m going to have to work later now,’” said Zultowski. The survey queried 200 HNW clients and 200 HNW advisors in November. PAM020909 2/5/09 4:43 PM February 9, 2009 Page 9 www.iiwealthmanagement.com Private Asset Management On The Move • Credit Suisse Private Bank USA has tapped Jonathan Torop from Goldman Sachs Private Wealth Management. New Yorkbased Torop spent 10 years with Goldman, where he focused on high-net-worth U.S. clients with Middle Eastern ties. • Baird has hired David DiStefano from Virchow Krause, an accounting and consulting firm, for its Janesville, Wisc. branch. DiStefano joins The Greene Group at Baird, which includes financial advisors Derek Greene and Debra Cerny. • RBC Wealth Management has nabbed the Petrucci Team from UBS Wealth Management in Minneapolis. The team, led by financial advisor Gary Petrucci, joins with more than $300 million in assets under management. Other associates include Lory Dubbels and Deb Stueven. RBC WM has also tapped the team of Bill Hedges, Lance Newlin and Shelley Johnson also from UBS for its Reno hub. They join with $200 million in AUM. • UBS Wealth Management has hired Maynard and Sally Engel from Merrill Lynch in New York for its Midtown office. The team joins with $187 million in AUM. UBS also tapped John Lucas from Credit Suisse Private Bank in San Francisco. Lucas joins with $150 million in AUM. • Levitt Capital Management, a Boca Raton, Fla.-based boutique wealth manager, has brought on David Alexander Jefferds as the managing director of investments from Vanquish Capital Group. Jefferds replaces Warren Buhai, who is slated to return to his native South Africa, in the post. • Barclays Wealth has hired Adam Shafiroff from RBC Wealth Management as director for its New York office. Shafiroff works with high-net-worth clients with more than $10 million in investable assets. • Merrill Lynch’s Global Wealth Management Group has snagged Smith Barney advisors Peter Jurasz, Doug Scudder and Brian Lingle for its Juneau hub. The team joins with $350 million in AUM and caters to clients who are primarily entrepreneurs in the Juneau, Anchorage and Seattle areas, Jurasz told PAM. Wealth Management Happenings • High Water Women will host its fourth • Family Wealth Alliance will host its inaugural 40 Minus annual Casino Night Gala April 2. The volunteer organization, comprised of women in the hedge fund and wealth management industry, will donate proceeds from the event to at-risk New York City women and children. The event, to be held at 7W New York in Midtown, will feature a Black Jack tournament, Craps table, sit-down dinner and cocktail reception. Leadership Summit from March 4-5. The event will acknowledge executives who are 40 years old or under and have made significant contributions to the wealth management space, and shown leadership in the challenging market. It will be held at the State Street headquarters in Boston. • Irvine, Calif.-based Prosperitas, a high-net-worth peer group, family business and succession planning in the current economy. Partner Mitchell Kops will host the session, Finding the Silver Lining: Opportunities in a Challenging Economy, to discuss liquidity options, succession planning and structuring, and opportunities for devaluation in family businesses for tax and succession planning. Clients can attend either the Feb. 25 or March 4 session, which will be held at the Hyatt Regency Greenwich and Withers’ Manhattan office, respectively. The law firm is partnering with family business advisory firm de Visscher & Co. for the sessions. will hold its first annual economic summit, Wake Up America!, February 19. The summit, which is slated to take place at UC Irvine, will focus on thriving and surviving in 2009 and agenda topics include how to navigate current economic events, meeting the China Challenge and a viewing and discussion of the film I.O.U.S.A. about the national debt. • The ABA Wealth Management and Trust Conference is slated to take place March 11-13 at the San Francisco Marriott. The annual conference, hosted by the American Bankers Association, is geared toward financial advisors, portfolio managers, and trust and estate planning attorneys. Agenda topics include nurturing client resilience in the face of turbulent markets, how unified managed accounts are changing wealth management and estate planning for the Lesbian Gay Bisexual and Transgender community. • Withers Bergman will host a session dedicated to managing a [Editor’s Note: Beginning with this issue, PAM will feature a Wealth Management Happenings section which will include a wrap-up of events, conferences and receptions. Please feel free to submit your event to Marianne Nardone, managing editor of PAM, at [email protected].] To receive email alerts or online access, call 800-715-9195. 