Most of the remaining $5 billion under management is institutional, with close to half having arrived last summer via a merger with another former Alex. Brown & Sons company, Alex. Brown Investment Management.  Brown Advisory was attracted to ABIM's largely institutional clientele and its proprietary value investment style-what the firm calls "flexible value." ABIM saw the merger as an opportunity to expand its narrow focus by adding the advisory firm's broad menu of offerings. Plus, many of the two firms' principals knew one another from when they were both owned by Alex. Brown & Sons.

Separation From The Mother Ship
Both subs were eager to split from their parent after it was acquired in 1997 by Banker's Trust. The New York bank's product-driven culture seemed alien to the two relatively autonomous subsidiaries. Brown Advisory, for example, had its own research group and trading desk. "We used outside managers long before 'open architecture' was a cocktail-party phrase," Hankin says.

Most importantly, Brown Advisory had its own independent board of directors. The board not only supported breaking away-several directors were willing to back it financially. The board's support was critical, according to Hankin. "We didn't have to go out and raise money to go private," he says.

Independent directors continue to hold Brown Advisory stock today. They, along with select clients and other well-positioned outsiders, own about 30% and play a vital role, Hankin explains. "They serve as our eyes and ears into the world," he says. "We listen to their views, and then it's an easy transition to listen to the rest of the world."

Still, it's important for the employees to have majority control, he adds, so that investment strategy can be executed freely.  Every staff member with at least one year's tenure can acquire voting stock.  Currently, 94% of employees are owners, which has produced benefits beyond low turnover, Hankin says.  "When we get together quarterly to talk about the performance of the firm and how we are doing for clients, it is amazing how closely all of our employees pay attention."

A Different Way Of Doing Things
A very affluent Brown Advisory client typically has three advisors:  an investment professional, a strategic advisor (a highly experienced attorney) and a senior administrative person. There is no designated relationship manager.

"We leave that up to the client," Hankin says.  "They see which person they become most comfortable with, and that can change as the relationship evolves."  Clients obsessed with the markets gravitate toward the investment person.  Those who establish trusts and foundations often work with the strategic advisor. Families that have a heap of moving parts may rely on the administrative expert to keep it all from coming unglued.

Having a senior investment professional on the team is one of two things that differentiates Brown Advisory, Dumais asserts.  A portfolio manager who's sitting in the quarterly meeting with the client can provide the exact reason why a stock was sold or an asset-class weighting altered.  "That is a significant advantage with certain clients," Dumais says.

Hard-boiled CEOs and business owners, for example, don't like to hear "I'll get back to you" when they have a question about their investments. "They want to know, eyeball-to-eyeball, 'What are you doing for my portfolio right now?'" Dumais says.

The other distinguishing aspect of Brown Advisory is the high degree of interaction between the firm's investment and strategic advisory (planning) groups, Dumais says.  "It is not unusual for the portfolio manager on the team to come into my office and say, 'The Smith family has a large holding that has appreciated dramatically.  We know they have some charitable goals.  Should we talk to them now about a charitable remainder trust as a way to diversify this investment, achieve their philanthropic objectives and increase their cashflow?'"