At the Philadelphia office of myCIO Wealth Partners LLC, Paul Bracaglia is relaxed in business casual attire on a late-August Friday afternoon as he holds down the fort while the firm's other two partners are on the road.
It's not often that all three partners are in the office the same day. Bracaglia was in Washington, D.C., on Monday that week and in Tampa, Fla., on Wednesday. "We have some clients with significant wealth, so we don't mind getting on an airplane and spending two to three hours with them," he says in a conference room overlooking the massive Philadelphia Art Museum across the Schuylkill River. "The three partners are in the office maybe one day a week--two at best. I have some long-standing clients who I know like a brother, so when I see them it's like visiting an old friend. It just so happens they're paying me for the visit."
Bracaglia, 52, joined the firm in 2007 when he and four team members moved their $1.6 billion investment advisory group from PricewaterhouseCoopers to myCIO. Bracaglia's practice focuses on serving high-net-worth folks, as well as advising 401(k) plans. PwC, along with many other major accounting firms around that time, was restructuring its operations by focusing on core audit and tax practices and jettisoning its investment advisory businesses.
Some of that activity was due to regulatory concerns raised by the Sarbanes-Oxley Act. For that and other reasons, Ernst & Young had earlier decided to cut ties with its investment advisory group. Two members of that group's Philadelphia office, David Lees and James Biles, took their clients with them and started myCIO in 2005. Their client list was chock-full of former and current corporate chairmen, CEOs and presidents of Standard & Poor's and Fortune 500 companies, and nearly all of them followed Lees, Biles and their team to the nascent venture.
MyCIO began with roughly $3 billion in assets under advisement, and thanks to the addition of Bracaglia's team and a steady pipeline of high-end prospects from its blue-chip clientele, it has doubled in size during the past six years. It recently hired two new staffers, and now has about 30 employees, most of them with varying professional designations ranging from CFPs and CFAs to CPAs and AIFs (accredited investment fiduciaries), along with MBAs and holders of Series 65 and 7 licenses.
True to its accounting firm background, myCIO will prepare a client's taxes--preparation fees typically run a cool $2,500. But myCIO is really about investment management, with a heavy overlay of comprehensive financial planning. The firm is a big believer that quarterly reviews with clients are the best way to truly understand what they need and want. Hence, the heavy travel schedules.
But the travel is worth it, the partners say, because it helps them do a better job. "I think we make better investment decisions because we understand the totality of our clients' financial situation," says David Lees, 50, myCIO's senior partner. "Our clients see us as experts in investment advice, but we have backgrounds in tax and estate planning."
As Bracaglia describes it, meeting clients in person allows the firm to make investment decisions that go beyond just the numbers. "As much as people try to make this a science, it's really an art."
Creating a new advisory business is never easy, but it didn't hurt that Lees and Biles brought over an impressive A-list of corporate executive clients. And Bracaglia bolstered the roster with his own lineup of high-net-worth clients, as well as his 401(k) business.
The firm has about 490 clients across a range of categories, with recent total assets under management and assets under advisement of $6.1 billion. Lees says roughly 15% of myCIO's revenue comes from corporations that hire the firm to provide investment advice and financial planning services to top executives. "It's supplied to them as an executive benefit," he says.