9 II News-CAP-PAM 2/7/08 3:40 PM Page 1 Corporate Access Program Get instant, online access to Private Asset Management for everyone — every associate — in your firm. This Corporate Access Program (CAP) is being offered now for ONE PRICE — Call now to get your discount and start your firm’s subscription to www.iiwealthmanagement.com. Your Corporate Access Subscription Includes: > Bi-weekly email updates available exclusively to subscribers > Breaking news sent to each designated person at your firm > Vital intelligence on firm reorganizations > The latest in family office news > The Wining & Dining section provides you with client retention initiatives > News updated regularly at iiwealthmanagement.com > Searchable archives featuring unlimited access > News available on the Friday before the publication date > A cost-effective way to disseminate information > Protection against copyright violations — your firm is protected > Mobile-friendly website coming soon > Blackberry-friendly email delivery coming soon For more information please contact: Dan Lalor 212.224.3045 [email protected] Private Asset Management – Critical Intelligence for the High Net-Worth Arena PAM020909 2/5/09 4:43 PM Page 11 February 9, 2009 www.iiwealthmanagement.com BOFA, UST (continued from page 1) report to Gary Gore, head of the Richmond office. On the West coast, the Los Angeles office has also been whacked as a hub, but the office remains open. There was talk it would report into Century City, but that could not be confirmed. On the family office side, the firm is looking at how best to combine BofA, UST’s MFO, and Merrill’s FOS division. Merrill pulled back on plans to launch a full-blown multi-family office after the acquisition was announced (PAM, 11/3). Firm officials either declined to elaborate or could not be reached. —Kristen Oliveri LAW FIRMS (continued from page 1) tight-knit market with a well-known name. The firm then launched a family office division at the start of the year. Boston area law firms Choate Hall & Stewart and Mintz Levin have rolled out Choate Investment Advisory and Mintz Levin Financial Advisors, respectively, to cater to highnet-worth in the area, although specifics could not be determined. Boston law firm Ropes & Gray is also reportedly in the early stages of starting a family office. Calls to Todd Milay, head of Choate Investment Advisory, and Cary Geller, an advisor with Mintz Levin FA, were not returned by press time. A spokeswoman for Ropes & Gray did not return calls. The New England wealth management market is tough to break into, but well-established, large law firms are using existing client bases and their reputation to attract clients, said Roger Private Asset Management Hobby, head of Wilmington Trust Boston. These law firms can compete with larger banks through their existing estate, trust and succession planning services. To staff the new efforts, there is a surplus of wealth management professionals available for hire, following downsizing at larger firms in the area. The ability for law firms to act as trustees originally grew out of the whaling industry, when whalers at sea for years asked their attorneys to oversee investments as well as their legal affairs. —Marianne Nardone FIRMS, FAMILY (continued from page 1) and Susan Massenzio, who works with Whittaker as a counselor, told PAM they have been speaking more frequently on trustbuilding through Webinars and other forums for private bankers and advisors. Whittaker said families want more attention on the human aspect of living with or losing wealth, and legal and financial disciplines often cannot provide this. Wells Fargo’s multi-family office, The Family Wealth Group, recently employed two wealth counselors for both their relationship managers and family office clients. Calls to relationship managers Jamie Traeger-Muney and Rebecca Trobe with Wells were referred to a spokeswoman who did not respond by press time. One wealth management firm that has signed on for service agreements with independent wealth counselor Szifra Birke, a licensed therapist and president of Birke Consulting, is Lexington Wealth Management. Kristine Porcaro, coo and cofounder, said especially in these times, wealth counseling for TRIAL ORDER FORM www.iiwealthmanagement.com ❑ YES! Please begin my no-risk free trial to Private Asset Management today! NAME TITLE B400101 FIRM ADDRESS CITY/STATE POSTAL CODE/ZIP COUNTRY TEL FAX E-MAIL The information you provide will be safeguarded by the Euromoney Institutional Investor PLC group, whose subsidiaries may use it to keep you informed of relevant products and services. We occasionally allow reputable companies outside the Euromoney Group to mail details of products which may be of interest to you. As an international group, we may transfer your data on a global basis for the purposes indicated above. ( ) Please tick if you object to contact by telephone. ( ) Please tick if you object to contact by fax. ( ) Please tick if you object to contact by email. ( ) Please tick if you do not want us to share your information with other reputable businesses. UNITED STATES UNITED KINGDOM HONG KONG Tel: Fax: Email: Mail: Tel: Fax: Email: Mail: Tel: Fax: Email: Mail: 1-212-224-3007 1-615-377-0525 [email protected] Institutional