Anthony DeChellis makes a stop at New York University's campus one early September morning to check in on an event for Credit Suisse's ultra-high-net-worth clients before making his way to his Manhattan office, where he serves as chief executive officer of Private Banking Americas at the firm.
The event is Credit Suisse's second collaboration with New York University's Heyman Center for Philanthropy and Fundraising to educate its clients in the best practices in philanthropy and give them the opportunity to interact with their peers.
The two-day Credit Suisse Philanthropy Campus, as it is called, rounds up high profile experts on all aspects of charitable giving. Some of the speakers include Naomi Levine, founder and executive director of NYU's Heyman Center, who has helped raise more than $1 billion for the university; Jacqueline Novogratz, CEO and founder of Acumen Fund, which has invested more than $75 million in companies providing affordable energy, health care, housing and water in Africa and Asia; and Mark Shriver, leader of U.S. programs for Save the Children and son of Peace Corps founder Sargent Shriver and Special Olympics creator Eunice Kennedy Shriver.
At the opening dinner to kick off the event the night before, DeChellis says one client asked him, "'Why do you put so much effort into doing this?'" He said: "I explained to her that we see this as our role and our job."
The event is just one example of how Credit Suisse is anticipating the needs of their clients, according to DeChellis, whether it be the education of their children, helping them make new business connections or delving into their interests like antique cars.
"A client wants to know that you get them, that you understand who they are, can anticipate things before that need even pops into their mind, and you can anticipate for them challenges they will likely face, opportunities they should be thinking about," DeChellis says. "Because we're geniuses? No. It's because we're very experienced in dealing with people and families like theirs."
Credit Suisse's experience in dealing with wealthy families dates back nearly 156 years. The firm's private banking in the Americas has seen some significant changes since DeChellis took the helm in 2006. It was then that the firm first created the Americas region that stretches from Argentina to Canada. Credit Suisse then set out to carve a defined wealth management business that evolved toward a private bank model from the investment bank. And then luck kicked in. The financial crisis that hit many financial firms hard brought a host of new talent looking to join Credit Suisse's U.S. private banking ranks. DeChellis estimates that the firm hired 150 people in 2008 alone.
For wealth management firms with thousands of advisors, that might not sound like a significant number. But for Credit Suisse, which now has approximately 430 U.S. advisors, who the firm calls relationship managers, those hires have helped push the business to double its size in assets in the U.S. That figure has grown to approximately $99.23 billion, up from about $45 billion in 2006. The Americas business, including Latin America and Canada, now stands at $170 billion in assets, up from $80 billion in 2006.
The firm plans to continue that growth, setting its sights on doubling the assets under management of the U.S. private banking business in the next six years, and expanding its relationship manager force to between 550 and 700.
That all comes as DeChellis strives for the firm's private banking Americas business to be seen in two ways: the best place for the best wealth managers to work and the most user-friendly for its clients and advisors.
"Because of our size, we manage $1 trillion in assets, it's tens of thousands of clients, not tens of millions of clients," DeChellis says in an interview from his office in midtown Manhattan. "It allows us to be very nimble in serving clients so that we are the best at making our firm accessible."
The floor of Credit Suisse's Manhattan office is a testament to the rapid growth it has seen in the U.S. in recent years. Spread over two and a half acres, the space is awaiting a renovation to match the redesign of all the other U.S. private banking offices that have undergone a face lift to give the firm a more wealth managementnot brokeragepresence. The delay for the New York office is because of its size, says DeChellis, who estimates that it is one of the largest offices in Manhattan by revenue.
Part of that culture that Credit Suisse is striving for is evident with the relationship manager title the firm favors for its advisors. That title is meant to indicate the various departmentsasset management, investment bank and other specialiststhat an advisor can connect their clients with, and how they can serve as the one entry point to the entire firm, DeChellis says.
His visit to the philanthropy campus this September morning is just one example of the hands-on approach he takes to all aspects of his job, according to those who work closely with him. "Tony's been a really wonderful ally," says Jonathan Torop, who joined Credit Suisse's wealth management force in January 2009 from Goldman Sachs. Torop credits DeChellis with helping to smooth his transition by meeting with a number of his clients.
