James Ross, Annette Bidart and Michael Fleiner exercise a discipline that prevents them from dropping whatever they’re doing to chase after new business at Bidart & Ross Inc.
“We don’t answer every request for proposals,” says Fleiner.
And Bidart finishes the thought, “Our current clients are our most important clients.”
That disciplined approach has worked well for the management of Bidart & Ross during its 25-year history, and it’s also the cornerstone of the counsel that the firm provides to its clients.
The company’s staff of eight works with nearly 50 clients — primarily institutions such as corporate retirement plans and nonprofit foundations and endowments — that represent a total of $4.2 billion in assets.
Private wealth management services for individuals account for about $40 million — something less than 1 percent — of the funds under management from the company’s office in South Meadows.
Ross and Bidart, who’d grown disillusioned with traditional Wall Street practices, launched the firm in 1989 as one of the pioneers in fee-only financial counsel.
Bidart & Ross doesn’t represent any funds or managers, doesn’t rely on sales commissions for the products it recommends and instead is compensated entirely from the advisory fees paid by clients.
That, Bidart noted, was starkly different from the traditional Wall Street approach that put the earnings of the investment firm ahead of the best interests of the client.
And Bidart says the company met resistance in its early days as it pushed hard for transparency among fund managers who didn’t want to disclose their hidden fees.
“In the consulting world, we were really pushing it,” she recalls. “I’m proud of the work that we did.”
Fleiner, the third partner in the company, came on board in 1992.
Bidart says the company’s ability to stay independent at a time that fee-only advisory service was rare depended on its ability to operate with low overhead.
“We didn’t have any grand plans,” she says. “We brought in the right clients at the right pace.”
Even today, the company grows cautiously, taking on only a handful of new clients each year. Each client works directly with Ross, Bidart or Fleiner.
Those new institutional clients typically are looking for management of funds that range from $20 million to $500 million — sometimes more — and Fleiner says the sales cycle often can be painstakingly slow and meticulous.
The company’s partners also have taken a methodical approach to extension of the firm’s geographic reach.
“If we could drive there in a day, that was the market,” chuckles Fleiner. Its clients today stretch from Denver and Salt Lake City in the Intermountain West to the Bay Area and north into the Pacific Northwest.
While the firm has been cautious in its growth into new markets, it’s been aggressive in the adoption of technology, largely to control the costs of the reams of paperwork that are generated by investment management.
“We always spent a lot of money on technology in our reporting,” says Bidart. “We bought the technology instead of hiring another person.”
Its staff of eight today includes three partners and four analysts — and a communications specialist.
Most of the company’s work initially focused on corporate retirement and profit-sharing plans, and it slowly widened its focus — largely at the request of clients — into providing financial counsel for nonprofit endowments and foundations.
It further widened its services in recent years into private wealth management and family-office services.
Bidart & Ross depends on a step-by-step approach that incorporates careful assessment of its clients’ goals, development of written investment policies, selection of investment managers and careful control of investment costs.
That work has become substantially more complicated in the past quarter century, Bidart says, as a multitude of new asset classes now compete for the attention of investors who once could focus exclusively on blue-chip stocks and bonds.
And it requires patience —both by the firm’s advisors as well as its clients — during an investment era that seldom directs the spotlight to long-term strategies that carefully weigh risks as well as rewards.