But back in 1967, both Wright and Bergmann worked in a rarefied investment and advisory environment devoted entirely to directing the assets of one wealthy Midwestern family, the Millers, who founded Cummins Engine Corp. in Columbia, Ind. "Thirty five Ph.D.s, MBAs and JDs were devoted to managing the wealth of one family. It was an amazing environment, and the client had wealth beyond their needs that allowed us to ask: How do they use it wisely?" Wright says.
One way was through the formation of a family foundation for charitable giving that funded not only architecture throughout the city but also research on, among other things, Americans' sentiments toward U.S. relations with China. Wright maintains that American citizens' surprising willingness to open the door with the Asian giant, which the Cummins Foundation survey revealed, influenced President Nixon and Secretary of State Henry Kissinger to begin to recognize and enter relations with China. "It was an incredible period, where if you helped people create wealth and they surpassed their needs, they could do things to make society a far better place. That's stuck with us forever," Wright says.
From there, Wright went on to create the Los Angeles planning office for Shearson, Hammill, soon after recruiting Bergmann. Together, they built a small, but significant, practice of business executives. Instead of trying to adapt their fee practice to the brokerage regime that Hayden Stone brought with it when it acquired the company in 1975, Wright and Bergmann bought their practice and nearly doubled it in 1977.
Their track record has impressed fellow financial services and trust executives. "These guys have had big-time experience before going out and building a business," says Jeffrey R. Lauterbach, chairman and CEO of The Capital Trust Company of Delaware in Wilmington. "The addition of the trust services will allow them to do what they said they want to do, serve their clients and the local community," adds Lauterbach, a former journalist who's stayed in touch with Wright since interviewing him in 1984.
Striking out on their own was a launching pad for the firm Wright and Bergmann have built today, but the formative years told them a lot about themselves and the kind of firm they wanted to grow. Providing discriminating clients with customized services and encouraging them to envision their legacy remain key building blocks of AMG today.
It's why the company built its own charitable foundation six years ago. "As the population ages and gets wealthier, our foundation allows them to fulfill their charitable and giving desires and allows them to participate at a lower bar so they can get started off sooner," Reeder says. For as little as $50,000, clients can set up a family trust within AMG's public foundation, which gives them the benefit of controlling assets and distributions, for a significantly reduced fee.
At the same time, the partners had a taste of what it might be like to be held prey by another firm, thanks to the acquisition of Shearson, Hammill. It was a quick lesson in the eat-or-be-eaten world of financial services. In order to do things their way they had to grow big. They have.
To do it, they've catered to business executives. Corporate clients include AT&T, Honeywell, The Home Depot, Lucent Technologies and Qwest. Today, the firm has clients in about 25% of the companies in the Fortune 1000 market, and it plans to grow that as part of their acquisitive strategy over the next five years.
To complement that client base, AMG has found a natural fit with entrepreneurs and successful professionals. To serve these clients, the firm created its own benefits-analysis department, which provides bottom-line numbers on stock options and other opportunities clients need help negotiating.
Corporate clients also are a growing component of their business. To provide seamless, informed and integrated services, the firm also created its own tax preparation and management department more than a decade ago. "You have people trying to cover this gamut today in planning with a Scotch tape approach-taping one thing to something else. But the process isn't really integrated, and the end results show it," Wright says. "If your investment and tax planning isn't tied together, you're giving subpar advice."