A small Boston advisory firm is poised to expand from New England to the Middle Atlantic states and beyond because its executives believe the richest Americans want alternatives to the money-center banks.
"I think many of the clients we hope to attract — the ultra-high-net-worth and families of very significant wealth — are really taking a step back after the last 12 months," Stephen Prostano, the president and chief operating officer of Silver Bridge Advisors, said in an interview last week. "Large financial services companies offering private banking and wealth management services are not of interest to them."
Within five years, Silver Bridge could move from $1.5 billion of assets under management to $6 billion or $7 billion, he said.
Silver Bridge's recent initiatives include hiring Benjamin Ledyard as regional director for the Middle Atlantic states and director of wealth strategies. Ledyard, who started at Silver Bridge Sept. 1, was a managing director and senior private-client adviser in the wealth advisory division at Wilmington Trust Corp. in Delaware.
Silver Bridge is seeking Delaware trust powers, which Prostano said he expects to have by early January at the latest. Ledyard's responsibilities will include expanding Silver Bridge's advisory services to the Middle Atlantic region and establishing a trust office in Greenville, Del., to offer services to clients nationwide. "Part of his role is to be an ambassador in the region and bring in new prospects and clients," said Prostano.
Silver Bridge has hired several people in the past year, giving it a total of 43 client advisers, investment professionals and wealth strategists. In March, it hired Allison Taff from Fidelity Investments as director of family office services. In November, it hired Lehman Brothers executive Deirdre Prescott as director of client development.
It also is looking for acquisitions, Prostano said. The company has had discussions with "people and firms" in California and wants to add offices in the top wealth markets nationally, he said.
The expansion plans are bold for a firm with $1.5 billion under management, but Prostano touted its well-capitalized parent, Wilmer Cutler Pickering Hale and Dorr LLP in Boston, as a stimulus to thinking big. Another is the fragmented market share among institutions that serve such clients, he said, adding that more than three-quarters of Silver Bridge's clients have at least $10 million of assets.
The time is right because the wealthy are concerned if advisers at large institutions are acting on their behalf, he said.
Are big banks really vulnerable to firms like Silver Bridge? Yes and no, said Alois Pirker, a senior analyst at Boston's Aite Group.
When it comes to serving the wealthy, he said, "you need to be a pretty nifty [registered investment adviser] in order to compete with the large firms in terms of capabilities." Big institutions have access, for instance, to an army of in-house specialists.
On the other hand, established trust businesses are vulnerable because they have not been known as innovators, Pirker said. "They just have sort of relied on stickiness," he said. "Performance has not been that critical."
Backed by its owner, Silver Bridge has been investing in its business for the past five years, Prostano said. The investments have broadened its focus from managing large-cap equities and fixed-income investments to serving clients' broader wealth needs. Its open architecture platform now includes about 60 managers, in every asset class, he said.
A year ago, Silver Bridge changed its the 0-year-old firm's name from Hale and Dorr Wealth Advisors. The message, Prostano said at the time, was its management, independence, employee ownership and compensation from clients alone meant "we are a more objective firm that is completely aligned with our clients' interests."