Introduction
SVB Wealth LLC (“SVBW” or “we” or “us”), a Massachusetts limited
liability company, is an investment adviser registered with the
United States Securities and Exchange Commission (the “SEC”)
under the Investment Advisers Act of 1940, as amended (the
“Advisers Act”). SVBW is a wholly owned, non-bank subsidiary of
First-Citizens Bank & Trust Company (“FCB”), which in turn, is a
wholly owned subsidiary of First Citizens Bancshares, Inc., a
publicly traded company (NASDAQ: FCNCA). Previously, SVBW
was owned by Silicon Valley Bridge Bank, N.A. (“SVBB”), a full-
service FDIC-operated ‘bridge bank’ chartered by the Office of the
Comptroller of the Currency as a national bank, and prior, Silicon
Valley Bank (“SVB”), which was closed by the California
Department of Financial Protection and Innovation. Upon the
closure of SVB, the Federal Deposit Insurance Corporation (the
“FDIC”), as the appointed receiver, transferred substantially all of
the assets of SVB to SVBB on March 13, 2023.
SVBW has been in business since 2014, originally operating as
Boston Private Wealth LLC (“BPW”), a subsidiary of Boston Private
Financial Holdings, Inc. (“BPFH”). In 2021, SVBW’s former parent
company, SVB, acquired BPFH and as part of the integration, BPW
changed its name to SVB Wealth LLC in 2022.
This Brochure describes the investment advisory services offered
by SVBW. SVBW’s advisory services are made available to clients
primarily through its “Private Wealth Advisors” (collectively
referred to herein as Private Wealth Advisors and each, a Private
Wealth Advisor). Private Wealth Advisors are individuals
associated with SVBW as investment adviser representatives.
Some Private Wealth Advisors are also registered representatives
of First Citizens Investor Services, Inc (“FCIS”), an SEC-registered
broker-dealer and a member of the Financial Industry Regulatory
Authority (“FINRA”).
As of December 31, 2023, SVBW had the following regulatory
assets under management:
Discretionary $ 6,464,656,324
Non-Discretionary $ 165,509,644
Total $ 6,630,165,968
Types of Advisory Services
SVBW offers discretionary and non-discretionary investment
advisory services. Client accounts for which SVBW serves as
investment adviser are referred to throughout this Brochure as
“Advisory Accounts” and/or “Accounts” (and each, an “Advisory
Account “or “Account”). Clients who wish to open and maintain an
Advisory Account and receive any of the investment advisory
services discussed in this Brochure are required to enter into the
applicable SVBW investment advisory client agreement (the “Client
Agreement”), which sets forth the services that SVBW (and, if
applicable, the Investment Manager(s) (as defined below)) will
provide to the client, the obligations of SVBW in providing such
services, and acknowledgement of the investment advisory
relationship between SVBW and the client. The specific terms and
conditions of the Client Agreement will govern each client’s
Advisory Account and the investment advisory relationship between
the client and SVBW and, as applicable, other parties to the Client
Agreement with respect to the Advisory Account(s).
The investment advisory services that SVBW offers can be provided
on either a discretionary or non-discretionary basis. Non-
discretionary advisory services are intended for clients who want to
receive ongoing investment advice for a fee but wish to retain
ultimate decision-making authority over the trading activity in their
Account(s). These non-discretionary services include providing
investment advice and specific asset allocation and/or investment
recommendations based on a client’s investment objectives, risk
tolerance, financial circumstances and other information clients
provide to SVBW when establishing an Advisory Account. Under a
non-discretionary relationship with SVBW, SVBW will provide the
ongoing and continuous investment advice and guidance to the
client as memorialized by the Client Agreement, and it will be the
client’s decision whether SVBW’s investment advice and
recommendations are implemented in their Account(s).
SVBW provides a broad range of investment management and
advisory services and offers investment analysis and portfolio
construction over a broad range of investment styles. Our
investment offerings include equities, fixed-income securities,
mutual funds, exchange-traded funds (“ETFs”), private funds, and
derivatives, as well as various investment strategies of certain
unaffiliated, third-party Investment Managers (defined below).