DeChellis' path to Credit Suisse admittedly was not a direct one. He spent the bulk of his now 27-year career at Merrill Lynch, where he started out as an advisor serving corporate executives and entrepreneurs. It was there that he developed a taste for the ultra-high-net-worth niche, where the clients were both interesting and could rapidly grow his business.
He then went on to serve in a more managerial role at Merrill, where he gained exposure to the private banking side of the business. That included a stint leading the southern European division of the private bank from Milan, and then ultimately heading the entire private bank in Europe out of London. That business included only about 16 offices in major European cities. But its high-net-worth and ultra-high-net-worth clients had five times the average account size versus the firm's U.S. clients, DeChellis says. From there, DeChellis went on to serve at Merrill Lynch's Private Banking and Investment Group in the U.S. until a change in management prompted his departure.
And while DeChellis then opted to join UBS in September 2003 to build a private wealth business alongside a Paine Webber franchise the firm had purchased, he never forgot conversations he also had with Credit Suisse around that same time. Three years later, in 2006, he moved to Credit Suisse. "In retrospect, this was a pure play for the ultra-high-net-worth business, so I changed my decision and came here," DeChellis says. "Things have worked out for a reason. Ultimately, I found the right spot."
Now 50-years-old, DeChellis takes a direct role in encouraging financial advisor prospects to move to Credit Suisse as part of his goal to attract the best talent to the firm. That includes advisors like Torop, who says the financial crisis inspired him to look for a safer haven for both his clients and himself. Like DeChellis, Torop's positive impression of Credit Suisse began long before he formally signed on to work for the firm in New York.
Torop recalls how he ran up against Credit Suisse in his very first pitch as a financial advisor at Goldman Sachs in 1999 and lost. That prospective client, a CEO, ultimately went with Credit Suisse after that firm pulled several of its top executives into their pitch meetings. "I always thought about it as a competitor, and a strong competitor," Torop says of his view of Credit Suisse from the outside during his nearly 10-year run at Goldman Sachs. "But until I really started doing my due diligence in the fall of 2008, did I really look under the hood and realize how I could harness the place to expand my business."
Torop's due diligence included searching for a firm where private banking was a top priority and had a global footprint broad enough to improve the traction he was getting with his clients. Today, Torop says he has seen results, having doubled the revenue of his business from his best year at Goldman Sachs. Torop currently manages approximately $800 million in assets on behalf of about 24 family clients. He credits a group named Solution Partners, which is comprised of investment bankers operating within the private bank, with also helping to boost his business. Those bankers assist ultra-high-net-worth clients with transactions that are too small for the firm's investment bank, which for Torop has included talks with his entrepreneur clients about the future of their businesses.
"It's frankly resulted in winning a lot of business, a lot of new assets at the firm," Torop says. "It's been very exciting for me and for my colleagues who I collaborate with to see that we're able to go head to head with the competition and win business and develop close ties with new significant entrepreneurs." And to see how he has grown his business, Torop says he just looks around the floor of the New York office, where he can point to various executives who have personally come to client meetings anywhere from New York to Texas to London. That includes DeChellis, who Torop says genuinely enjoys interacting with clients.
"He'll meet the client, and I'll talk with him a week later and he'll ask for an update and he'll reach out again to the person," Torop says. "The clients feel special because I don't think that many firms have Tony's equivalent reaching out to [them]."
Many of the hires who joined Credit Suisse during the crisis came from Lehman Brothers, where the firm hired roughly 62 advisors, plus their staff, for a combined total more than 130, right after the firm's collapse. Credit Suisse also engaged in talks with about 40 Bear Stearns advisors earlier that same year, but hired just four. And the firm also saw a spike in interest from advisors at other high profile firms who were attracted to Credit Suisse's unusually strong capital position at that time, DeChellis remembers.
"We literally received phone calls from managers who wanted to bring their whole office," DeChellis says. "If I was just a numbers-focused person, I could have easily gone out and said, 'We're at 1,000 now.' I could have hired 1,000 advisors like that in 2008. But we said, 'No, you know what? We're going to stay true to what we believe. We're going to hire the best folks, because the minute you start hiring just anybody, you will lose your ability to hire the top tier folks.'"
