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Here’s Why This Newly-Minted RIA Joined Wells Fargo’s New Custody Business

By Garrett Keyes February 25, 2019

Former Wells Fargo Advisors FA Perry Mattern broke away from the Wells broker-dealer arm in February to launch independent $500 million RIA Mattern Capital Management.

Now the firm has joined Wells Fargo’s new custody business as its second entrant. Sitting with FA-IQ, Mattern explains why Mattern Capital Management was formed and why they chose Wells’ new RIA custody service offered through First Clearing.

Q: Why did you decide to leave Wells Fargo to start RIA Mattern Capital Management?

A: Everyone starts in the brokerage business. We have always acted as a fiduciary for our clients and been on the fee-for-advice side of the business for a while; we just happened to work inside a broker-dealer. But sometimes pushing for fiduciary standards inside a broker-dealer creates friction and conflicts of interest. That is just a natural reaction. But as fiduciary standards evolve in financial services, it was natural to form an RIA and eliminate any conflicts of interest. It lets us form the type of relationship with our clients we always wanted to have — one that is focused on the fiduciary side and is fee-only.

Q: Why did you decide Mattern should target high net worth clients?

A: The high net worth space is the core of what we have always served. When you start your career in any industry, you start at the bottom and work your way up. The first three years, I dealt with regular clients’ needs. But after 18 years you start to utilize your talent, resources, and time to fit the needs of more complex clients.

Mattern Capital Management has a talented staff, and it takes a talented staff to solve the complex problems high net worth clients may have.

Q: What will distinguish Mattern from its competition in the high net worth space?

A: Everyone in the high net worth space is pretty darn good at what they do. But one of our key differentiators is our ability to solve problems, which comes from truly knowing your clients. You must know all your clients by voice and everything that is happening in their families because it isn’t always about asset allocation, it’s about family dynamics. These people have lives and you must become more of a trusted advisor.

We know a lot of what goes on with these families. We tend to have [that kind of] relationship with the family member that lives around the corner from them and is always there for them. It’s a whole other level of familiarity and depth of relationship.

Q: Where will Mattern be in five years?

A: I’m not an empire builder; I’m a practitioner that wants to help their clients. But it’s important the firm grows and continues to seek and acquire new relationships. I’d like to be at a billion dollars in five years in terms of AUM, but the goal is more to be high quality and deliver something of extreme value rather than to scale.

The firm is now around $500 million.

Perry Mattern

Q: Why chose Wells Fargo to provide RIA custody services over other firms?

A: I think the firms are all very good at what they do when it comes to RIA custody services. But First Clearing, which is the trade name for Wells Fargo Clearing Services, has always been our custodian. They have about $1.7 trillion of assets and do custody and clearing for 69 broker-dealers, one of which happens to be Wells Fargo Advisors. In my case, we’ll be accessing the First Clearing services through TradePMR, a 20-year old firm that provides technology and custodial support to RIAs like me.

Also, this isn’t a new space for Wells Fargo; this is a new offering. Part of why we chose Wells Fargo’s RIA custody services is because it gives our clients a lack of disruption. And that’s because the account numbers wouldn’t change. Using First Clearing would be a near-seamless transition for the clients, and not having to get new account numbers and make out assets to a new firm is a positive. This makes it exceptionally easy and very smooth for the clients.

Familiarity with the Wells technological systems was a key component as well. We still get to keep all of Wells Fargo’s technology but now, through TradePMR’s middle-office solution, we have an open platform to not only use TradePMR’s technology but to bring on new technology. And as we bring in new technology, we will slowly turn off the Wells Fargo technology that is not as powerful as the new technology.

Q: Do you have concerns that this isn’t Wells Fargo’s main business and that they have competing business lines?

A: No. If Mattern was getting RIA custody services from somewhere else, it would be the same thing. Everyone is multi-channel, even Charles Schwab. All the firms have a bank distribution serving a certain type of audience, private client groups, high net worth groups — everyone is basically set up the same way.

Q: Were there any incentives to move to Wells for RIA custody services?

A: No, not a nickel. It was zero, and I don’t want to say who but there were incentives to go with others for custody services. But there weren’t any with Wells Fargo. They are extremely competitive, but they aren’t buying their way into the custody business — and that’s a good thing because that would be a conflict of interest.

*This interview was edited for both brevity and clarity*