Investment offerings vary by service and certain offerings are
subject to investment minimums and/or specific eligibility
requirements and therefore may be limited based on one or more
factors such as a client’s personal financial situation, amount, and
type of assets available to invest, and/or account value. For
example, pursuant to applicable rules and regulations, private fund
offerings are only available to qualified clients who meet certain
eligibility requirements related to financial sophistication and net
worth, among others.
SVBW manages investment portfolios comprised of various
strategies and investment types, including individual stocks and
fixed income securities as well as investment vehicles, such as
mutual funds, ETFs and private investments funds, that invest in
equities, fixed income securities, and underlying pooled investment
vehicles.
Our full-service investment management clients receive our wealth
advisory & financial planning services at no additional charge.
Custom Portfolio Management Services
SVBW’s approach to investment management begins with a review
and assessment of each client’s specified investment objective(s),
risk tolerance, and investment time horizon. After this assessment,
we recommend a custom investment portfolio, which can include
individual equities, individual fixed-income securities, mutual funds,
ETFs, and/or limited partnerships and similar pooled investment
vehicles.
The overall asset allocation is determined by the client’s investment
objectives as described above; the appropriate risk tolerance is
then defined based on that assessment, and falls within one of the
following six categories:
Aggressive Growth | Growth | Balanced Growth
Balanced Income | Income | Conservative Income
In creating these customized portfolios, certain of SVBW’s
proprietary investment strategies, as described below, may be used
to fulfill certain allocations.
SVBW’s custom portfolio management services also include a
comprehensive review of each client’s existing holdings and asset
mix to implement a streamlined and tax efficient transition of client
assets and/or securities – all aligned to the client’s personal
investment objectives. Each client will be served by one or more
Private Wealth Advisors who are trained to respond specifically to
Part 2A of Form ADV: Firm Brochure – March 31, 2024 | Page 5 of 18
each client’s unique requirements.
Concentrated Holdings Services
For clients who seek advice related to concentrated security
holdings, SVBW provides analysis, research, monitoring, and active
management and will design diversification strategies for clients
with concentrated securities holdings. Our services for
management of concentrated securities holdings are provided on a
pre-approved basis and require a preliminary review of the client’s
portfolio by one of our investment professionals. If suitable, as part
of these services, we may also recommend the use of options
strategies. Clients should be aware that the use of options presents
additional risks as described below in Item 8. As such, the
recommendation and use of options strategies for clients is on a
limited basis, as suitable and appropriate for any such client.
Proprietary Separate Account Strategies
SVBW offers a suite of proprietary separate account strategies that
may utilize individual equities and/or fixed income securities as well
as strategies that invest in ETFs and/or mutual funds. These
strategies are designed to provide a foundation for client’s
investment portfolios through both diversification and active
management. These proprietary separate account strategies may
be used exclusively or in combination with other strategies within
the client’s aggregate portfolio.
Our proprietary separate account strategies are managed in
accordance with the client’s specified investment objective(s) and
risk tolerance for an Account. The investments utilized for a
proprietary strategy are selected based on achieving the stated
objective(s) of the specific strategy. The use of, and allocation to,
SVBW’s proprietary strategies in a client’s portfolio will be chosen
based on the client’s overall risk tolerance, time horizon, and
investment objective(s). SVBW’s professionals will offer specific
guidance about which strategy or combination of strategies will be
best suited to each client’s investment objectives, risk tolerance
and investment time horizon, among other things, and the proper
allocations within the client’s portfolio framework.
Third-Party Investment Managers
SVBW may recommend the allocation of a portion of a client’s
investment assets among one or more unaffiliated, third-party
investment managers (each, an “Investment Manager” and
collectively, “Investment Managers”) in accordance with a client’s
investment objective(s), risk tolerance and financial situation.
