On July 17, 1995, we founded Fort Pitt Capital Group along with Arlene Hoebler, who provided seed funding and remains a trusted colleague. Sue Mitchell, Tom Bellhy and Doug Kreps were also founding partners, and instrumental in our early development. They left the firm in 1996, 2004 and 2011, respectively. The seven of us had been key players at another financial advisory firm in Pittsburgh, where we served on the investment committee, but had no ownership. We ventured out on our own to build a business on a foundation of long-term financial planning and value-driven investing – all done with our clients’ best interests at heart. We were a brand new, independent Registered Investment Advisor (RIA) in a world of commissioned brokers.
Go or No Go – Starting a Business
We all left stable jobs that provided good livelihoods to start a firm with uncertain prospects, but we trusted each other. We knew that everyone needed to be fully “in” to make it work. Ted recalls he and Mike shooting hoops in his driveway while discussing the big decision. This conversation included discussions that Charlie’s investment management expertise would be necessary to attract clients to the firm. Skilled client consulting and sound money management would be key components of any future success at Fort Pitt Capital. It was an exciting time for all of us, as we began to forge what Fort Pitt is today. We solidified friendships and began to recognize that we could build something lasting by relying on one another. Every person who came with us was an essential piece of the puzzle.
Growing the Firm
Due to a non-solicitation agreement with our former firm, we had to leverage personal and other connections to grow our business. Strong relationships and personal connections led to many former clients seeking us out, which enabled a solid early footing. One catalyst for our early growth was “The Capital Group,” a weekly radio show which the team hosted in Pittsburgh between 1995 and 2000. At market close every Friday, we recorded a one hour “magazine” style show to recap the market week. It was a LOT of work, but we always made it fun and it helped generate interest in our fledgling firm.
Additionally, Fort Pitt was the first advisory group in western Pennsylvania to be part of the Charles Schwab AdvisorSource, which rolled out in 1996. Through this national referral service, Schwab would refer retail clients looking for an advisor to us. Since it was a new service, other advisors were skeptical, but it helped us get off the ground. At the time, we ranked in the top 5% of the country among RIA firms in the program in closing business.
Fast forward to 2015. Following many years of steady growth, we wanted to continue to grow the firm, but we knew we needed help to do it bigger and do it right. To build something larger that would outlast the founders, we knew mergers and acquisitions would be key. We decided to join Focus Financial Partners. Focus had a solid history of shepherding rational and reasonable deals and, most importantly, they weren’t going to try to run our business. We joined Focus in the fall of 2015.
Four years later (we rarely do anything quickly!), we consummated our first transaction – a merger with a firm from Harrisburg, PA called Roof Advisory Group. When we met with Jeff Roof and his team, the fit in terms of culture, values, and philosophy became clear. They were well established in Harrisburg, allowing us to expand our geographic reach, and provided a deep bench of investment, planning and marketing talent that immediately enhanced our team.
How We’ve Made It Work
We won’t give away our “secret sauce” – but the core of our success is trust. With multiple partners mixing different perspectives, opinions, management styles and egos, it’s no surprise that most businesses don’t last 25 years. But we’ve always seen eye-to-eye. Our strict division of labor between managing money and managing client relationships is key. It not only allows everyone to focus on what they do best, it allows us to create economies of scale. Our story has always been about making 2 + 2 = 5 (or more) because we trust each other. With Focus now backing us, we can further scale the business by adding skills beyond client consulting and equity management. Todd Douds, who joined the firm as Chief Operating Officer in 2012 and is now a Partner, has led the charge on building out Fort Pitt’s management ranks. Jay Sommariva, a Partner who arrived in 2013, is responsible for our fixed-income offering. We grow and adapt to add the services our clients need, but the core values never change.
Through the years, we’ve added clients, Partners, employees, and assets under management (AUM). After five years in business, we had 10 employees, served 500 clients and had $265 million in AUM. By 2005, we had grown to 17 employees, served 1,100 clients, and had $849 million in AUM. In 2010 we crossed the $1 billion AUM mark, tripled our headcount to 21 employees, and served 1,500 households. At our 20-year mark, we had 33 employees serving 1,800 clients with $1.8 billion in assets. In the last five years, we’ve seen faster growth, with 51 employees now serving 2,600 families and assets exceeding $3.65 billion. This diverse group of clients represents 46 states and three foreign countries.
Goals for the Next 25 Years
We want the legacy of Fort Pitt to outlast ourselves. We’d be honored to see the business we’ve built continue to grow under the direction of a new generation of leadership. We would love for Fort Pitt to maintain its sterling reputation – and even enhance it. And sure, it would be great to see AUM grow and new milestones achieved. But the truth is, those accomplishments stem naturally from the growth of our talented pool of advisors, investment managers, and other employees – all of whom have made valuable contributions to the 25 years of success we’ve enjoyed as a firm.
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