Matthew Celenza says his new independent wealth-management fund that caters to the ultra-affluent is capable of handling $2 billion, twice what he managed at Merrill Lynch Private Banking and Investment Group.
Celenza, 50, who left Merrill Lynch the first week of July, launched his Beverly Hills, Calif.-based firm Boulevard Family Wealth with the help of Dynasty Financial Partners, a New York-based firm that provides trading, marketing and other support services to independent adviser groups. He had been with Merrill Lynch the past six years; the firm confirmed his departure but declined to comment further. Additionally, Shannon McLaughlin and Andrea Shieh, who both worked with Celenza at Merrill Lynch, are joining Celenza at Boulevard Family Wealth.
Celenza began his wealth management career at Morgan Stanley (MS) in 1998, before joining Smith Barney Citigroup in 2001, where he was one of the founding members of the Citi Family Office. (Morgan Stanley and Citigroup (C) reached a deal in 2009 that would merge Morgan Stanley's Global Wealth Management Group with Citi's Smith Barney.) Following his time at Morgan Stanley, Celenza went to Barclays in 2012 for a brief stint, according to the Financial Industry Regulatory Authority's (FINRA) BrokerCheck database. After just three-and-a-half months, Celenza left for Merrill Lynch, although he was ordered by FINRA to repay $5.1 million in signing bonuses to Barclays.
Even though he had "nothing but success" with Wall Street brokerages, often called wirehouses, Celenza said he had contemplated going out on his own for the last decade as he had a desire to run his own business. One of the motivating factors behind Celenza's move was the limiting structure within a wirehouse that dictates what brokers are allowed to do.
"Even though you have a segregated branded group, you fall under the same compliance as the group of the other 15,000 employees," Celenza told TheStreet in an interview.
At a wirehouse, advisers are employees of the firm, and generally, have to use the proprietary products of the firm. And, while advisers do not have to pay overhead costs at a wirehouse, their payout could be more limited.
As a business owner, Celenza has "more control of the dollar" and the ability to implement his own platform for his clients.
"Inevitably there were other needs outside the [wirehouse] firm that the clients needed," Celenza said. "Now, we truly can act as an advisor and look for the best opportunities for the clients."
Aside from Dynasty, Boulevard Family Wealth also partnered with Charles Schwab for custody services; Black Diamond for reporting services; and Callan for institutional investment research (although Celenza noted that his firm will be using other research as well).
All of Celenza's clients at Merrill Lynch followed him to his new firm, he said, and he's looking to scale up. Celenza said his client list is "far from capacity" and he is lowering the minimum asset requirement to $5 million; he noted that at Merrill Lynch he looked for clients with $50 million and up. Celenza also said that "fees are nominal at the end of the day;" adding that he's not really concerned about himself. He didn't say how much his fees are.
Boulevard Family Wealth's particular expertise is working and creating a long-lasting relationship with first generation wealth, those "who have achieved success as entrepreneurs and business owners in real estate, technology, private equity as well as the arts and entertainment fields," the company said in a news release.
Still, even though clients have millions in assets, there are challenges that accompany substantial wealth. Celenza said his firm adds value to specific areas, including family governance as well as privacy and security. Since Boulevard Family Wealth deals mostly with first generation wealth there is sometimes a "struggle with how family members will get involved."
"We look for a client that needs us," Celenza said.
And, more people are looking to registered independent advisers (RIA). According to Boston-based research firm Cerulli Associates, the independent RIA and hybrid RIA channels will grow their total market share of adviser-managed assets to 28.1% in 2020 from 23.3% in 2015.
Kenton Shirk, associate director at Cerulli, said in a 2016 statement that while wirehouses still hold a substantial share of assets, RIAs are the growth story. To this point, Dynasty Financial Partners has helped launch nearly four-dozen independent advisory firms since it was established in 2009. Celenza also echoed that sentiment saying that it "looks and feels that this is the trend for higher net-worth clients."
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