SVBW maintains a disciplined research and due diligence process
to identify Investment Managers that offer investment strategies
(each, a “Strategy” and collectively, “Strategies”) that we believe
provide opportunities not available through, or more appropriate
than, investment vehicles such as ETFs or mutual funds. As
discussed in Item 8 below, factors which our investment team
considers in selecting and recommending Investment Managers to
our advisory clients include, but are not limited to, the management
style, investment and overall performance, reputation, financial
strength, reporting, pricing, and research of each such Investment
Manager, as well as a client’s designated investment objective(s).
The Investment Manager shall have day-to-day responsibility for
the active discretionary management of the client Accounts
invested in their Strategy or Strategies. SVBW shall continue to
render investment advisory services to the client through the
ongoing monitoring and review of account performance, asset
allocation and client investment objectives. SVBW maintains
ongoing annual due diligence and review over the recommended
Investment Managers. Before a client establishes an Account with
an Investment Manager, the client will receive the Form ADV Part
2A Brochure (or other applicable disclosure document) for such
Investment Manager which contains information regarding its fees,
services, methods of analysis, Strategies, and other important
information.
SVBW enters into sub-advisory agreements with the Investment
Managers it recommends for client portfolios. This means that
SVBW has discretionary authority to hire and/or fire the Investment
Manager on behalf of clients and results in some operational
efficiencies regarding the opening and closing of accounts as well
as communicating transaction details. As discussed below in Item
5, each Investment Manager charges its own advisory fee which is
deducted from a client’s Account at the customary billing intervals.
SVBW does not receive any compensation from any Investment
Manager.
As detailed below in Item 5, the investment advisory fee that a client
pays to SVBW does not include the fees charged by each available
Investment Managers.
The Form ADV Part 2A Brochure for each Investment Manager
is available at the SEC’s website at
https://www.adviserinfo.sec.gov/IAPD. Clients are encouraged
to review each Investment Manager’s disclosure documents
for important additional information.
Private Investment Funds
Some clients prefer the ability to access private investment funds.
SVBW offers eligible clients access to certain unaffiliated private
investment funds. SVBW will only recommend private funds to
those clients who meet the regulatory requirements and thresholds
(i.e., Accredited Investor, Qualified Client, or Qualified Purchaser)
to be eligible to invest in such private funds, and for whom SVBW
reasonably believes such an investment to be suitable, given the
client’s total portfolio, investment objectives, risk
parameters/tolerance and liquidity needs. SVBW shall not exercise
any discretion whatsoever related to a client’s decision to invest in
any private fund. Rather, the decision to invest in any private fund
is made by the client and is the client’s responsibility.
SVBW’s role relative to the private investment funds shall be limited
to its initial and ongoing due diligence and investment monitoring
services. If a client determines to become a private fund investor,
the amount of assets invested in the fund(s) shall be included as
part of “assets under management” for purposes of SVBW
calculating its investment advisory fee. SVBW clients are under
absolutely no obligation to consider or make an investment in any
private investment fund(s).
Any clients deciding to invest in a private fund will receive an
offering memorandum, or other similar document, prepared by the
fund sponsor outlining the fund’s investment objectives, risk factors,
conflicts, and the terms of the investment in such private fund. For
each private fund in which a client decides to invest, the client will
sign and enter into the Client Agreement with SVBW
and will also
be required to sign separate fund documentation (i.e., a
subscription agreement or other similar agreement) for each such
private fund acknowledging the terms and conditions of the fund
and/or venture and the corresponding risk factors, including loss of
principal and liquidity constraints.
Investments in private investment funds involve various risk factors,
including, but not limited to, potential for complete loss of principal,
liquidity constraints and lack of transparency. A complete
description of such risks is set forth in each fund’s offering
Part 2A of Form ADV: Firm Brochure – March 31, 2024 | Page 6 of 18
documents, which are provided to prospective investor clients for
review and consideration. Unlike liquid investments, private
investment funds do not provide daily liquidity or pricing. As with all
recommendations made in our capacity as investment adviser,
before recommending a private fund to any client, SVBW must
determine whether a specific private fund is suitable for, and in the
best interest of, a particular client. In so doing, SVBW shall consider
the following factors:
– The type of offering-including risks, time horizon, and liquidity
issues.
