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After his noncompete expired, the founder and CEO of Private Wealth Systems is welcoming old UHNW managers whose language he speaks
April 25, 2018 — 6:27 PM by Oisin Breen
Brooke's Note: Philosophers are loaded with reasons why vast wealth can screw up your life. Not on that list is the bit where Midas lacks the proper software keep track of all his family's lucre. But Craig Pearson, whose family, he wryly states, went from "riches to rags," says many ultra-affluent could be spared the dislocation his dad, hence him, experienced in seeing their wealth mismanaged into the ether. That personal backdrop for his startup, Private Wealth Systems, I found compelling. But the story of how Pearson is attempting to snatch victory from WealthTouch defeat is even more so -- a real breakaway story. What might spoil this tale of redemption is a sad ending at the hands of Addepar. That won't happen, Pearson contends. Expect the opposite. "If you have to raise $200 million, something's wrong," he says.
Just as satisfying as winning advisors are the firms that are losing to PWS in head-to-head bids -- or by default -- to his Charlotte, N.C.-based firm.
But it all makes sense when framed in hog-farming terms, says Pearson.
“It's not a beautiful looking pie chart [like Addepar] ... it is all coded from the ground-up to solve the challenges. It's not lipstick on a pig, it's about transforming the pig.”
Pearson says it's all in the way you look at it.
“[Addepar's] assets under reporting [just under $1 trillion] is completely meaningless in this industry. It's a beautiful marketing term and its very impressive but what does it actually mean? What if you have a single holding from Facebook worth $50 billion? Is that impressive?” Mark Zuckerberg's family office, Iconiq, uses Addepar software. See: How the Facebook IPO is creating the mother of all RIAs, Iconiq, and what an in-your-face it is for Wall Street.
For Pearson, there's a personal motivation behind his UHNW business: As a teenager he got fiirsthand knowledge of falling from the grace of super-affluence.
“I was working two jobs and I needed to give my father all the money I saved so he could pay rent,” says Pearson, recalling the painful period in his life after his father lost the family fortune.
“He grew up in Greenwich, Connecticut in a very nice house, went to the right schools, and now he lives in a one-room trailer in Lincoln, Fla.” See: Why the 56-year-old scion of Wall Street barons is 'broke' but unforgiving toward the financial advisors who might have kept him rich.
Pearson continues: “What happens in your teenage years scars you, so for me, PWS is my own personal therapy and my own cure. I've seen what happens when you don't have this [oversight] system ... Wealth is fragile.” See: Why love has everything to do with the next frontier in financial planning and our relationship to money.
Willing to wait
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The tactic by the Mountain View, Calif. firm and Advent co-founder and code avatar Steve Strand comes a decade after Orion, Black Diamond and Tamarac began feasting on the legacy corpses, but Addepar insists meat remains on the bone.
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Portfolio Management System
Top Executive: Eric Poirier
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