Focus on Families: Arlington Partners

Arlington Partners LLC in Birmingham, Alabama, credits its success first to its people, and second to its focus. Says Kenneth H. Polk, CEO and managing member, “We have 31 people and serve only 17 families.” Those families encompass a total of 100 people, however, with each family “normally” holding at least $100 million in liquid assets. “So it’s very intense, people-wise,” Polk explains. Their focus, he says, is on those families, “not institutions;” the size of the practice will be limited to 25-30 families. Currently, the firm grows as it adds client families, “but at some point in time it will only grow with our families,” Polk declares.

The firm adds new clients by word of mouth, and has added two families a year for the past three years. “In a normal year we will talk to four or five families,” says Polk, pointing out that it’s not only very important but also a “very large task,” since each necessitates adding “new human capital into our system.” Typical client families are “multigenerational and very complex;” they may have trusts, family partnerships, and multigenerational household needs. 

Arlington, Polk believes, distinguishes itself from other wealth managers, and from private banks and others whose reputations suffered during the economic crisis, by focus: “When people find out about us and what we do, it brands us as the type of firm that fits their family…By limiting the number of families we choose to work with, it enhances our ability to serve…” It also, he adds, helps families to understand how the firm serves them; it’s “usually a unique proposal to families.” He points out that the way the firm grows, “[in effect we’re telling new clients that] we want you to make a fifty-year long-term decision.” 

What differentiates Arlington, Polk believes, is the way it serves clients. “We treat them as their own single family office,” he says. “We look at what kind of structure we need to serve each family, and then we build it. We have what we call a family office executive—what a lot of firms call managing directors.” Each executive, or director, is in charge over the “different buckets of services,” which include an internal tax team, a financial services team, a trust company, investments—the managing director is assigned to that specific family, leads the directors of each service team, and, in what Polk believes makes the difference, is “charged with understanding the human capital [team] for the families we serve.” 

Polk views the firm as a “client advocate. That’s what they need us to help them with . . . a lot of our families could build [our service] themselves, or buy it from someone else, but we sit on the same side of the table with them.” 

Regarding fiduciary duty, Polk says, “I do think [the] level of fiduciary will rise up and touch broker/dealers…I do believe if you’re giving advice to a client, you should be a fiduciary…if you’re…on the other side of the table, you should let them know you’re not on their side and that you’re not a fiduciary.”—Marlene Y. Satter

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