Robert C. Elliott
Senior Managing Director, Client Services

Rob Elliott joined Bessemer in 1975 when the company began to accept non-family clients. Since that time, Rob has guided the development of Bessemer's service model, new business initiatives, expansion strategies and service enhancements.

HSG: Rob, what's your responsibility and how does it fit in the world of Bessemer?

RCE: Together with my colleague, Thad Shelly, I oversee client account management, which includes the coordination of all Bessemer's services for our clients. Essentially, the front-end of the engine that is Bessemer.

HSG: What's the secret behind Bessemer's astronomical service ratings?

RCE: Our client account managers have the greatest responsibility for the quality of a client's day-to-day relationship with us. Admittedly, "trusted advisor" may be an overused term, but to us it means a professional who takes the time and effort to understand a family; has the background and intelligence to provide thoughtful, well-informed counsel; and whose interests are totally aligned with the client's. Our clients want a relationship with these dynamics, rather than an account manager who simply acts as a very efficient administrator. Assigning the right account management team to a client is as much art as science, and we put a considerable amount of thought into each decision.

HSG: How are the teams structured?

RCE: Our teams are made up of three or four professionals with varied backgrounds, dedicated to roughly 50 client relationships.

HSG: That's a fairly small number of clients per team, compared to the industry norm.

RCE: An intentionally small number. It allows the account managers to proactively stay in front of the clients, in order to prepare for milestone events, regulatory changes or other issues that will need to be addressed or resolved. They have the time to engage with clients across virtually every aspect of wealth management, from core services such as investments and estate planning to concerns at the other end of the relationship spectrum like selecting a day school or assigning valuations to real estate.

HSG: What are the challenges of achieving this with consistency?

RCE: The securities markets are too unpredictable for any firm to guarantee consistent investment performance, but we can rigorously control many aspects of the service process and the client experience. Much of this has to do with finding and retaining the right account managers and ensuring that they are suitable for a particular client. This is a daily challenge and one of the reasons that industry competition for high-caliber professionals with high-net-worth experience is so fierce.

HSG: So, how does Bessemer measure the satisfaction of its clients?

RCE: The most meaningful indicator of satisfaction is client retention. According to the VIP Forum, the highest tier among our competition enjoyed 95% retention over the past five years. During this same period, Bessemer achieved an average client retention rate of 98%. We also measure success by the number of clients who add significant assets to their Bessemer relationship.

HSG: What does the typical Bessemer Trust client look like?

RCE: We work with a range of clients. Our minimum account size is $10 million, our average relationship is about $27 million, and our average new account last year was approximately $37 million. Of course, we also have clients who have entrusted us with hundreds of millions. Many of our clients are business owners or the current or former CEOs of Fortune 1000 companies.

HSG: What kind of client gets the most from a relationship with Bessemer?

RCE: We can be exceptionally helpful to a family that wants to understand and address the broader issues associated with substantial wealth, and seeks to create a legacy. Bessemer also is right for families that regard their assets as irreplaceable capital, and value a thoughtful, time-tested approach to investment management. It's essential for us to have an effective working relationship with a client's other advisors, especially from the legal and accounting professions. An open mindset is needed to ensure that our combined efforts are functioning as intended. Bessemer is not an especially good fit for most self-directed investors or the person who desires the investment du jour.

HSG: There are no profit centers at Bessemer Trust. How does that benefit your clients?

RCE: This environment, in which all interests are aligned, eliminates the internal tension between departments and allows everyone to work collaboratively. It also allows us to offer bundled pricing and seamlessly expand the services we deliver to a client, based on their needs rather than on a department's bottom line.

HSG: How different is your model from a family office?

RCE: The scope of our capabilities is broader than that of most family offices. However, the real difference is in the breadth of our infrastructure and how we execute. Very few family offices can match our resources or the depth of our staff.

HSG: Can you provide examples of some of the more unique services you provide your clients?

