In 2011, Martha Pomerantz and four other female veterans left what is now Abbot Downing, Wells Fargo’s investment and trust business for families with assets of $50 million-plus, to open the local office of Evercore Wealth Management.
Q: Please explain what you do.
A: I am the co-manager of the Minneapolis office of Evercore Wealth Management. I work with clients on customized portfolio strategies. I am a member of the firm’s strategic planning committee and a member of the firm’s investment decisionmaking body. At Evercore … each family works with two seasoned professionals — a portfolio manager and a wealth adviser who collaborates with our clients’ other advisers such as attorneys and accountants to spearhead discussions on estate planning, tax planning, charitable and family gifting, and education for family members. In addition, we have we have trust powers and can act as trustee.
Q: How did you become an owner of the Minneapolis office?
A: When we decided to make a transition to a new firm, we specifically looked for a national firm that would give us capital to open an office in Minneapolis. We took pay cuts and invested to open the Minneapolis office of Evercore. We own less than 50 percent and Evercore owns the rest. We felt real ownership was a necessity to ensure we had a say in the way we delivered service to our clients. We strongly believe a team of two professionals for each client family provides a higher service level and the proof in that model is the exceptionally low turnover we have among our client base.
Q: Why Evercore and how is being an owner different from being an employee of an investment-and-trust business?
A: Evercore is a national firm with $5.7 billion of assets under management across offices in New York, Minneapolis, San Francisco, Los Angeles and Tampa, Fla. We have deep resources with 24 portfolio managers on the investment committee and a team of wealth advisers. The firm was started in 2008 so clients could continue to work with an independent firm, free from the bureaucracy of a large financial institution.
We feel we are on the same side of the table as our clients. To the extent our clients make money and are happy with our service, we will be rewarded as well. We have the luxury of making our own decisions about how we want to service our clients and are not beholden to a cookie cutter, save-expenses approach, more common in big bureaucracies.
Q: How do you get paid and how is Evercore’s composite-portfolio performance?
A: We charge a fee on assets that [decreases] as the size of the portfolio under management increases. We charge 1 percent annually on the first $10 million in assets. We do not charge any additional fees. Most of the assets can be managed in-house with a single fee. When we use outside funds that have additional embedded fees, we are upfront about those costs. Those outside funds are a relatively small part of the portfolio.
Eighty five percent of all active managers in our industry underperformed the S&P 500 in 2014. We are among a small group who outperformed. When our core equity strategy is compared to Morningstar’s large-cap blend mutual funds, we ranked in the top 5 percent in 2014 and the top 20 percent over five years.
Q: Who are your clients?
A: We serve 45 families and we have about $650 million under management. Our sweet spot is families of about $5 million to $50 million in wealth. Families and individuals who have accumulated wealth over time. Entrepreneurs, business owners, senior executives or some who acquired wealth through a death, a divorce or an inheritance. Many families have enough assets for day-to-day living and are very interested in advanced estate planning techniques including thoughtful ways to gift to family members and/or charities.
We develop a portfolio strategy that is customized to each client’s particular situation and each pool of assets. We work alongside our client’s … accountants and attorneys to make progress implementing estate planning and tax planning strategies, as well as gifting to children and to charities. We are also adept at knowing how to communicate complicated financial topics to any member of the family, regardless of age or depth of understanding of the financial world.
Q: How are the rich different from the rest of us?
A: Wealthy families face real-world problems just like you and me. Money does not buy happiness. But wealthy families have additional resources that may help to ease a challenging situation. Parents work really hard to instill good values in their children. They want their children to work hard and give back.