$1B Ex-Merrill Team Breaks Away to ‘Scratch Planning Itch’
After six years at Merrill Lynch and more than two decades working in the wirehouse environment, advisor Matthew Celenza admits that, in recent years, he’s increasingly felt a need to delve deeper into financial planning.
As part of Merrill’s Private Banking and Investment group, which focuses on clients with $10 million or more, Celenza says he came to the conclusion earlier this year that encroaching regulations coupled with too much bureaucracy was crimping his practice’s growth potential.
So in July, he made a clean break. Along with two other ex-Merrill advisors, Celenza left to start Boulevard Family Wealth. The Beverly Hills, Calif.-based team, which managed about $1 billion at the wirehouse, believe it’s better positioned now to deliver a broader range of investment planning strategies and personalized service menus to high-net-worth families.
In particular, Celenza tells FA-IQ the independent RIA is viewing such a move as a way to expand its ability to offer ultra-high-net-worth clients a family-office type of environment. That’s an area he says plays into his sweet spot after spending the bulk of his 20-year career at predecessor firms to Morgan Stanley, including Smith Barney, Citi and Barclays.
Q: You were part of Merrill’s elite PBIG unit serving ultra-HNW clients. How do you see going independent providing your team more resources?
A: PBIG is a very good organization. But over the past several years, we were increasingly facing more compliance and regulatory restrictions. It felt like we were being managed to the lowest common denominator. From a marketing standpoint, we also saw working at a large wirehouse as limiting our ability to brand ourselves more as a family office.
Q: What type of different investment services can you now offer?
A: Merrill and other wirehouses do a very good job of seeking out third-party money managers, whether they’re separately managed accounts or mutual funds. But from time to time, we ran across other traditional managers and funds which weren’t on the company’s platform. Don’t get me wrong — they did give us different options to work with outside managers. But it’s not like we were trying to do anything too esoteric. We just became frustrated in certain instances about having enough flexibility to properly customize investment decisions to each individual client’s unique financial needs.
Q: Are there other areas where you now feel less limited?
A: Besides certain occasional restrictions with using traditional outside managers, we also felt somewhat constrained working on a selective basis on private-equity and real estate deals for small business owners and entrepreneurs. For example, we had a client last year ask us for help in building a new hotel. It was a very clean business proposition in terms of working with him on lining up the lending piece of the deal. But we learned that Bank of America had made a corporate decision at that time to move away from offering construction loans to hospitality companies. So we didn’t have the ability to shop around at other banks. Now as an independent firm, we aren’t beholden to any particular lending portfolio.
Q: How else do you see going independent as aiding your ability to expand?
A: The main groups we work with are entrepreneurs and families representing first-generation wealth. But even though we’re in Los Angeles, one group we’ve never been well positioned to work with are talent-acquisition managers and actors. Since we’re now in complete control of our own operating budget, we plan to devote more resources to expanding into those types of entertainment-related areas. For example, we’re now talking to an advisor who’s a former NFL player. He wants to join our firm and work with pro athletes. We’re also talking to a few actors who started with us as clients and really took to the whole wealth management process. They’re now at the point in their entertainment careers where they’re expressing interest in working with us to become financial advisors.
Q: How are you building out your family office services menu?
A: In the past, we’ve offered our ultra-high-net-worth clients a range of different home management and bill paying types of services. But we had to do much of the work ourselves to enhance what the wirehouses were able to provide. Now, we’re partnering with a wide range of third-party specialists. The technology they’re bringing to our practice is making management of concierge services across different households much more robust and efficient for our staff.
Q: Are you switching software systems and other technology platforms as well?
A: We feel like a critical element in this new business is creating an open architecture technology platform in a way that integrates different computer systems with how we like to serve clients. I’ve got to admit to feeling a certain sense of disconnect in the past. The technologies we had to use were typically one legacy system layered on top of another. So we’ve brought in Dynasty Financial Partners to help us choose the best software for our business and take full advantage of social media tools. They’re also helping us to more efficiently work with our back-office systems and market ourselves more effectively.