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August 2012
Set Apart
By Barbara Fagan

     The name may be new but the service has roots that can be traced back for generations.

     In April 2012, Wells Fargo launched Abbot Downing to address the financial needs of ultra high net worth clients, their foundations and endowments. Their suite of services exceeds traditional financial planning and is specifically tailored to manage the unique needs of a select market of households with $50 million or more of investable assets or a net worth of at least $100 million.

     Formed by combining two Wells Fargo wealth management businesses—Lowry Hill Private Asset Management and Wells Fargo Family Wealth—it also has a North Carolina lineage through the former Wachovia family office, Calibre.

     “Calibre’s roots date back to Winston-Salem and the early 1970s,” explains David Parker, managing director of the Abbot Downing office in Charlotte. “It was a specialized group created to serve the needs of families from three quintessential North Carolina industries: tobacco, furniture and textiles. Abbot Downing is similar to Calibre in that it is a multi-family office practice but our new organization captures the best of the previous companies. We’ve pulled all those strengths together under the brand Abbot Downing.”


All-American History

     History played a key role in choosing the name for the new brand. It was Wells Fargo’s Chief Historian Dr. Andy Anderson who suggested the name not only for its important role in Wells Fargo’s colorful beginnings but also for the qualities of the company that Lewis Downing and J. Stephens Abbot created when they built their first custom stagecoach in 1827.

     Before railroads linked the American coasts, Wells Fargo used Abbot Downing stagecoaches to successfully transport their customers’ business across often inhospitable terrain to their final destinations. Since then, Wells Fargo has been indelibly linked through history and logo with the iconic stagecoach and the company that built it.

     Their Concord stagecoach was renowned for the smooth ride of its ingenious thoroughbrace design, its fine interior and the custom workmanship that allowed the coach to reliably traverse plains, deserts and mountains.

     “The Concord stagecoach was a masterpiece of its day,” says Senior Vice President and Communications Director Sandra Deem. “Its builder, Abbot Downing, was known for custom craftsmanship and for providing a distinctive passenger experience. When we researched what clients wanted from us, we found that they wanted a distinctive experience. The Abbot Downing name perfectly conveyed that.”

     Only about 10,000 U.S. households fall into the category of ultra high net worth individuals that make up Abbot Downing’s target market, but it’s estimated that this group collectively controls more than $1 trillion nationwide and is a growing segment both in the U.S. and internationally.

     Director, Client Management Ann Marie Schmitz credits this partially to demographics. “Statistics show that 65 to 70 percent of U.S. businesses will transition over the next 10 years, largely due to baby boomers coming into large amounts of liquidity when they sell their businesses. That’s why this segment is growing.”

     Director, Asset Management, Russell Wenner says that as of June 2012, Abbot Downing services more than 500 clients in all 50 states and has $30.7 billion in client assets through offices in San Francisco, Palo Alto, Los Angeles, Scottsdale, Denver, Houston, Minneapolis, Chicago, Philadelphia, Charlotte, Winston-Salem, Raleigh, Naples, Jacksonville, Washington, D.C. and Palm Beach.

     Parker lists several factors that drove the decision to open the Charlotte office two years ago. Among them is the fact that Charlotte is the 17th largest U.S. city, ranks 7th in number of Fortune 500 headquarters and is home to 11 venture capital and private equity firms.

     “Our client base consists of entrepreneurs, corporate executives, retired corporate executives and those with inherited wealth,” he says.

     “Our clients are a cross-section of the strongest industries in the Carolinas,” adds Schmitz. “But there is no stereotypical Charlotte client. We see first generation new wealth but we also have fourth and fifth generation clients.”

     “The Charlotte office is responsible for the greater Charlotte area and the entire state of South Carolina. Since many of our client families are multi-generational with members disbursed throughout the U.S., we’re often traveling throughout the country. Wherever the families are is where we are.”


The Best of Both Worlds

     Abbot Downing currently serves some 15 families out of their Charlotte office. With two client managers, the Charlotte office has an even more desirable ratio than the corporate goal of 15 clients to one professional.

     “We have the resource of time,” explains Wenner. “I don’t handle 50 clients; I handle, at most, 15 at any time. It allows us to provide a highly dedicated rate of service.”

     “All of our clients are treated with the highest level of service delivered today,” adds Parker. “I equate it to the premier luxury brands such as Tiffany’s—that’s the level of service excellence we provide.”

     “Our goal is to always exceed our clients’ expectations and we often receive feedback that we do,” explains Schmitz.

     A former Calibre client who continues as a client of Abbot Downing agrees. He relates how he was recently working against a deadline to transfer funds for a donation to a charitable remainder trust for the benefit of his alma mater and for various reasons, including an upcoming holiday, he was having difficulty getting it accomplished.

