John Waldron came up through what were known as the “Big Eight” accounting firms, dealing with high-net-worth clients. It was at times a frustrating experience.

Waldron recalls how he would meticulously draw up comprehensive investment plans for his clients. But when they would ask him to implement the plans, he was prevented from doing so because he worked for an accounting firm.

That’s why he started Waldron Wealth Management in Pittsburgh, a successful boutique wealth management firm with about $3 billion in assets under consultation, serving clients with $5 million or more to invest.

Waldron was with Deloitte Haskins and Sells in 1995 when he decided to break out on his own. He was already dealing with high-net-worth individuals at the accounting firm, so transitioning to a wealth management practice serving similar clientele was a natural move. Creating a firm with a large client roster was never the goal; the firm has focused on a core group of wealthy clients. Now the firm has taken the next step in its growth plan, giving up its securities license, and leaving its longtime broker-dealer, LPL Financial, to become an independent registered investment advisor (RIA) with two custodians.

“This is a highly competitive business, and LPL was a great partner during our maturation phase and will be a great partner in the future,” Waldron says. “But it was time to take the next step to complete independence.”

After vetting the top custodians in the RIA custody space, Waldron decided to go with Pershing Advisor Solutions, a BNY Mellon company, and Fidelity Family Office Services as its custodians, and go with Fortigent for research, reporting and account aggregation. LPL Financial acquired Fortigent, which works with firms serving high-net-worth clients, last year, so Waldron Wealth Management has not severed all of its ties with LPL.

“We think that Fortigent is a great partner and will help us take the next step in the family office space,” says Waldron. “LPL has done a great job with this acquisition.”

Pershing Advisor Solutions was selected as a custodian because of its practice management expertise and global bank franchise, says Matt Helfrich, Waldron’s chief investment strategist. Fidelity Family Office Services was selected because of its expertise in multi-generational family wealth issues.

“The utilization of trust services by BNY/Mellon was certainly a factor in our decision to select Pershing,” Helfrich says. “We were excited to hear about BNY Mellon’s recent steps to incorporate their banking custody and other offerings into the Pershing Advisor Solutions suite.  It is something we are evaluating for broader use amongst our clients.  Additionally, we think the recent realignment of leadership at BNY Mellon shows their commitment to the asset custody space.”

Helfrich led the transition project internally beginning in mid-July. John Furey of Advisor Growth Strategies LLC served as a consultant during the selection process. The paperwork needed to implement the transition plan was completed between October 12 and January 7, an eventful period.

“We had a presidential election, a so-called ‘fiscal cliff,’ two major holidays, and a hurricane on the East Coast,” Waldron says. “I couldn’t be happier with the commitment our team and clients made to our transition through all of that.”

Richard E. Wiley, a Waldron client who is a prominent Washington attorney and a former chairman of the Federal Communications Commission, says the process was painless and reinforced his satisfaction with Waldron Wealth Management.

Wiley says he didn’t realize these types of transitions could be disruptive given the experience he has had with Waldron.
“It is good to have someone who knows what they are doing on all aspects of financial issues, not just on investments,” Wiley says. “John’s firm handles taxes, estate, insurance, cash flow and all other issues.”

Waldron has an ideal client-specific value proposal to deliver, says Gabriel Garcia, director of relationship management and consulting for Pershing Advisor Solutions.

“He has a proactive growth strategy that is focused,” he adds.

Waldron’s tagline is “Simplifying Life.” It is the firm’s philosophy that as wealth accumulates, the issues not only multiply, but become more complex and crucial. This creates stress and anxiety for clients. Waldron believes simplifying wealth will enrich the client’s life.

He says the firm’s ability to break down any financial issue, evaluate the ripple effect it will have on a client’s life and then execute a planning strategy simplifies life for the clients.

“Investment management, while important, is not the only thing we handle,” Waldron says. “You must understand all the other implications, from taxes to estate planning to legal issues. We coordinate these components for our wealthy families with complex financial issues.”

“Estate attorneys love working with our firm,” adds Helfrich. “We have been told we make their practices more efficient when we collaborate together on mutual clients.”

One of the fastest-growing parts of the business is helping clients communicate with their children and grandchildren about their inheritance, Waldron says. “More and more, clients are asking us to get into these discussions,” he says.
“Either they do not want to share information with the children or they do not know how to articulate the information. But at the same time, the children are seeing how the family lives and are overestimating how much money they are going to get.

“We call it the law of taxation and division. By the time the money is taxed and divided among siblings, it is not as much as they think it will be. This is where we can be an invaluable service to our clients, by helping to educate the children.”

Waldron Wealth Management has 25 staff members. It trimmed its client roster down to 100 from 150 in the transition to RIA, leading to an unusually high ratio of staff to clients. Most remaining clients are divided between the firm’s multifamily office and private wealth management divisions. The multifamily office group is made up of families with multigenerational wealth and business owners that have been through a liquidity event. Multifamily office clients have net worth between $25 million and $100 million, while the private wealth management group services high-income professionals with a net worth between $5 million and $25 million.

The firm has about $1.2 billion in assets under management and consults with clients with nearly $3 billion in net worth.
Allocations are tailored to clients’ specific needs and are handled by both active and passive third-party managers.
Helfrich says all client allocations are chosen by cash-flow analysis and other considerations.

“Wealthy individuals have unique needs that require individualized solutions,” Helfrich adds. “You need to ensure you have a proper handling of their current and future liquidity and tax efficiency needs.”

For the future, Waldron says the firm needs to get to feel at home with the current changes before undertaking any further projects. Waldron hopes to grow at about 20 clients a year.

“We want a qualitative fit first and then quantitative,” he says. “If a wealth manager brings us someone to add as a client, he or she has to justify why we should add that person or family office.

“After this transition, we are poised for 20% to 25% growth per year for the next three years.” The firm’s primary focus is to make sure it recruits clients who are a good fit for the firm, followed by generating investment return, he says.
“This ensures we are working with clients who understand and appreciate our value proposition, and that we can truly drive value to their financial management and lifetime wealth experience,” he adds.