In 1890, John F. Moors and Charles Cabot started a small investment firm in Boston’s financial district with the mission of handling the personal investments of the two founders and their friends.
Over time, that mission expanded. Moors & Cabot now manages the assets of thousands of clients from its Boston headquarters and branch offices throughout the U.S.
On Tuesday, July 8, the firm is commemorating its 135th anniversary by participating in the closing bell ceremony at the New York Stock Exchange.
"For 135 years, our firm has stood as a pillar of stability in wealth management, uniquely positioned as a privately held entity,” according to Michael Hildreth, its CEO.
Wealth Solutions Report caught up with Mark Garrett, Executive Chairman at Moors & Cabot, who, along with Hildreth, is one of 18 representatives of the firm taking part in Tuesday’s closing bell ceremony.
Garrett reflected on the unique formula and approach to which he attributes the firm’s success since its founding 13 years before the establishment of the present-day New York Stock Exchange.
WSR: Moors & Cabot considers itself a “135-year-old startup.” Tell us what that phrase means.
Garrett: We merge the wisdom and experience that being founded in 1890 affords us with the agility and forward thinking that is more frequently found in Silicon Valley startups. But we’ve been at it a while. The cool thing about having a history like ours – and not having the challenges of seed funding, A rounds, B rounds and traditional debt or convertible capital raising of the typical startup – is that we can focus on the task at hand, which is organic and measured inorganic (recruited) growth.
We get to take our experiences with an embedded financial advisor and client base and provide flexibility to enable FAs and teams to deliver client service on their terms.
The people at M&C are what make us special. And we take a long view. That’s what 135 years of history does for us. We know that the client relationships reside with the advisors and it is our job to make M&C a great place to work for them to ply their craft. We do that by being on the cutting edge of people development, process enablement and technology application that are specific to the challenges faced by advisors today.
WSR: You have chosen to pursue business based on private ownership without external capital from sources such as private equity. How does that affect the environment at your firm? How does it affect the advisor recruiting process?
Garrett: Our ability to make decisions fast and to deploy our resources effectively and efficiently is a competitive advantage. Private ownership makes that possible. We don’t have the same constraints that others might have to return capital at the end of typical private equity cycles – or to manage to quarterly expectations from a wider investor pool. Our ownership team is in it for the long haul. We have said for years that we want to build a sustainable, scalable and profitable business. That’s what we are doing.
Our ability to make decisions fast and to deploy our resources effectively and efficiently is a competitive advantage.
And we really like reinvesting in our business. We do that in terms of people (recruiting, training, conferences, staff and FA gatherings), process (constantly looking for efficiencies that support the growth mindset of our advisors and teams) and technology (to enable the people and process). From a recruiting process standpoint, it narrows the pool – but we think that the right advisors for M&C get it. Why take a check that is really your discounted future cash flow when you can participate in the profitability of your practice today without the tax implications and constraints of a forgivable loan?
WSR: Your firm has chosen an approach of developing wealthtech tools alongside the primary wealth management business. Tell us about that business and how it fits within the broader goals of the firm.
Garrett: We are focused on people, process and technology at M&C. In that order. We view technology as an enabler (whether it is the current tool set of data driven insights or the applicability of AI in a thoughtful and compliant way). In 2017, we made a key decision to onboard a new hire to lead Strategic Initiatives. This team’s mandate was to look at the intersection of business requirements and technological capabilities and innovation.
We knew we needed a fresh set of eyes to develop our collaboration strategy and platform and to develop a thoughtful data strategy to build value – not only with the technology stack – but in the industry stack more broadly. That’s exactly what we’ve done. And we quickly realized that if we were building innovative tools that could help our own people, there was no reason why we shouldn’t consider doing that for others, too.
We are incubating candidate solutions and deploying them for and alongside others in the industry.
That sweat equity led to a technology solution “sandbox” where we are incubating candidate solutions and deploying them for and alongside others in the industry. That’s our Labs team. It’s simple but very innovative.
Jeff Berman, Contributing Editor and Reporter at Wealth Solutions Report, can be reached at jeff.berman@wealthsolutionsreport.com.
