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Since coming aboard at the end of last year new Boston Private CEO Anthony DeChellis has led a great deal of change at the company, including the hiring of an almost entirely new senior management team and the closing of a few small Boston Private offices.
But he’s just getting started.
DeChellis has recently unveiled an aggressive expansion plan that would see the bank triple its assets under management in its wealth management and trust division from roughly $16 billion now to about $50 billion by 2022. The plan also includes growing the bank’s private banking division 30 percent by 2022 and seeing the actual size of the bank grow from a roughly $8.4 billion in assets under management to $11.2 billion.
To achieve this, Boston Private plans to hire 100 financial advisers over the next three years, which would more than triple the number of total advisers it currently employs.
“Registered investment advisers are the fastest growing segment in wealth management space,” DeChellis said. “Both advisors and clients are leaning toward smaller, more boutique firms.”
Anthony DeChellis
Adding to A Unique Model
Unlike most state-chartered banks in Massachusetts, Boston Private operates on a model that puts a heavy emphasis on its wealth management and trust division, which caters to family-owned businesses, professional service firms, large real estate developers and private equity and venture capital firms.
These clients need commercial banking services but also need traditional wealth management and trust services, primarily for the principals at these companies. Many are funneled over from the company’s private and commercial banking divisions.
DeChellis said he wants to better balance the business opportunities the wealth and trust arm of the company sends to other divisions of the bank with the volume it receives.
The simple way to grow the wealth division is to bring on more financial advisers, who will in turn bring their book of business to the bank – potential customers for the bank’s other services. DeChellis said his goal is to onboard 10 to 12 high quality teams per year.
The back office support will be attractive, he said, but also the feeling of independence and the opportunity to pursue clients they may not have been able to at larger firms due to corporate bureaucracy.
“Some registered investment advisers want to go out and start their own shop, but when they do that, they have to manage their own company and leave behind some banking capabilities and services,” he said. “We think we are a really good alternative because we give them the same boutique feel they are looking to achieve for clients, but they won’t have to leave behind anything.”
DeChellis also wants to make the bank more user–friendly. DeChellis recently hired Maura Almy, formerly of Santander in Boston, who was brought on as the chief operating and platform officer.
Almy’s goal will be to provide more flexibility in the way clients interact with the bank by improving Boston Private’s mobile and online apps so clients have more access to customized data.
Bram Berkowitz
Can the Plan Succeed?
Boston Private may have its hands full, considering the company has struggled to grow assets under management in recent years, but its goals are not impossible, observers say.
“I certainly think it’s ambitious, but is it doable? Yes, absolutely,” said Alex Twerdahl, managing director of equity research at Sandler O’Neill + Partners. “If they can be successful, that could result in earnings-per-share doubling.”
Boston Private seems to be on solid strategic footing, he said, thanks to the work of former CEO Clay Deutsch, who retired last November.
When Deutsch came aboard as CEO in 2010, the fragmented company had few synergies, consisting of several entities under different charters.
Deutsch combined the charters, moved to a better wealth model and more recently divested several of the company’s non-core, non-synergistic subsidiaries.
Boston Private sold its stake in Boston-based Anchor Capital – essentially a hedge fund – and in Bingham, Osborn & Scarborough in order to build up Boston Private’s own wealth brand.
The company is now only left with two subsidiaries, which DeChellis said will be part of its future: New York City-based Dalton Greiner Hartman & Maher and KLS Professional Services Group.
To triple the assets under management in its wealth management division, Boston Private hopes to lure dozens of top wealth managers – and their books of business.
From Housecleaning to Growth
With Deutsch doing a lot of the necessary cleaning in prior years, it is now up to DeChellis to execute on the growth, a task that Twerdahl said DeChellis is very capable of doing.
DeChellis has spent three decades working in the wealth divisions at UBS, Merril Lynch and Credit Suisse, three of the largest wealth managers in the world.
This experience, Twerdahl said, has not only provided him with ample experience at growing wealth departments, but also built up a rolodex far bigger than Deutsch’s, which will play a critical role in adding registered investment advisers to the company.
DeChellis has already made five major hires, mostly people he knew and worked with during his time at Credit Suisse. Additionally, due to his many years in the industry, DeChellis said he knows 300 to 400 people on Barron’s Top 1,000 Financial Adviser List.
Ultimately, the number of advisers Boston Private can lure will be an indicator of whether the bank can accomplish its goals, according to Twerdahl, who said the market for good advisers is very competitive right now.
“If they are bringing on advisors, then assets under management should follow and if they can show this trajectory without expenses going up meaningfully, then they should be able to do what they say,” he said. “It’s not complicated. They have set targets and if they can hit them, the company is going to be much more profitable.”
