When Carl Tiedemann’s grandfather, an executive for American Tobacco, died in 1932, he left his family $100,000 in a trust. By the time Carl inherited the estate in 1972, the assets had been maturing in a bank for 40 years, enough time to have grown and matured into a small fortune. The trust’s worth instead? Still $100,000.

Tiedemann was working on Wall Street at that point, and for about 20 years he had been trying to force the corporate trustee to invest the money in common equities and to be less restrictive with it in general. Until then, most of it had been invested in deferred equities or preferred stock.

“He had a very personal and very frustrating experience with how the traditional trust structure managed assets,” says Carl’s son, Michael Tiedemann.

Carl’s own father, who had a horse blanket business in Cleveland during the Great Depression, died in a tragic accident when Carl was just 3. His mother moved the family from Ohio to New Jersey and married a war hero. The family lived far more modestly than it had when Carl’s father had been alive, but his stepfather, who had driven an ambulance during World War I and had been involved in several rescue missions, would regale Carl with stories of war and heroism, and Carl was determined to work hard and become successful, says Michael Tiedemann. He saw Wall Street as his path to doing that.

He started a small broker-dealer called Stone Webster. In 1962, he joined the brokerage Donaldson, Lufkin & Jenrette and became its sixth partner. He rose through the ranks and eventually became its president in 1975. When he left the firm in 1980, he founded one of the first hedge funds, TIG LLC, when Julian Robertson was starting his first fund.

“He was always a visionary,” says Michael Tiedemann, 44. “He will look at what is needed in an industry and see there’s a real need for it and talk to people to confirm that [thesis], and then he’ll take the entrepreneurial risk to make it happen.”

Which is how Carl came to start Tiedemann Wealth Management in 1999. Well into his 70s, he still saw the need for a trust company free of conflicts of interest—one that did not have any proprietary mutual funds or in-house inventories of stocks or bonds, a firm that did not make commissions on the products it sold to clients. He started a firm that would instead hire outside money managers, the best for every asset class, and essentially sit on the same side of the table as the clients—in some of the very same investments.

“Back then, the term ‘open architecture’ was not an embraced term or business model,” Michael says. “Today it is. And it’s the model most wealthy families are seeking, and most businesses that start up use that as their investment platform.”

Carl, who is now 89, also wanted to ensure that any client who took on his firm could fire it just as easily. In the past, beneficiaries had no power to remove a trustee—something he knew only too well because his family’s trust had gone from one bank to another as the institutions were bought and sold. The family was unable to take its money elsewhere.

“He felt as if the assets had just been orphaned, and they had no incentive to perform,” Michael says.

When he started the firm, Carl brought in Michael, now 44, who had been working in emerging markets through much of the 1990s at Banco Garantia, a Brazilian bank. Michael says that while his friends were enjoying the tech bubble in the U.S., he was getting an education in rolling devaluations, first in Mexico, then in Asia and Russia and eventually in Brazil. 

“I grew up learning how to invest in wildly volatile markets,” he says.

The firm eventually brought in Craig Smith, a trust and estate lawyer-turned-wealth advisor who ran J.P. Morgan’s trust, estate and transfer tax planning services for the New England region. Carl has since retired, and Smith, 52, is now president.

Tiedemann Wealth Management has since its founding grown to 55 employees, 14 of them partners. It has about 140 clients, each with some $60 million to $70 million in investable assets. In total, the firm has $9.5 billion in assets under advisement.

The firm boasts a sterling investment committee roster with executives from such firms as Goldman Sachs, Warburg Pincus, J.P. Morgan Chase and State Street Bank and Trust. But Michael Tiedemann also boasts about his firm’s deep bench of fiduciary tax experts and estate planning lawyers. After witnessing all of the consolidation in wealth management in the late 1990s, where service, even at well-respected firms like J.P. Morgan, suffered as banks merged and sought to improve margins, Tiedemann’s founders wanted to offer something different.

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