     “That was when David Parker jumped in and took care of it for me,” he recalls. “The entire staff goes out of their way to assist clients. There’s real personal attention.”

     But outstanding service isn’t the only reason he is an Abbot Downing client. “They offer a wide range of unusually sophisticated investment opportunities,” he says. “Part of the reason for that is the size of Wells Fargo. It has huge amounts of dollars under management and so they can offer investments not available to smaller firms.”

     Deem describes it this way, “Abbot Downing delivers a small boutique feel with an intimate service model of highly experienced and credentialed people who know their clients and their clients’ families personally, and yet it also has the strength and the vast resources of Wells Fargo supporting it. That’s a real distinction for Abbot Downing.”


Unique Services for Unique Families

     Unique wealth requires unique services and Abbot Downing uses four primary business lines to address the financial, social and personal dimensions of their clients’ needs: private banking; asset management; trust, fiduciary and administrative services; and planning and family dynamics.

     Within each of these lines is a wide array of services tailored to meet the needs of the ultra high net worth client including business succession planning, specialized loans, philanthropic guidance, trust administration, custom credit solutions, estate settlement and fiduciary services.

     Through Abbot Downing’s asset management team, clients can invest in hedge funds, private capital investments, private real estate, real assets, fixed income and equities often unavailable to most investors.

     “For us, asset management is an approach, a philosophy and a process,” explains Wenner. “Everybody uses the term ‘risk management’ but the families we work with have already taken a risk and the reward for that risk is the liquidity they’ve built. My primary responsibility is to understand what they want that wealth to do for them and their families and then to protect that wealth so that it can meet their goals and be there for the generations going forward.

     “We never make assumptions about a client’s goal. When we meet with a new client, I kiddingly say that my presentation is a blank sheet of paper. From an asset management perspective, the possibilities are almost endless.

     “We have this broad platform with Wells Fargo, but I look at everything available within the organization and outside of it to see what best fulfills what my client wants to accomplish. My loyalty is to the client and what’s in their best interest.

     “The challenge is that sometimes their goals aren’t realistic. That’s when we have an honest, open conversation and that leads to a refining and prioritization of objectives. We use the term ‘steward’ in our mission statement. That’s a strong word and carries a certain amount of responsibility. There’s a responsibility to our client to not just be ‘yes men.’ We work with them to accomplish their goals but we do it in the appropriate manner,” affirms Wenner.


A Family Vision

     Determining goals can often be challenging for the high net worth client. Family members can have differing and even conflicting goals. Several generations with distinct perspectives are often involved. And in some cases, differences arise when some family members work within the business and others do not. All this adds a high level of complexity to financial planning.

     In response, Abbot Downing has a team of professionals from several disciplines that not only assist clients in clarifying goals but also in dealing with a wide range of “soft issues.”

     “Our Family Dynamics practice is a huge differentiator for us,” Schmitz explains. “A vital role of this team is to be facilitators. We have licensed psychologists who work with families to determine goals or a family vision or mission. They facilitate the conversation, and often it’s a very difficult conversation when you have families with multiple generations. We help them clarify values, to communicate more effectively and to make decisions.

     “We also have a lot of experience in managing multi-generational family transitions, whether it’s a business transition or assisting them in establishing and managing a private foundation.

     “The Family Dynamics practice can also provide educational opportunities to younger generations. Reputation management is important to many families as is impactful gifting and giving and developing financial acumen. We provide programming to develop effective leaders for the next generation.

     “Dr. Anderson, our chief historian, can research a client family’s roots to educate the family about the history, the social, economic and political changes and the cultural differences their family members overcame. It’s important for families to understand their history.”

     “This industry is just beginning to recognize the importance of family dynamics for their clients,” adds Parker. “Our competitors like to use the terminology, but we’ve been doing this since the early years of Calibre. We’re not new to the game.

     “This is a competitive industry but our Charlotte office and each Abbot Downing office is leveraging all the experience of the 300 professionals across Abbot Downing. Our professionals are very collaborative, both internally and with our clients’ other advisors.

     “This is a business based on specialized expertise and it’s also based on relationships. We build strong relationships with our clients and our communities. Philanthropy is important to our clients, to Wells Fargo and to us. This year, Abbot Downing has made a commitment of $150,000 to non-profits throughout our regions and our Charlotte office is contributing and volunteering at The Harvest Center of Charlotte.

     “It takes us back to the reason we’re in this business,” Parker continues. “There’s an intangible reward in working with these families, in understanding them and earning their trust and confidence, in developing a plan to achieve their goals, implementing it and seeing the benefits and in engaging all the different generations in a shared family vision. There’s nothing more rewarding than that.”

Barbara Fagan is a Greater Charlotte Biz freelance writer.
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