Institutional consultant and OCIO snags Envestnet director for wealth business

Clearstead, a Cleveland, Ohio-based institutional consultant and OCIO, recently hired Envestnet alum Jean Heath as senior managing director of advisor solutions national sales.

That follows an expansion the firm has been making in wealth management, acquiring companies at an accelerating pace since 2011. Most notably, that includes its purchase this year of Norfolk, Virginia-based Wilbanks Smith and Thomas Asset Management, a group with $5 billion in assets under management that has been rebranded as Clearstead Advisory Solutions, the division whose sales Heath is helping expand.

That includes the acquired firm’s multi-asset-class separately managed accounts.

“We were very purposeful to go out and find someone with Jean’s expertise and grow that part of the firm,” said Mike Shebak, head of institutional consulting at Clearstead. “Jean’s focus is entirely there.”

The newly added firm significantly helps diversify Clearstead’s business, Heath said.

“We’re now being able to serve a different part of the market,” she said, adding that tax and trust services are also available. “It creates a great opportunity for that space.”

That the firm is broadening out into high-end wealth management is an industry trend – that business can be complementary to institutional consultants and outsourced chief investment officers (OCIOs), and vice versa, said George Wilbanks, the recruiter who worked with Clearstead to fill the role.

“That intersection of institutional and high-end wealth is gaining momentum,” he said.

A separate example of that trend is Hightower’s recent deal for a majority stake in investment consultant and OCIO NEPC, he said.

Clearstead is “stepping the game up a little bit to get out in the marketplace and be a little more visible,” Wilbanks said. “Jean is going to be selling these tax managed SMA products nationally into bank broker-dealers, independent wire houses, some of the regional broker-dealers… It’s a big step up for a firm that size to be going to that level.”

As of last year, OCIO providers that had a background in wealth management accounted for 5 percent of total global OCIO AUM, compared with 2 percent in 2017, according to figures from Cerulli Associates. In the US, such companies managed about $244 billion in private wealth, accounting for over 8 percent of OCIO AUM in the country last year. However, that could increase quickly, with projections that private wealth assets by OCIO providers will grow by 11 percent annually over five years, reaching $412 billion, Cerulli stated. Survey data that firm provided show that just over three quarters of OCIO providers said private wealth is at least somewhat important to growing their OCIO business.

As of April, when the closing of the Wilbanks Smith and Thomas sale was announced, the merger raised the total assets under advisement to $44 billion for Clearstead Advisors and subsidiaries, with $20 billion of that being AUM.

That “combination continue[d] Clearstead's rapid growth trajectory and further consolidate[d] Clearstead's position among the leading RIAs in the US,” the firm said at the time.

Behind the growth, as with many RIAs on the hunt for acquisitions, is private equity money. Flexpoint Ford made a majority equity investment in Clearstead in 2022, kicking off a string of purchases the institutionally focused company made to bolster its wealth management business, along with personnel additions.

The company works with close to 1,200 individual and family clients and provides tax, planning, and family office services in addition to investment management. It also counts more than 245 endowments, foundations, retirement plans, and hospitals among its clients.