Family Wealth Report talks to Rob Matthews, Fieldpoint Private's chief executive, about the firm's genesis and the trend's he's seeing at the moment.

Greenwich, CT-headquartered Fieldpoint Private was launched just as the 2008 financial crisis was unfolding – a time when there was actually an appetite for something different in the industry “if you were confident that it was stable and secure,” the firm’s chief executive told Family Wealth Report.

Bob Matthews, who became Fieldpoint’s CEO in 2010, acknowledged that the year of 2008 was indeed a tough environment for a new industry entrant. However, “a lot of the underpinnings of conflict and imprudence were exposed,” ultimately proving advantageous for the newcomer.

Today, Fieldpoint has under 500 clients, of which a number are billionaires and centa-millionaires, with the typical client having north of $30 million in total net worth (including non-financial assets). As at end-December 2013, the firm had $3.6 billion in assets under advisement, up from $140 million in AuA when Matthews arrived.

“We wanted to build a boutique European-style private bank versus a US-style wealth management firm because the client service experience generally among banks is much higher than wealth management firms - certainly in the US,” Matthews said.

Asked about the firm’s strategic direction in recent years, Matthews said that, “philosophically as its core, not much has changed - although we are executing in a way that we weren’t at the time.” He noted, for example, that the firm made a strategic decision early on to recruit top talent and marry it to cutting-edge technology. 

“We’ve accumulated some executive talent that you wouldn’t find until you hit very large firms like Goldman Sachs or JP Morgan,” he said (the firm’s chief investment officer, for example, is Bill Kennedy, previously global director of research at Citi). Indeed, Fieldpoint frequently appears on the pages of Family Wealth Report on news of its latest recruit(s); last month the firm hired Thomas Haug as a managing director and senior advisor in New York City, and the month before added Andrew Heitner as a managing director and senior advisor from Neuberger Berman, for example. Matthews said the firm's primary opportunities in the near term continue to be in the Connecticut/New York/New Jersey region, “but we’re also seeing quite a bit of growth with clients from Florida to Chicago to California.”

Meanwhile, he said most of the firm’s clients are people with “lots of good firms and good advisors,” but none of which is being coordinated. “They don’t have the ability to coordinate the activities of those firms and those firms themselves are not equipped to deal with each other.”

This one area the firm prizes itself: on the technology front, Matthews emphasized the importance of having a high-end platform that enables the firm to aggregate clients’ assets at all the firms they do business with into one “live,” secure database (which clients themselves can access).

“We don’t require clients to bring money to us – in fact we cannot – because we don’t custody anything,” Matthews said. “So it’s important that we see every asset everywhere.”

Trends

Speaking about some of the trends he’s seeing at the moment, Matthews acknowledged that the industry landscape is changing but emphasized that the rate of change, not the change itself, is having the most impact.

“The concept of clients wanting an aggregated view or superior performance reporting that includes multiple custodians or multiple firms, for example, is an old phenomenon,” he said. “The World Wealth Report has been explaining the demand for that in the high net worth space for two decades. It’s just amazing that so few firms have delivered.”

He also said he has observed a big trend among family offices toward “minimalism” – essentially meaning that there are far more family offices going small than large.

Many are starting to realize that large-scale infrastructure can be a drag on returns, with issues manifesting in the areas of human resources and reporting, he said. Specifically, many family offices are increasingly turning to outsourcing, notably in the areas of data aggregation, performance reporting and investment advice and manager due diligence – the latter being “very expensive to do at the family office level.”

Indeed, the topic of outsourcing has gained momentum in the wealth management and family office space as firms look for cheaper ways to introduce new tools that will boost efficiencies and ultimately client satisfaction.

“In one case one of our clients went from having a total staff of 17 to 5 and headed for 3 - and that firm has $2 billion of financial assets, so it’s a remarkable trend,” Matthews said.

Another significant trend that has always been there, he said - reiterating again that it’s linked with the rate of change and not change itself – is that people are becoming “acutely aware” of how important is it to communicate the wealth of the family to the family members who will have to deal with it. However, while doing that, many families are so busy trying to get their children involved that they forget to prepare their spouse.

Carol Pepper of Pepper International said during the Family Wealth Report Summit this March that she often hears the words “succession” and “next generation,” but believes “we need to start using the word mom.”

“We spend a lot of time these days helping families communicate their mission and the infrastructure and intricacies of family wealth between the spouses - and then down to the next gen,” Matthews said.