Altium Wealth Management’s New Spin on “Office Environment”

The first thing you see inside Altium Wealth Management in Purchase is a sizable kitchen outfitted with sparkling appliances and newfangled coffee machines, which visitors are promptly invited to use. A fancy coffee kitchen as the centerpiece of an office in a gleaming Westchester tower? Doesn’t feel like an institution that deals in weighty financial matters, but that’s just the way the Altium partners want it.

They’d rather it feel like an old friend’s place, where a drop-in visit starts with a trip to the kitchen for a fresh cup of coffee. And then comes the talk.

“There’s an intentional design to the way the office flows, and the way the reception area is, that’s different from most other financial firms,” says Anthony DeStefano, one of four partners.

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Altium, as its name declares, is a wealth-management company, one in a fairly new industry catering to the financial needs of wealthy and sometimes super-wealthy clients.

“The best way to understand wealth management is that it is the cross-selling of services and financial products,” wrote Russ Alan Prince and Arthur A. Bavelas in National Underwriter Life & Health magazine in 2002.

What that means, in the best case, is that every aspect of a client’s financial picture is weighed and considered together, from life insurance, wills, and bank accounts to investments, taxes, and 529 college funds.

Altium aims to set itself apart from Goldman Sachs, JPMorgan, and other companies that offer wealth-management services with a fresh take on every part of running a modern, efficient business and the relationship with clients, starting with that cup of coffee.

None of the four partners has an office or a desktop computer. Instead, each carries a laptop computer and a mobile phone and sets up in whatever conference room, or even office site, that makes most sense for the moment. (The company maintains offices in Purchase and Paramus, New Jersey). Documents are scanned, stored, and distributed electronically. That mobility, they say, keeps them nimble and free from the weight of in- and out-boxes piled high with paper.

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The result, according to the Altium Gospel, is an ability to serve a much broader range of clients than just the super-rich, who once were the only class who could afford wealth consultants.

“Many of our clients are people who are so busy building their businesses and building their wealth that they spend very little time managing and protecting it,” says partner Jim Giangrande.

Once upon a time, the managing and protecting was available only to the super-rich—Rockefeller and Vanderbilt rich. A team of dedicated accountants, lawyers, and bankers would be employed exclusively to manage every aspect of a single family’s affairs. Collectively, they became known as the “family office,” a term still used in the wealth-management field and still available mostly to the very rich. But many families this side of Kykuit have need of financial management, too.

And that’s where companies like Altium come into play, providing family-office services to clients with a net worth of as little as $1 million or $2 million to as much as $100 million or more.

The partners attribute their success at broadening of the client base to a combination of the kind of innovation that did away with offices for the partners, as well as a team approach that pairs the most appropriately equipped person in the company with a client’s needs.

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To determine those needs, the partners employ what they describe as “a very deliberate process” that starts with an in-depth talk with the client to figure out financial goals, which are infinitely variable depending on the client’s age, health, net worth, and so on. A client in his 40s with a net worth of $2 million will have far different needs and goals than one in his 60s with the same worth.

But it isn’t just about net worth or about investing or savings or earnings. It is factoring every aspect of a client’s financial picture together into one strategic plan, a relatively new concept.

 

“Ten years ago, our industry effectively did not exist,” wrote editor Jean Brunel in the Winter 2008 issue of the Journal of Wealth Management. “Wealthy individuals were served by providers who did their best but, practically speaking, were not offering the right services, in large measure because they did not fully understand the true nature of their clients’ needs.”

Before they came together three years ago to form Altium, the partners worked as those unconnected practitioners, doing their best to be jacks of all trades to clients. But as they collaborated more and more, from as early as 2006, and the notion of forming a business began to take shape, they asked themselves, “What if we built a company that took advantage of each partner’s unique strengths for the better of client and company?”

Thus DeStefano would focus on software and technology for both clients and the company, building an infrastructure that provided clients with a unique yet repeatable experience. Giangrande would develop new clients, work with strategic partners, and recruit employees. Mitch Brill would work on succession planning for business clients and a good amount of client development. Jim Dowling would handle integrated financial planning in all its forms including investments, cash flow and retirement planning, wills and trusts, and insurance.

Financial and other companies are often structured around the acquisition of new business, and partners get credit and get paid based on how much of it they bring in—a lot of score-keeping.

In the Altium model, Giangrande says, profits are split equally according to a system of trust and belief that each partner is applying his unique strengths to the overall success of the company and well-being of clients.

“So we just said, ‘Let’s not keep score of who’s developing business. We all know that we’re strong in different areas. Let’s just take a leap of faith and give up the rest of this stuff and just do what we do best.’

 

“And that’s a hard thing for people to do; it really is,” Giangrande says. “It’s a hard thing to not keep score in partnerships because people often assign different levels of value to different roles. We don’t do that. We understand that we are so much better off being together doing different things than we ever would have been on our own trying to do this. We’re developing many more clients, and a higher level of client, than we ever did as individuals.”

The benefits of Altium’s approach become apparent for clients pretty soon after the trip to the coffee kitchen. A series of meetings lays the groundwork for a working relationship and a sketch of the client’s state of affairs and goals. As the sketch becomes a detailed painting and the client decides to go on with the firm, his or her complete information is entered into a software application, a financial model that will form the linchpin of the continuing relationship.

The partners and other members of the company use the software as a strategic tool to manage the client’s plan and resources, and the client uses it to provide an archive of important documents and a detailed status report of his affairs at any time, being able to log in remotely.

The relentless focus of the discussions and the software and the relationship-building is the effort to answer questions. Does the life insurance plan fit with the kids’ college funding? And do those two things fit with the investments and the will and the tax plan?

Giangrande says clients typically have many and varied advisors: an accountant for taxes, an attorney for wills, an investment advisor, insurance people, and bankers.

“One of the questions we ask them is, ‘When was the last time you had all these advisors in the same room working on your behalf?’ And invariably the answer is, ‘Never.’ And even if they did have several of their advisors together, they might be speaking a different language.”

 

What Altium does, Giangrande says, is to sit in the middle with the client, like a hub in a wheel, and look at all the advisors on the rim of the wheel and the aspects of a client’s financial picture they represent. “Most advisors don’t step in the middle,” he says.

Doing that, DeStefano adds, allows Altium to see how the pieces fit. “The CPA gave good advice, the attorney gave good advice. And the advice may be good by itself but may conflict with other advice,” he says.

“Many advisors just focus on investments,” Giangrande says. “They’re not good at planning. And what really clients are looking for these days is leadership in navigating through all the pieces. The Morgan Stanleys of the world, the Merrill Lynches of the world—they try to do what we do but they’re really not doing it to the extent that we are. For the highest level clientele, maybe they’re doing it, but not for the main-street clients.”

Altium says revenues and earnings have tripled since the company’s founding in October 2010, and assets under management have gone from $70 million to nearly $250 million, although that function represents only a small part of what the company does. Clients, depending on circumstances and needs, pay from $2,000 to $10,000 for the first year of Altium’s services.

Jim Daniels of New Rochelle is one of Altium’s clients. Daniels, 68, is vice president of a local distribution company and employs Altium to manage a wide range of affairs for him, including three investment accounts and life insurance.

“I can’t say enough about how they cross-pollinate with my other people, who have said they like dealing with Altium because they are so professional,” Daniels says.

“One thing I really like about Altium is their ability to listen.” Other advisors, he says, are often so busy with their sales pitch they “barely come up for air.”

At Altium, he says, “they did more listening than I did.”

With his wife, Greg G. Weber runs sour cherryfarm.com, a website whose motto is Eat. Drink. Live.

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