At Silver Bridge, the US wealth management firm focusing on ultra high net worth clients, its managers say that a stand-alone, focused approach to wealth management without distractions is the ideal approach for clients.

Editor's note: The article is part of a series of interviews held with wealth managers in the US west coast prior to the US presidential elections. 

One argument that comes up a good deal in the global wealth management industry is how a business can be shaped so as to manage, or minimize, conflicts of interest particularly in the case of large firms providing different services under one roof.

At Silver Bridge, the US wealth management firm focusing on ultra high net worth clients, its managers say that a stand-alone, focused approach to wealth management without distractions is the ideal approach for clients. In that case, there need be no fear about “product push”.

“We don’t believe in managing conflicts of interest but in eliminating them,” Martim de Arantes Oliveira, regional director for the west coast, told this publication during an interview at his firm’s San Francisco office. His firm oversees more than $3.0 billion of client money.

A benefit of lacking such conflicts, as can happen in big, all-in-one banking groups, de Arantes said, is that a genuinely independent wealth manager is less likely to be hobbled by regulation.

“I have never felt encumbered by regulation. It prevents the type of action that has turned our industry into a marsh-pit of dirty practices,” he said. “It [scandals and failures] have done tremendous damage,” he continued.

“The business is as scalable as it can be if our prime concern is the quality of the service we give to clients. There is no such thing as a cookie-cutter approach to the type of clients we serve,” he said. “We have to understand the limitations of scaling. Our clients are people who are very good at creating wealth…the learning curve to stewardship of that wealth is extremely steep,” he said. “A lot of mistakes can be made when you have gone from owner of operating assets to owner of a financial asset.”

This 80-year-old firm – it gets its name from a bridge in Boston where the firm started out – came into being when its parent firm, Wilmer Hale, started a wealth management practice, eventually becoming Silver Bridge. The actual rebranding is recent, happening in 2008, changing from the Hale Dorr Capital Management moniker. The firm's chief executive is Stephen Prostano; Thomas Manning leads the Silver Bridge Investment Solutions Group. 

“The rebranding came about when we took some very significant steps to move away from being a very private firm and move out into the limelight. The way we did this was by participating much more in industry events,” he said.

Higher profile

One consequence is that Silver Bridge is getting better known and putting itself about in the market a lot more, said de Arantes.

To illustrate, Silver Bridge’s educational platform, the Silver Bridge Institute, has expanded its financial literacy program for women, as reported here recently.

The Silver Bridge Institute is described by the business as a “critical component of our business model and... our primary vehicle to educate and empower our clients and communicate Thought Leadership”. Since it started, the Institute has hosted nearly 50 events which have drawn over 1,100 attendees. The firm says feedback from clients continues to be very positive.

There has been some recent rapid growth; the firm has 48 full-time staff in four offices (two offices in California and two in Massachusetts). Last year, staff numbers rose by 25 per cent, adding client advisors, family business, family office and philanthropy experts to service its Family Office Partners clients in addition to new talent in the financial planning, tax and accounting, technology and reporting areas.

When asked about future plans, the firm later told FWR: “We will continue to make strategic hires but we believe we are well staffed to serve our existing client base.”

Expansion?

Silver Bridge says it is looking to grow geographically and acquire other firms in US wealth markets. It says it is expanding its Family Office Partners platform to provide UHNW families services on an a la carte basis.  It offers dozens of individual capabilities to choose from, grouped across eight categories. Each of these services can be utilized a la carte or bundled to support a client’s overall plan.

The firm is also using targeted “outreach programs” aimed at specific client segments such as women and pro-athletes as a way to drive the business.

Besides UHNW individuals and their families, Silver Bridge also works with not-for-profits and foundations.

The firm does not operate on a simple, minimum investable asset measure when it comes to deciding whether a person can be a client or not, de Arantes said.

A unifying characteristic of such clients is the complexity of their needs, he said. This will relate to a client’s own balance sheet, wealth holdings, range of assets, geographic location of assets, and family governance issues, he continued.

“One of the things I say to clients is learn from the successes and failures of your peers about their wealth…..I used to carry in my briefcase a list of cognitive biases of people. I used to read through them to identify what my client was doing," he added.