RCE: In the early part of the last century, our employees opened and closed the winter and summer homes of the Phipps family, and helped manage their household staff. These days, services that you might classify as unique are quite different, and often are more event-driven. For example, we will arrange for hurricane shutters to be placed on a client's home by the shore while that client is out of town. Or Bessemer will help find a doctor for a client's child who suddenly requires medical care in a distant city. When you know your clients-and you care about them on a personal level-these services become second nature.

HSG: So clients really perceive you as a "go to" resource, not just the place where their money is managed.

RCE: We want those calls; we want to be the first call a client makes. Obviously the deeper the relationship is, the longer we'll be able to maintain it. When we do more than manage the money of a family, our value becomes more tangible to the client.

HSG: What do you do to help educate the younger generations of your family clients?

RCE: We have a variety of workshops for different age ranges and levels of knowledge. Introductory sessions can be a half-day long and more advanced programs might run two and a half days. Core topics include understanding taxes, estate planning, preparing for the first major financial decision, investment basics, philanthropy, and learning to handle the personal hurdles that can accompany substantial wealth. We also are willing to tailor the curriculum and deliver it on a one-on-one basis.

HSG: What's the goal for education, from the parent's perspective?

RCE: Broadly speaking, it's to help children be financially responsible. But that can take many forms. It might mean equipping them, psychologically and practically, to deal with their inheritance. Another scenario might involve helping adolescent children prepare for a liquidity event, especially the changes that can come with sudden wealth. Why have they suddenly become so popular? Why are classmates asking to borrow money? We provide coping mechanisms and strategies to help children face these challenges.

HSG: Based on the discussions you have with clients, can you characterize the top-of-mind issues for today's affluent families?

RCE: Our clients are squarely focused on ensuring that their children possess the values and perspective to handle wealth responsibly. At what age is it appropriate to talk about wealth? How much is too much? And when should children have access to substantial assets? At the end of the day, our clients have a great interest in their children's emotional well-being and character development.

HSG: Is there any industry consensus on those issues?

RCE: There are some trends worth noting. When I first entered the industry, most trusts were set up to give heirs access to their money when they turned 25 or 30. Now it's closer to 35 or 40, and access to investment capital might be even later. This trend is directly related to the total dollars at play. Giving a 25-year-old control of $2 million is more plausible than giving her control of $20 million. The sheer magnitude of wealth is prompting a more conservative approach.

HSG: How much do you care about what your competitors are doing?

RCE: We want to be aware of what they are doing. We know that a lot of good ideas originate outside of Bessemer, and we want the chance to evaluate new tools and strategies for our clients. We also want to know when and where a competitor is opening new offices because it can affect our presence in a specific community and may result in recruiting efforts aimed at our employee base.

HSG: What about fees? Can aggressive pricing impact your business?

RCE: There's an ongoing debate in our industry about the merits of bundled and unbundled pricing models. Frankly, there are pros and cons to both approaches. It's interesting to know what the competition is doing and whether they're having any success with unbundled fee schedules. Bessemer's clients appear to be satisfied with a bundled model, which gives them easy access to the things they need.

HSG: Firms calling themselves wealth managers and private wealth advisors are cropping up every day. How do you continue to differentiate yourself?

RCE: That's an important question for our industry, because there is a large number of boutique multi-family offices, brokers, financial advisors, CPAs and others who represent themselves as full-service wealth managers. However, it takes more than a glossy brochure or a well-conceived Web site to be a comprehensive wealth manager. The key is to be an effective advisor across all of the major wealth management components, which can be a challenge for firms of any size. Here's an interesting case: The West Coast clientele of one of our large competitors has to book estate planning appointments three months in advance. The firm offers estate planning because clients expect it, but whether management is willing to commit greater resources to this area or actually believes in its worth is open to debate. If a Bessemer client wants to review an estate plan or a new tax strategy, we'll put six people around a table in a matter of days. That's how we've operated for 100 years.