Keeping the Wealth in Washington

As Wall Street collapses, investors seek safer harbors closer to home for their wealth.

By Bill Virgin |   September 2009   |  FROM THE PRINT EDITION

Illustration by C.J. Burton

Seattle has long fancied itself a world business capital, especially when it comes to computer software, coffee or internet retailing. A lot of local people certainly made a lot of money from national—even international—success in those and other businesses. “If ever there was a community that benefitted from the economy” over the last 30 years, Seattle was the place, says David Lewis, chairman and chief executive of Seattle-based First Washington Corp., which manages $750 million in client wealth.

But when it came to managing the money its entrepreneurs, investors and business executives made, says Lewis, “We’ve largely been a branch office.”

As fast as the money was made, much of it was sent off to Wall Street firms. At the height of Seattle’s economic boom, some big national firms opened Seattle offices to scoop up even more of the money believed to be lying around.

“You don’t have a lot of the money actually managed here,” says Bill Whitlow, senior vice president and senior portfolio manager at Davidson Investment Advisors in Seattle. “You don’t have a lot of large money managers here.”

That era may be coming to an end. Wall Street is now more vulnerable than at any time in recent decades. The past year’s financial meltdown has evaporated billions of dollars in assets from the smallest individual retirement accounts to the biggest endowments. Century-old firms have been shut or forced to sell to banks at huge discounts. Local investors burned and chastened by sinking money into exotic investments marketed by East Coast firms are retreating to plain-vanilla investments they understand, and to close-to-home managers.

Old money, the inheritors of which have tended to keep their funds in the big New York firms that their parents and grandparents frequented, is now beginning to look around.

“We are getting a lot more calls from second- and third-generation wealth that tended to stick to the big companies in the past,” says Jon Jones, one of the founders of Brighton Jones, a Seattle-based wealth management firm that manages about $1.5 billion in client assets.

A perceived lack of communication during the meltdown between the big Wall

Share this Article

• 
• 
• 
• 
• 
•