Luxury Institute News

NEW YORK, April 20 (Reuters) - Tiny Boston Private Bank & Trust topped bigger and better-known wealth managers as best financial adviser for the wealthiest investors, according to a survey released on Tuesday by The Luxury Institute.

Two New York-based advisory firms followed the Boston firm: Bernstein Global Wealth Management, part of AllianceBernstein Holding LP (AB.N) and Rockefeller Wealth Management, a firm that started as the oil baron’s family money manager.

William Oberlies, senior financial officer of the investment group at Boston Private Bank, said their small size gives them an advantage over bigger firms.

“We’re able to give our clients direct access to their portfolio manager, the person actually making the investment decisions,” he said. “At bigger shops you usually have to deal with a middle person.”

The survey asked 505 investors with at least $5 million in net worth to rate wealth managers based on quality of service, exclusivity, the social status they bestow on their clients and other factors.

The survey also asked investors whether it was worth paying higher fees and whether they would recommend the firm to friends and family.

Boston Private, a unit of Boston Private Financial Holdings (BPFH.O), has 14 advisers and over $2.6 billion in banking assets and assets under management, according to Oberlies.

Respondents were only allowed to rate firms they were familiar with, which in Boston Private’s case was 30 people.

The highest-ranking nationwide firm was U.S. Trust, the private banking unit of Bank of America Corp (BAC.N), which finished in 16th place. Wells Fargo Wealth Management Group, a division of Wells Fargo & Co (WFC.N), came in 19th place.

Bessemer Trust, last year’s top placed firm, fell to 12th place. Wealth management firms need to do a better job of explaining why wealthy people should invest with them, said Milton Pedraza, chief executive of The Luxury Institute, a New York-based research firm.

“Wealthy people are fickle,” he said.

http://www.reuters.com/article/idUSN2013040220100420?type=marketsNews

By Hilary Johnson
Investment News

Boston Private Bank & Trust has knocked Bessemer Trust Co. off its perch in a survey of wealthy consumers that asked them to rate which wealth management firm had the most cachet in their social circles.

Bessemer fell to 12th place on the Luxury Institute LLC’s annual survey of top wealth management firms, marking the first time in the survey’s five years that the firm has not ranked in the top three, according to Luxury Institute chief executive Milton Pedraza.

Bernstein Global Wealth Management, a unit of AllianceBernstein LP, ranked second this year, and Rockefeller & Co. Inc. ranked third, appearing on the Luxury Institute’s list for the very first time.

Thirty-four wealth management firms on the list, which is determined by asking consumers whether firms offered superior service, enhanced their social status, were unique and exclusive, and made them feel “special.” The list this year included trust companies, private banks and the high-end wealth operations of other financial services providers.

Some important wealth management players weren’t even in the running. GenSpring Family Offices, the largest registered investment adviser, did not appear on the list of 34, for example, because not enough survey respondents recognized its name.

The lowest-ranked firms included Charles Schwab & Co. Inc., Bank of America Corp., and Ameriprise Financial Inc., though BofA’s U.S. Trust division scored higher than its parent.

The churn among the top names in the survey is likely less a product of the firms’ performance and more the vagaries of consumer perception, and a crowded wealth management field, Mr. Pedraza said.

“Consumers are fickle, and especially in categories where there’s not a high level of differentiation, like wealth management, things bounce around a bit,” Mr. Pedraza said. “Life is messy, and we don’t have all the explanations for why consumers respond the way they do.”

The Luxury Institute surveyed 505 wealthy consumers online last month. Respondents live across the U.S., earn at least $200,000 a year and have a minimum net worth of $5 million.

The Institute, using its proprietary Luxury Brand Status Index, asked various questions to elicit respondents’ views of firms’ quality, exclusivity, clientele and customer service.

To reach its number one spot, Boston Private ranked highest across all questions, although other firms received higher marks in individual categories. Bernstein, for example, was considered most worthy of premium fees.

And even though Bessemer was no longer at the top, it still received high marks for being “unique and exclusive,” the Luxury Institute noted. A spokesman for Bessemer was not available for comment.

http://www.investmentnews.com/article/20100420/FREE/100429987/-1/INDaily01