A blue-ribbon team of old guard brokerage executives have set out to build a private bank delivering something they say is hard to find on Wall Street: personal service and no conflicts. Fieldpoint Private Bank & Trust is a two-year-old company with just one Greenwich, Connecticut, office and 30 employees, yet its founding 31 shareholders include many former titans of Wall Street.
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Former Merrill Lynch honchos David Komansky, John "Launny" Steffens and Daniel Tully, as well as former PaineWebber head Joe Grano, Invemed Associates' Kenneth Langone and KKR co-founder Jerome Kohlberg, are among a group of millionaires betting they can build a better bank.
"We thought there was a really good business opportunity. A lot of our friends were unhappy with the impersonal service they were getting," said Daniel Donahue, Fieldpoint's chairman and a former Merrill brokerage executive. Four years ago, Donahue and Tully began to round up partners from among a circle of friends who also happened to be very wealthy entrepreneurs and businessmen. Since opening its doors in April 2008 with $45 million, the bank has grown to $385 million in assets.
Fieldpoint now intends to expand its presence across the United States, seeking out wealthy families who want high-touch, comprehensive financial advice and banking. "Everybody craves best-in-class advice and wants a remarkable experience, but excellence doesn't come with size and scale," said Robert Matthews, a 25-year Citigroup and Smith Barney executive named Fieldpoint CEO last week. "There's a reason there are only a few Navy SEALs."
Merrill Lynch and US Trust are now minor departments within Bank of America. Behemoths like J.P. Morgan Chase, Wells Fargo, Morgan Stanley Smith Barney and UBS have snapped up numerous small firms to create industry giants. At the same time, dozens of "boutiques" and independent advisory firms have sprung up to attract families and advisers uncomfortable working with big institutions, a trend that accelerated following the 2008 financial crisis.
"There's a great deal of unhappiness in large institutions. It must be hard to work at a place that did subprime lending or sold derivatives that blew up," Donahue said. Fieldpoint expects to soon open its first New York City office, followed by branches in Florida and other wealth centers like Washington, D.C., Boston and San Francisco. In the near term, the bank could grow to about 12 offices, though the pace and location of Fieldpoint's expansion depends on finding the right advisers and bankers.
Donahue and Matthews said Fieldpoint also is considering acquiring like-minded firms, though the field of appropriate merger partners is small. Within five to six years, Fieldpoint will probably sell shares to the public through an IPO. "We want to have a public offering down the road, to provide liquidity to our founders," Donohue said. "We don't want to merge into a giant institution. That would defeat what we're all about."
The Fieldpoint story resembles those of rivals like Boston Private Financial Holdings and First Republic Bank, which recently separated from Merrill Lynch, or expansion-minded advisory boutiques like Silvercrest Asset Management and Evercore Wealth Management.
In time these firms hope to close the gap on leaders such as US Trust, though Matthews dismissed size and scale as priorities. "It's not important to be massive or to place high in the rankings," he said. "We want to be as big as we can be without sacrificing the customer experience. Some firms had that opportunity and they blew it along the way."
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