But whether it’s feasible to bring a boutique manager onto a firm’s investment platform is a function of that firm’s size. If it has too many large clients, their assets could drown the boutique manager and wreak havoc with its investment strategy. “We’re good-sized, but we’re not a mega-firm,” Donabedian says, “and we think that’s an advantage because it lets us bring boutique managers onto our platform.”
Deep Pockets Arrive
Lastly, Atlantic Trust wanted new ownership that would invest in it, especially in the areas of technology and personnel. Employees are an integral part of the firm’s precious cultural fabric, according to Markwalter.
“Our people are the most important aspect of our business, so we invest in career development and training and give them opportunities to take on more responsibility, authority and reward over time,” he says. “If you have professionals who are willing to run through walls on behalf of the client and they know they have career upside, they will stay with you because they feel engaged, they feel passionate and they feel committed to the vision of what we want to accomplish.”
The proof is that quite a few folks from all three legacy organizations remain with Atlantic Trust after all these years, including Donabedian, a Pell Rudman alum.
Investing in Atlantic Trust was something CIBC talked about before the acquisition and the bank has delivered, Markwalter reports. In fact, he says that support is the only real change in the CIBC-era.
“We have everything we had before, but now we have a great deal more resources. We really believe that coming together with CIBC is going to allow us to take our business to the next level,” he says.
The Canadian parent is happy so far, too. “Atlantic Trust’s cashflows have been very, very strong and probably have exceeded our expectations,” Geist says.
Indeed, 2015 was a year of record net inflows from clients, as they collectively added $1.98 billion more to their portfolios than they withdrew. “We think Atlantic Trust has a great growth trajectory,” Geist adds.
Readers may wonder whether this well-backed, disciplined, high-caliber competitor is marching toward them. Could be.
“Our strategy is not to be on every street corner,” Markwalter says. “Our strategy is to be the dominant wealth management player in each of the top 10 U.S. wealth markets. We’re most of the way there.” The firm’s next target is Dallas.
To penetrate a market, Atlantic Trust hits town. Its professionals sit on philanthropic boards and, as a result, they get to know key players in the community. Forming and solidifying collegial relationships with local professionals is essential.
“In order to gain referrals from intermediaries like attorneys, CPAs and financial-services professionals, you’ve got to communicate to those professionals your best thinking through white papers, and you’ve got to communicate to them your investment performance. Then you have to get out and meet those professionals. Last year, we hosted over 60 events around the country,” Markwalter says.
Some events are primarily geared to practitioners the firm has clients in common with or would like to have. Others feature topics of interest to clients and their attorneys and accountants, such as seminars on cyber-security and the outlook for oil.
Providing practitioners with intellectual content and insight through publications and presentations generates referrals. “Now add to that referrals from satisfied clients and what happens is the business grows. We get referrals on a daily basis. The secret, if there is a secret, is to do the highest-quality job possible,” Markwalter says.
Yet growth presents the firm with its greatest test, namely, maintaining its clients-first culture. Bringing the right people on board to begin with can help to a certain extent. “We have to make sure new team members truly believe that the clients are at the center of all we do and that we put the client’s interest not just in line with our interests, but above our interests,” Markwalter says.
There’s more to keeping the culture intact than that, though. About 25% of the workforce has joined the firm within the last two years. “So it’s important for the culture carriers—the people who have built the firm—to spend time with this new generation so that they know what Atlantic Trust’s values are and can keep the culture going,” Markwalter says.
From one perspective, the saga of Atlantic Trust reads like a set of banal textbook axioms. Satisfy clients with top-quality work to get repeat business and referrals. Empower staff. Know what you want in a business partner. Leverage professional relationships.
But it doesn’t take a lot of reading between the lines to see that strategy and the ability to execute it the way that Atlantic Trust has are not one and the same.
“There are only a handful of big things you have to do to be successful as a wealth management firm,” Markwalter concedes. “But what ties those things together and brings them to bear is the culture. The culture is the magic, the pixie dust, the special sauce that makes it all work. As we grow and expand around the country, our biggest challenge is making sure that we preserve our Atlantic Trust culture.”