Big wealth often is associated with people who built large public companies, like Warren Buffett and Bill Gates, but one giant advisor to the rich says it may be a mistake for advisors to think that way.
At Northern Trust, a lot of effort has been placed on serving the needs of family-owned-and-operated, closely held businesses—entities that often fly under the radar, yet comprise a larger component of the U.S. wealth engine than many people realize.
“Still, to this day, 75 percent of ultra-high-net-worth wealth in this country has been generated from self-made, private businesses,” said David Blowers, Northern Trust’s president of wealth management national services. “We work with many of those businesses and consider them a huge, huge growth opportunity.”
In recognition of how important that market is, Chicago-based Northern Trust says it has continually placed a great focus on its business consulting practice, going against a trend that has seen many wealth management firms farm out this type of advice to outside consulting entities.
The trust company has done the opposite, Blowers said, by stocking the business unit with professionals of multiple specialties, such as expertise in agriculture and the oil, gas and mineral industries.
In related news, the trust company announced that Robert Ashcroft has been named Northern Trust’s senior vice president and director of business owner consulting. Ashcroft comes from PricewaterhouseCoopers, where he spent 12 years consulting with executives, often on private mergers and acquisitions and other business issues.
Business consulting is naturally a key area for Northern Trust because the company is a trustee for family wealth, and families often view their businesses as their most prized possessions, according to Blowers.
As a trustee, Northern Trust manages more than 1,200 business interests comprising $8 billion of assets. Moreover, it holds the controlling interest in 160 of these businesses. The trust has a team of 18 professionals responsible for overseeing these interests, Blowers said.
In the oil, gas and mineral sector alone, Northern Trust manages 15,000 properties with the help of an in-house staff that includes former industry professionals.
In agriculture, another sector with the involvement of many family-owned businesses, the trust manages nearly 2,000 properties, including 170 farms, 330,000 acres of timberland and over $2 billion worth of commercial and residential real estate.