Howard Grace says that he's been tending to the financial health of corporations for more than two decades.
At the moment, the former investment banker is welcoming the challenge of looking after the fiscal well-being of the families and individuals that invest with Merrill Lynch & Co. Inc.'s U.S. private-client group.
A senior relationship manager, he will be working in New York for the most elite and wealthy of Merrill's clients. He says that his past experience as an investment banker will help him in his new job as adviser to clients such as the CEOs of Fortune 100 companies.
Merrill is putting "enormous resources" into its private-client group, he says. "I looked at other firms and what they're doing. And I wanted to move away from advising companies and the individuals working for those companies to advising individuals."
"A majority of our clients have some capital markets or investment banking relationships," says Mr. Grace's new boss, Michael Sullivan, a senior vice president for investments. In hiring Mr. Grace, Merrill Lynch is trying to be "proactive," he says. "He's our direct contact, the gateway to capital markets or investment banking."
Superrich
Broker-dealers, asset managers, trust companies and private banks all want the wealthiest clients.
Observers, however, question whether Merrill Lynch can cut it in the elite world of the superrich. They wonder if the dominant retail brokerage can also succeed in a business that looks more like a private bank than a stock brokerage.
Mr. Grace will work with Merrill Lynch's most elite clients - the 382 families who are treated as if they've walked through the doors of a private bank rather than those of the country's largest retail stockbroker.
Over the past year, the group has been winnowing away clients so it can concentrate on the elite. Mr. Grace says the U.S. private-client group has dropped from thousands of clients to hundreds.
Mr. Sullivan says skeptics don't understand what his group is doing. When he started the private-client group in 1993, its clients had combined assets of $1 billion; the figure now exceeds $10 billion. "I've heard that criticism for eight years. I'm not sure we want to be labeled a private bank."
`Solution guy'
Mr. Sullivan says that Mr. Grace is another piece in the puzzle to bring clients top service. "He was the solution guy for companies," Mr. Sullivan says, pointing to Mr. Grace's experience in structuring equity finance, convertibles and other deals. "All he's doing now is putting on his hat for individuals."
Mr. Sullivan says that the private-client group has 44 investment professionals divided into four teams.
Mr. Grace says that he will be the head of his own team by the end of the year. He believes in Merrill Lynch's model - to seek the best advice for its clients, even if it comes from outside the firm. "The advice and planning firm will be the winner, not the product pusher."
Mr. Grace, 47, has been with Merrill Lynch for three years. He was a managing director in the firm's equity capital markets group and worked on deals such as the 1999 initial public offering of Manulife Financial Corp.
He says he moved over to the private-client group for his own reasons. "The reasons are mostly personal," he says about his decision to change jobs. "There's a high burn [out] rate in equity capital markets."
A veteran of Wall Street, he has worked for top firms in the past, including UBS Securities, the First Boston Corp. and Goldman Sachs & Co. He did deals for Merrill Lynch in financial services as well as the lodging and leisure sectors, and Reits.
He contemplated a career in medicine before deciding on Wall Street and investment banking. He is philosophical about his choice of careers. "I became a company-doctor as opposed to being an individual-doctor." But the former student of medicine emphasizes the "personal side" of the new job, too. The job is about "getting involved in people's families."
