Much of the financial planning industry struggles with succession plans as the advisor workforce continues to age—but succession planning is old hat for a firm like Bartlett Wealth Management.
As the firm celebrates its 120th anniversary this year, its leadership is reflecting on how it has had to change to remain relevant to its clients and to differentiate itself within an industry that’s grown in size and complexity.
“These days, I don’t think you can say in the mainstream of things that our investment management itself is so distinctive, or that our financial planning process is unique,” says James Hagerty, principal and wealth advisor. “My Monte Carlo simulations are not that much different from the next person’s. In the main, everyone in this profession has similar tool kits. The differences are all about subjective factors like relationships.”
In 1898, Benjamin Bartlett, a partner at a Cincinnati area private investment firm called George Eustis & Co., purchased a seat on the New York Stock Exchange. A new firm, Bartlett & Co., would eventually replace Eustis & Co. When the Investment Advisers Act was passed in 1940, Bartlett was among the first firms to register as an RIA. The legacy continues in Bartlett Wealth Management, which now has 48 employees and more than $4.2 billion in AUM.
For the bulk of Bartlett’s history, the firm was owned by principals working beside other employees, with the exception of a period in which it was owned by Baltimore-based Legg Mason, and with the exception of the current period following the firm’s recent purchase by Focus Financial, earlier this year.
Legg Mason bought Bartlett in 1996 hoping that Bartlett would bring an influx of high-net-worth brokerage clients, while Bartlett would enjoy the back office support offered by its parent firm. However, when Legg Mason sold its brokerage business to Smith Barney in 2005, many of the synergies it shared with Bartlett evaporated.
When she became Bartlett’s first female CEO and president in 2007, Kelley Downing began to look for ways to buy the firm back. “Legg Mason over time became a manufacturer and distributor of mutual funds whereas Bartlett was in the wealth management business,” says Downing. “We were no longer aligned in our visions.”
Bartlett had also moved toward a model of holistic, fee-based wealth management with financial planning, not investment management, as its centerpiece.