Today, most of the new recruits to Credit Suisse come directly from or have worked at Goldman Sachs, with around 70 advisors total. The firm has lured others from J.P. Morgan, Alliance Bernstein, UBS Private Wealth, Merrill Lynch's Private Banking and Investment Group and Morgan Stanley.
Those hires include two advisors, Charlie McKinney and David Barnes, who DeChellis also had an active role in hiring in the wake of the crisis. Both advisors separately joined Credit Suisse in Dallas from UBS Financial Services.
McKinney, a former business owner turned financial advisor, joined the firm in September 2008 after five years at UBS and eight years before that at Goldman Sachs. His team also includes two other partners, an analyst and a sales assistant. Together, they now manage about $1.7 billion and have a loan portfolio of less than $300 million. McKinney says his team was motivated in 2008 to find a firm with a strong balance sheet for their clients. "I always thought that Credit Suisse was like Goldman Sachs in terms of the intellectual capital of all of the employees," McKinney says. "So when we were looking to leave UBS, Credit Suisse was number one on our list."
Since joining the firm, McKinney's team's total revenues have risen by 15% to 20% per year in the past four years, while their fee-based business has grown between 50% and 100% per year for four years. The team's clients consist mostly of former entrepreneurs, with about 80% based in Texas, and still others in Florida, North Carolina and Montana.
McKinney's team knew they had made the right decision to move to Credit Suisse when they saw the firm build its private bank lending practice from a small offshore operation in Great Britain's Guernsey to a New York-based business that now has more than $2 billion in loans and more than $5 billion in committed loans.
That has helped McKinney's team as clients like Mark Cuban sought to refinance his Dallas Mavericks or another $100 million client may seek a $5 million line of credit to buy a vacation home in Montana.
Credit Suisse's vast resources also helped McKinney two years ago as his group began to look for alternatives to investing in U.S. Treasuries. After talking with fellow Credit Suisse employees in London, McKinney opted for Australian sovereign debt.
"Within a month of learning that business, we ended up purchasing probably $300 million of Australian debt, which had a better credit rating than the U.S., and probably 400 basis points more in yield," McKinney says. "Those are the kind of sophisticated transactions that take place with smart people at the front of them. I love that, being able to offer that to our clients."
David Barnes joined Credit Suisse later than McKinney, in April 2009, but was motivated by similar concerns, as his own entrepreneur-clients were worried about UBS' subprime exposure and the safety of their money.
"I was getting incoming calls from clients saying, 'Hey, I like working with you, but I'm getting very uncomfortable with the firm that you're at, given all the problems they appear to be having in the papers,'" Barnes recalls them saying. Most of his clients reacted very positively once he joined Credit Suisse.
Switching firms has also been a boon for his business, particularly this year, Barnes says, which has exceeded his best years at both UBS, where he spent eight years, and Goldman Sachs, where he worked for a decade. Barnes currently works with approximately 80 clients and has about $1 billion in assets under management.
That growth has been bolstered by Credit Suisse's lending and alternative investments platforms, both of which Barnes describes as robust. That particularly true for alternative investments, where Barnes has roughly 20% of his clients' assets, including hedge funds, private equity and private equity real estate. "You can only go into those managers where the firm has a relationship, and good hedge fund managers tend to hitch their wagon to one or two firms and stick with them," Barnes says. "So that's a real value added if your firm has a strong [alternative investments] department."
Barnes also has leveraged the firm's events for clients focusing either on continuing education or entertainment, including the Concours d'Elegance at Pebble Beach, the U.S. Open, or racecar driving around the Texas Motor Speedway. Barnes notes that "140 miles per hour will get your attention."
What Barnes notices most about working at Credit Suisse versus his predecessor firms is that there are not any less experienced or less knowledgeable advisors clogging up the transfer from prospect to client. And when he needs something, either DeChellis or Peter Skoglund, head of Private Banking USA, answer the phone.
"You have a direct pipeline to the decision makers, instead of having to go through a couple of layers of regional managers," Barnes says.
