Boston asset manager gets set to turn trust business into boutique advisory. Boston-based Congress Asset Management has named former SEI executive Paul Lonergan as president of its trust unit, Congress Trust. Congress wants Lonergan to help turn a comparatively little-used trust unit into a comprehensive wealth-management boutique for ultra-high-net-worth clients in the Boston area.

"We're taking the trust company to a new level," says Daniel Lagan, Congress' president and co-CIO. "[Lonergan] has great experience in the business, he's able to connect with clients and he can help put in a place a plan to grow our assets."

Lonergan was one of the architects of SEI's Wealth Network , an ambitious outsourcing program for providing wealth-management products and services to ultra-high-net-worth families, independent advisors and banks. Most recently, he headed SEI's multifamily office in Boston, the firm's only non-franchise, direct-to-end-client wealth office outside its Oaks, Pa., headquarters.

Next step

SEI spokeswoman Dana Grosser says SEI has closed its Boston "direct-to-consumer" Wealth Network office in Boston. But SEI won't say whether that was the cause of Lonergan's departure or a consequence of it. In any case, Wealth Network clients formerly served by Lonergan and his team in Boston are now handled by an ultra-wealth team based at SEI's head office.

Congress, which manages more than $5 billion in assets, is mainly focused on high-end retail clients, to whom it delivers separately managed accounts (SMAs) through wirehouse intermediaries.

But Congress doesn't think it'll vex its distributors by expanding its own direct-to-client efforts through its trust subsidiary. For one thing, says Lagan, it's aiming at extremely wealthy, family-office-type clients that aren't typically the big brokerages' bread and butter. In addition it plans to operate mainly, if not solely, in and around Boston.

A year-old report by Chicago-based Northern Trust confirms what many in the industry might have guessed on their own: Boston is a prime market for high-end advisory services. Looking at data compiled by Claritas, a San Diego-based market-research firm, Northern says that nearly 5% of Boston-area households were millionaire households 2004, and it expects the number of millionaire households in Boston -- about 58,000 in 2004 -- to hit 88,000 by 2009.

Though metropolises like New York, Los Angeles and Chicago have more high-end households in absolute terms, Boston's higher per capita puts it in a league with go-go wealth towns like Atlanta and Dallas. But unlike those cities, Boston's overall household growth lags that of its high-net-worth household growth, so that its economic elite is likely to have a greater impact on Boston's commerce and culture than their counterparts in other towns with rapidly growing high-net-worth populations.

Stephen Peters, CEO of Morrisville, N.C.-based VisionQuest Wealth Management , worked with Lonergan at SEI. "Paul is definitely the right guy to run that type of business," he says of Lonergan's appointment to run Congress Trust. "He's very smart, very personable and he has a strong track record."

Lonergan isn't the only higher-up at one of SEI's private-client-related businesses to leave the company in the past nine or 10 months. Last spring Carl Guarino, head of SEI's Advisor Network , and Jack May, head of marketing and sales for the same group, departed. Both said they left to start their own ventures, but their exits coincided with a campaign to assure Advisor Network clients -- mostly independent advisors and brokers -- that working with SEI was a an a la carte proposition, not a matter of joining the Advisor Network as a wealth-business franchisee or hitting the road, as some advisors had evidently come to believe.

Changes

Guarino and May were associated with the hard-charging build-out of the advisory-franchise business. Just prior to their departures, SEI moved the franchise business from the Advisor Network to the Wealth Network.

There were eight SEI wealth franchises at the end of 2005; all brought in since late 2004. There are still eight at this point in 2006. Early in 2005, SEI said it was aiming to open four or five franchisee-run offices a year with the long-term goal of having 200 such businesses under its wing.

As SEI's Grosser explains, the company is now more interested in making sure the franchises already up and running are on a firm footing than in backing that fairly rapid built out of new franchises it envisioned a few years ago. "The SEI [Wealth Network] is focused on working with the franchisees to help them grow their businesses as strategic partners of our company," she writes in an email to FWR. "To write casually, we want to help them be 'better, faster, and stronger' but we are not so concerned with growing the number of them."

Scott Mason runs Bala Cynwyd, Pa.-based Rubicon Wealth Management, an SEI wealth-management franchise since November 2004 and a beta tester for the SEI's "holistic" approach to wealth management for several years before that. "It's been great," he says of his partnership with SEI. "It's a good relationship, a good process and we're very pleased with the progress we've made here."

The "process" Mason mentions comes down to providing wealth advisory services "with no axe to grind and no end game other than the client's benefit."

Mason says he regrets the departures of Guarino, May and now Lonergan on a personal level, but the recent changes at SEI -- either in personnel or in strategic emphasis -- haven't touched his business at all. "You never like to see people you're fond of leave," he says. "But they made personal decisions to move on. I think the beauty of SEI is that there's always continuity for [its] partners."

Though increasing Congress Trust's client base is part of Lonergan's mandate, he'll also focus on offering more wealth services to unit's existing clients. In any event, says Congress' Lagan, it's understood that Lonergan won't be attempting to bring SEI Wealth Network clients to Congress Trust. -FWR

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