FWR talks to Raj Bhattacharyya about his firm's recent acquisitions, his general approach to inorganic and organic growth, and the outlook.

Robertson Stephens, the US wealth management house, has acquired two teams of wealth managers on both sides of the country, as announced in December. The move came at the end of a year that saw some deceleration of industry M&A, but still plenty of activity overall. 

Family Wealth Report asked Raj Bhattacharyya, chief executive of the firm, about its growth strategy on both the inorganic and organic side.

“M&A plays an important role in our overall growth strategy as does organic growth; however, we don’t believe in aggregation for aggregation’s sake. When we are looking to merge with another firm, we want to ensure that our clients benefit from the transaction. I believe that M&A will continue to be resilient in 2023 because there are strong secular reasons for mergers,” Bhattacharyya said.

“However, buyers are becoming more selective, and valuations and deal structures may be different. For Robertson Stephens, philosophical alignment will continue to be a very important element for mergers. Advisors attracted to us believe that the components of a great client experience include a curated investment portfolio, a comprehensive wealth plan allowing the client to build a legacy, and intuitive technology under a fee-only, fiduciary standard. We continue to grow because we never lose sight of our values, and our advisors share a common goal of constantly evolving and providing world class client service,” he said.

Family Wealth Report has covered the M&A trend in the North American sector extensively, noting deceleration in the pace of deals as borrowing costs have risen and the economic position has become more difficult. Firms such as Mercer, for example, remain active in the M&A space. A desire for economies of scale to handle rising regulatory costs and client expectations, as well as a wish by older advisors to sell up and retire, are driving some of the deal flow. 

Coast to coast
This publication asked how geographically diverse the firm is now and whether there are areas where it wants to expand?

Bhattacharyya said that the firm started in San Francisco and New York five years ago; it operates 16 offices in the West Coast, the Mountain West, Northeast and Texas regions.

“While we are not focused on specific geographic areas, we are aiming to find high quality teams that align with Robertson Stephens in attractive markets all over the country. The teams that have joined us have tended to share our partnership culture, philosophy, and belief in a comprehensive wealth management service,” he continued. 

What are clients' top priorities at the moment and in what areas are they seeking help? 

“Current market volatility and the possibility of a recession next year [in 2023] has been concerning for our clients,” Bhattacharyya responded. “During market turmoil our role as wealth managers is to ensure that our clients have wealth plans in place and that their assets are appropriately allocated to a robust set of traditional and, if relevant, alternative assets.”

“It is especially important during times of volatility that we advise clients not to act rashly and thoughtfully make their investment decisions in conjunction with their wealth plans while purposely rebalancing portfolios and revisiting assumptions. At Robertson Stephens, we regularly publish internally generated commentary on the economic outlook and financial markets to help advisors have thorough discussions with clients and support them on investments and planning to reassure them in stressed times,” he added.