How a crisis offers wealth planners a recipe for growth
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A big career move for Nelly Mubashi has once again been followed by an economic crisis that served to test the investment adviser’s mettle.
In January, she took over as chief executive at Northwest Asset Management from Greg Headrick, with whom Ms Mubashi co-founded the independent registered investment adviser in 2008 — just as banks’ subprime mortgage bets began to unravel, sending global markets into meltdown.
While the timing of that launch “wasn’t great”, Ms Mubashi says, it strengthened the company’s sense of purpose. “We felt that we really could help and add value for the clients,” she recalls.
Today, she leads the fast-growing business — based in Mercer Island, Washington — as its clients’ investment portfolios once again come under pressure, this time from the complex layers of financial uncertainty brought by the Covid-19 pandemic.
Northwest Asset Management — which features on this year's FT 300 Top Registered Investment Advisers list — was borne out of a spin-off from Swiss-based global bank UBS. Ms Mubashi and Mr Headrick had worked together at investment manager Piper Jaffray since 2003. But when it was acquired by UBS three years later, the pair noticed a change, Ms Mubashi recalls.
“We liked the smaller feel that Piper Jaffray had, and UBS was different culturally,” she says. “It was a bigger company, and so we really didn’t fit in.” Nevertheless they stuck it out for two years while they plotted their next move.
At Piper and UBS, the pair operated under the team name of Northwest Asset Management which they kept when they left UBS and established the RIA. About 95 per cent of their existing clients moved with them to the new firm.
What started as a business with $150m in assets under management has since evolved into a RIA plus an affiliated venture servicing other advisers which together manage $4bn.
Northwest, based near the hub of Seattle, has a strong focus on client working in technology, Ms Mubashi says. But as the firm is registered in several states, it has been able to widen its net when recruiting.
Each year, the firm has brought in new advisers with expertise in certain industries. At least one adviser specialises in employee stock plans for Amazon staff, for instance, while another mainly serves Microsoft engineers. Another in Texas works with a lot of clients in the oil and gas industry.
Northwest’s growth has been gradual. In 2011, it launched RIA Innovations, which provides services such as bookkeeping and compliance assistance to other registered advisers.
Growth remained consistent until 2015, Ms Mubashi says, at which point it decided to “refine” its approach. “We defined the type of adviser we wanted to hire and did not compromise,” she says, “I really hire for experience and intelligence and work ethic. It’s about the drive and the grit.” The firm has since grown further through client, adviser and custodian referrals, she adds — Northwest’s AUM more than doubled from $920m at the end of 2016 to $2bn at the end of 2019.
While the firm’s growth will inevitably be hit by the pandemic-related volatility this year, the market has proved relatively resilient, Ms Mubashi says. The S&P 500, for instance, has bounced back from the market sell-off in March, returning to the same level it was at in early January. “While puzzling, it is a good thing for clients and their portfolios but we still remain vigilant,” she says.
Ms Mubashi, whose former roles at the firm include director of operations and chief operating officer, completed a masters degree in finance at Seattle University a year after founding the firm. “My background had been in retail investing,” she says. But after studying corporate finance, she became “more and more interested in that side of the business” — which eventually drew her to the role of chief executive.
Today, she oversees Northwest’s 39 practices across the US, the registered advisers serviced by subsidiary RIA Innovations and about 20 other employees.
Yet despite such a consuming remit, Ms Mubashi has been reluctant to part with “a very small” book of clients. “They’ve been with me since I started in the business,” she adds.