I ran the Global Private Banking business of Bankers Trust for most of the 1990’s. At the time, I was quite dogmatic about NOT using my own operation as my money manager. It just seemed too close for comfort given that my personal financial information would be in a system that was accessible by many of the people that worked for me. But when I left that job at the end of the Millennium, I felt quite the opposite and had my team at Bankers Trust Private Banking manage my investments for me. I was off running the institutional investment management area of Deutsche Bank at the time and happy to be doing business there with people that I knew quite well. To be honest, I’ve never been terribly discerning in who and how my money gets managed, which is pretty funny given the business I was in. The old fashioned approach was that service was the determining factor and that still worked well for me. Therefore, I cared more about knowing my team and feeling close to my team rather than any specific performance criteria.
The foundation for that feeling was that I’ve always considered myself more of an earned income kinda guy rather than an investor who made his money from his money. Unusual for someone who’s way of making money was managing a business that helped people make money from their money. But that’s where my head was and therefore, so long as my needs were being well serviced (which they always were), I was happy with my team of managers. So, after a few years after I left Deutsche Bank, my guy there decided to leave to join another private banking operation. As it turned out, it was a boutique private bank that was well known for its high-touch client service approach. The important thing with wealth managers who move shops is for them to take as much of their book of business with them as possible, so I agreed to let my money follow my manager. It’s always a bit of a hassle switching, but I figured that the relationship was worth it, so I went ahead. I was happily handled by that team and in that shop for many years until a few years ago when that bank ran into a problem that got them sold to a much larger bank. It so happened that I had accounts at the larger bank anyway and was quite familiar with them, so it was fairly easy for me to agree to have my accounts transition with them. In fact, since there was no potion that time to keep the accounts where they were, it was going to be a transition for me one way or the other, so I made the move.
The new bigger bank has been more persnickety about certain things that were easier and less dogmatic at the boutique firm I had enjoyed being with before, but I was able to muddle through. Some strange things fell out or almost fell out of bed nevertheless. For example, a venture capital investment I own could no longer be held by them, so it has been shipped off to a specialty alternative investment manager that specializes in that. Also, several accounts that I set up for my life insurance trust, where my sister was the trustee, were less able to be linked to my account during the transition and I was told that I had to do some special things to keep them from escheting to the state by default. That too I got sorted out, but not without some extra effort, something that would never have happened at the boutique bank. In any case, I have settled in to my new routine with the big bank and have adjusted to their procedures and app access drill. It is a bit more online and automated that the boutique, but it all seems to work just fine.
I suspected all along that my guys would never be comfortable in the big bank environment and, sure enough, they have not been. They went out, as happens more often than not these days, and found themselves a new home at another bank that can best be characterized as big, but not as big. It’s not a boutique, but its not so big that they would not feel comfortable being cogs in the big machine. That transition is happening today and I have agreed to make the switch again. This time it is a bit stranger for me for several reasons. To start with, for almost fifteen years, the boss at the big bank for the area that handled my business was a guy who worked for me, both at Bankers Trust and then at Bear Stearns. In fact, he was a very good friend and while I never tried to leverage that or even bring any attention to it, I did feel some obligation to leave my business there. And then that friend died quite unexpectedly (and young, by today’s standards). He was succeeded in that top job role by one of his protégés that had also worked for me at Bear Stearns. So now, a guy several layers below me (a good guy, but a fairly junior guy back in the day) is running the business that I am choosing to leave. It’s a big enough business that I am hoping that my name does not catch his attention on some list that crosses his desk. I’m sure he would just let it pass if it did, but there is something that feels disloyal about that, so I hope he never sees it. I don’t interact with him and haven’t for more than fifteen years, but I do see him occasionally on LinkedIn, so I hope it stays off his screen.
The other pain in the butt is that the new firm does not have a bank branch network and traditional checking accounts, so I will keep my checking accounts at the big bank and just keep a cash management account at the new firm. I also have a mortgage at the big bank that stems from one granted to me by the boutique firm about a dozen years ago when I bought this hilltop. It’s paying down, but I have seen no reason to pay it off for tax and other reasons. Therefore, I will be departing and leaving behind several accounts including those checking and mortgage accounts. Back when I left Deutsche Bank, they kept several trust accounts because trust accounts almost never move around…mostly because they are so hard to force a Banks’s hand to relinquish. That means my accounts are getting spread around the financial landscape. I feel like a slug leaving a trail across the landscape.
I probably don’t really need a money manager any more, though I am not sure of that. I have become a strong believer in passive (indexing) management, so I suspect I could have my business effectively self-managed at someplace like Schwab or Ameritrade. I don’t need sophisticated private banking services, but during times of extreme volatility like now, I am perhaps somewhat comforted that my guys are watching my back for me. My egalitarian ways make me feel guilty that I have a private banker, which is especially funny since I used to run a big private bank. So, I will just leave things with my guy and trust that his working life will last longer than my life and that this will be my last move. I did take the time to ask him in a humble manner if my account was still something he wanted to manage, given that it is a new world out there and lots of people have lots more money than I do. He was quite gracious and reminded me that he viewed me as his mentor and that I had always generously acted as a reference and even brought other business in for him, so that as long as I needed someone to manage my money he would always stand ready to do so. I could have taken that as an embarrassment of aging or dwindling importance, but instead chose to take that as a good sense that if you treat people well, they will treat you well. So, this last shuffling of the deck will once again leave me in the hands of a trusted advisor and friend…as it should.