But Credit Suisse's model has not worked unequivocally for every advisory team who has signed on to the firm. In August, a two-member advisor team, Matt Dillig and Ted Bowen, who manage $1 billion in assets and who moved to Credit Suisse in 2008 from Merrill Lynch's Private Banking and Investment Group, switched again to HighTower in Chicago. The move was prompted by the team's desire for a more independent model for their approximately 30 family clients. "Had we decided to stay in the investment banking community, as an advisor within an investment bank, Credit Suisse would have been a great place to continue to work," Dillig said at the time. "But we made the decision to seek an independent platform."
DeChellis acknowledges that he personally hates to lose any of the firm's talent. Credit Suisse has seen about a dozen advisors leave this year, he estimates, which would not be a lot for a large wirehouse. But those losses come after a four-year period where the firm lost no one. In an industry where attrition is expected, the lack of movement was a little eerie, DeChellis admits.
"We're not used to losing people," DeChellis says. "And not one of them who has left has ever said, 'I'm leaving because I can't serve my clients better here,'" he says. "In fact, they usually say that they're worried about whether or not they're going to be able to do as good a job. But that someone has usually been given an offer that they can't refuse."
Today, Credit Suisse's force is spread throughout major cities in the U.S., including Atlanta, Boston, Chicago, Dallas, Los Angeles, Miami, New York, Philadelphia and San Francisco. The firm also has offices in Palm Beach and Tampa, Fla., and is eyeing new locations in cities including Phoenix, San Diego and Washington, D.C.
Credit Suisse typically recruits 30 to 50 advisors per year and hires about 25 MBA students and 10 to 20 second career transitions who the firm sees as a fit for the financial services industry. No matter what their background, all of the hires have to be able to work within Credit Suisse's ultra-high-net-worth niche.
"They're all smart," DeChellis says. "You're not going to get through the door unless you've proven you're smart. They're accomplished. They've been very successful up until this point," he says. "And a lot of it's luck. A lot of it is just the type of environment you walk into when you're starting your career."
While many of those hires help the firm cope with natural attrition, including advisors who retire, the firm has set its sights on expanding its advisor force even more.
That includes an immediate goal of bringing the firm's total advisors to 550 from 430, and could ultimately reach 700, according to DeChellis. That 550 goal could come just with the addition of two new offices, he says.
Credit Suisse is also thinking of establishing offices in Canada, a market its advisors now cover from the United States, DeChellis says. And since he came on to lead the Americas, the Latin American business, which was older and more established than the U.S., has also grown substantially. Today, it is slightly smaller than the U.S. business, he says.
All of those growth plans come as DeChellis plans to maintain the private bank's focus on providing the best environment for the best financial advisors, so that they can in turn provide the most high quality services to their clients. Part of that focus includes allowing its force to sell more third-party products than Credit Suisse's own products.
"We shop the street for solutions for our clients," DeChellis says. "You make less money doing it that way, but you keep relationships a much longer time. I think that's what clients more and more want to see, that you're very objective."
That client focus also emphasizes more events like the philanthropy campus, where DeChellis is scheduled to return later this September evening. Last year's philanthropy conference was the catalyst for one of Torop's entrepreneur-clients to focus on what kind of charitable vehicle he wanted to start, how it would be funded and how he would get his children involved.
For DeChellis, the event comes on the heels of Credit Suisse's Young Investor Program that the firm hosted the week before in Zurich for the children of its best clients. It has also spawned an upcoming reunion for about 110 past participants, which DeChellis is also scheduled to speak at in Hong Kong. And Credit Suisse also has scheduled its annual entrepreneur summit in Bali, which will gather about 30 leading business owners. All of those events are aimed at realizing DeChellis' goal of providing Credit Suisse's clients with the best service.
"What makes you comfortable is walking into a place where you know half the Forbes 400 does business here," DeChellis says. "You have the sense, 'Okay, I'm not going to be their first billionaire account. I'm not going to be their first centi-millionaire account. These are people who see folks like me every day.' And I think that's compelling for clients. I think that's very comfortable for advisors."