Investor News P.O. Box 5016 Brentwood, TN 37024-5016 44 207 779 8929 44 207 779 8619 [email protected] Julian Davies Institutional Investor News Nestor House, Playhouse Yard London, EC4V 5EX, England 852 2842 6910 852 2543 7617 [email protected] Edealia Cheung Institutional Investor News 17/F, Printing House, 6 Duddell Street Central, Hong Kong PAM020909 2/5/09 4:43 PM Page 12 Private Asset Management www.iiwealthmanagement.com clients has played a strategic role in deepening client relationships and providing a more open discourse. Jim Grubman, a clinical psychologist and head of Massachusetts-based FamilyWealth Consulting, said he has seen a 20% increase in referrals since the fall from clients and wealth management firms who manage at least $25 million in assets. Most of the counseling of late surrounds working with advisors who are burned out, exhausted and considering leaving the field HEIDI NEDWURTH’S NOTES Citi’s High-Flying Plans Leave Heidi Cold The rough ride in the economy has halted Citigroup from enjoying their ride—make that a near purchase of a French luxury jet—with the firm scrapping plans to purchase a $50 million Dassault Falcon 7x. The corporate jet is designed to hold eight passengers plus a crew of four, boasts hand-selected, custom-crafted interior furnishings and can fly 5,950 miles without refueling. But before Citi executives could try out the luxurious digs many legislators and even President Obama publicly chastised the former banking behemoth for considering the jet after it accepted $45 billion in government funding. Heidi thinks Citi big-wigs should look to more grounded venues to get their luxury on. It has been reported that the wealthy in Abu Dhabi are enjoying rose champagne, chocolate cake and cappuccinos all flaked in gold while the wealthy in Russia prefer their gold to be eaten with caviar and oysters. On the ground, these golden delicacies would set you back about $3K for a three-liter bottle of the rose champagne, according to reports. Maybe former Wall Street titans, such as those sugar-daddies who recently attended the everpopular Fashion Meets Finance party at the Empire Hotel in Midtown, can impress their less wealthy sweethearts with Heidi’s favorite: the extremely valuable and edible gold leaf for a mere $15K a pound. The wealthy fat cats could also follow ousted Merrill Lynch ceo John Thain’s lead and drop a cool $1.2 million on, amongst other things, a trash can, area rug, mahogany table, curtains and a “commode on legs”—all must haves in any plush office including Heidi’s! 12 February 9, 2009 because of portfolio losses and client reaction to the Bernard L. Madoff Investment Securities fallout. Unlike the peer support groups that have sprung up among investors who were burned by Madoff, wealth counselors are providing private, professional services for clients and typically charge an hourly or per diem rate for consultations. Gary Shunk, a licensed psychotherapist and head of Chicago-based Wealth Psychology, and Birke both reported a 50% increase in client referrals and inquiries since last fall. —Melissa Karsh Quote Of The Week “A number of investors cited the idea of diversifying their relationships so they had less risk of having their advisor become unemployed or firm go bankrupt.”—Hannah Shaw Grove, managing partner at Prince & Associates, responding to the firm’s study which found that more than half of wealthy clients who planned to would withdraw assets from their advisory firm actually did so (see story, page 7). One Year Ago In Private Asset Management • Jennifer Povlitz, head of the Eastern division for Merrill Lynch’s Private Banking and Investment Group, left the firm to relocate to Newport Beach, Calif. [Povlitz originally took a role as managing director and head of the wealth management group for San Francisco-based Presidio Financial Partners (PAM, 2/21). Povlitz later decided to stay with Merrill Lynch, accepting a post as regional managing director for Northern California (PAM, 4/4).] • New York Private Bank and Trust expanded its Manhattan- based hub and launched offices throughout the U.S. It expanded its platform to offer a fee-based outsourcing service to firms who were looking to expand their private banking capabilities. Five Years Ago • Northern Trust Global Advisors hired Chris Vella from Goldman Sachs’ Global Multi-Manager Strategies group to run equity and fixed-income manager and due diligence selection. [Keith Ardizzone and John Voltaggio, former managing directors with U.S. Trust’s multi-family office in N.Y., joined Northern as relationship managers as part of the firm’s expansion plans in the Chicago area (PAM, 1/26).] • Family offices were making a push into hedge fund management, following predications that the number of singleand multi-family offices managing hedge fund of funds was projected to double within three years, according to a Prince & Associates family office survey. ©Institutional Investor News 2009. Reproduction requires publisher’s prior permission.