Glenmede officials don't want their firm to be one of the 800-pound gorillas of wealth management. That's because competing national full-service firms often have too many business lines, causing services for the well-heeled to become a sideline.
Glenmede differentiates itself as a pure investment and wealth management firm, says Al Piscopo, president and chief executive officer of the independent advisory firm, which has its headquarters in Philadelphia. He notes that wealth management usually doesn't generate the biggest margins at huge firms. Their more profitable lines are investment banking or possibly their families of homegrown funds.
"For a firm like Glenmede to exclusively focus on investment and wealth management, we have to deliver truly exceptional services. We can't subsidize our income statement with profits from investment banking and lending," Piscopo says. "Our clients are reassured knowing their assets are held separately from our firm balance sheet."
It's a service model that allows Glenmede to remain focused on clients' long-term interests, firm officials say.
"I think the private firm that is independent has the benefit of having a longer- term time horizon, which is a more appropriate match," says Gordon Fowler, the firm's managing director and chief investment officer, who will become Glenmede's president and chief executive officer after Piscopo retires at the end of the year.
And how do clients evaluate wealth management firms when they're selecting one? A consultant who monitors this industry says that one key for clients is the rate of return the firms garner for them. But that's not as important as other factors.
"Actually, we find the reputation of the firm is just about the most important factor in selecting someone," says Tom Wynn, a director with the Chicago-based Spectrum Group, which rates wealth management firms. "Banks usually come in low on these ratings unless you modify it and say 'private banks.'" Another key factor when clients choose these firms is referrals, either from a professional advisor or a friend or a family member.
This is the advantage Glenmede officials claim over their big competitors-that it's a privately held, independent wealth advisory and investment management firm and that it has 60 years or so in the business.
Four children of J.P. Pew, founder of Sun Oil Company, created the Glenmede Trust in 1956 and they also launched several Pew charitable trusts and engaged in various kinds of philanthropy. Pew's daughter Mabel Pew Myrin, for example, left her 300-acre farm to people with disabilities.
The four children, Mabel plus J. Howard Pew, J.N. Pew, and Mary Ethel Pew, originally designed the trust as a depository-or, as Glenmede officials call it, "a depository where money was cautiously invested and where the program of giving money would be well thought out, always keeping with the interests of the founders."