– The client’s investment objective(s) – realizing that for
certain clients, a private fund of any kind may not be
suitable;
– The client’s current portfolio allocation;
– The client’s available cash to commit to the private fund;
– The private fund’s investment minimum per investor; and
– The client’s current allocation to private investment funds.
– Any supplemental account reports prepared by SVBW shall
reflect the most recent valuation provided by the fund sponsor
for each private investment fund owned by the client.
Wealth Advisory & Financial Planning Services
SVBW, in partnership with FCB, offers a range of wealth
management and financial planning services which provide clients
with advice and information aimed to help them make informed
decisions about their entire net worth or components of their net
worth. The wealth advisory and financial planning platform has a
flexible framework which allows us to customize our approach and
the services provided to meet the unique goals and objectives of
clients.
Our internal wealth advisory and financial planning team includes
professionals who are trained to advise clients on a wide variety of
matters related to wealth and financial planning. Depending on the
particular needs of a client, the SVBW advisory and financial
planning team can provide comprehensive financial planning review
services as well as periodic financial planning reviews to assess a
client’s financial situation, goals and objectives.
These services include advice related to one or more of the
following:
– Income and retirement planning
– Protection planning
– Investment management planning
– Legacy and estate planning
– Philanthropic planning
– Business succession planning
– Executive planning
– Estate plan analysis and review
– Insurance and risk management review
– Cash flow and debt management
– Compensation and benefits
– Donor advised funds
Investment Consulting Services
SVBW also provides investment consulting services designed to
assist clients in creating and implementing an organized, long-term
strategy to make informed decisions about their entire net worth or
components of their net worth. Specific investment consulting
service options include, but are not limited to, the following:
Diagnostic Review
– Review client’s current investment process and/or
investment advisory engagements
– Provide executive summary of our observations and
recommendations
– Investment policy development and governance design
– Investment council/committee design
– Asset allocation strategy recommendations
Portfolio Construction and Implementation
– Access to the other investment advisory and investment
management services of SVBW (as detailed above),
including proprietary equity and fixed-income investment
strategies and Strategies of third-party Investment Managers
– Concentrated security management
Performance Measurement, Reporting, and Analysis
– Custom benchmarking and reporting
– Strategy performance analytics
Custom Investment Solutions
– Customized security research
– Access to platform of Investment Managers
As part of our investment consulting services, SVBW may also
provide discretionary investment advisory services in combination
with other (non-discretionary) investment consulting services.
Services to Retirement Plan Assets
Upon request, SVBW also provides investment advisory services
on a client’s 401(k) or similar retirement plan assets. For these
clients, SVBW shall make recommendations to the client on the
allocation of the retirement account assets among the investment
options available on the applicable retirement plan platform. Please
note: SVBW’s services shall be limited to the recommendation of
allocation of the client’s 401(k) plan or similar retirement plan assets
among the investment choices available through the plan. SVBW
will not receive any communications from the 401(k) plan or similar
retirement plan sponsor or custodian, and it shall remain the client’s
obligation to notify SVBW of any changes in investment option
changes, investment option restrictions, or other relevant or
material information pertaining to the retirement account.
IRA Rollovers or Transfers
In appropriate circumstances, SVBW may recommend that a client
roll over an account held in a former employer’s retirement plan or
an outside Individual Retirement Account (“IRA”) to an IRA for
SVBW to manage. If the client elects an IRA rollover or transfer
subject to SVBW’s management, the account will be subject to
SVBW’s advisory fee per the Client Agreement.
Many employers permit former employees to keep their retirement
assets in the company plan, and some retirement plans permit
current employees to move assets out of the company plan before
retiring or leaving the company. In determining whether to complete
an IRA rollover, and to the extent the following options are available,
clients should consider their costs and benefits. An employee will
typically have four options:
1. Leave the assets in the employer/former employer’s plan;
2. Transfer the funds to a new employer’s retirement plan;
3. Cash out and take a taxable distribution from the plan;
4. Roll the funds into an IRA account.
Each of these options has advantages and disadvantages, and
SVBW recommends that clients communicate with their own legal,
tax, and/or accounting advisors to consider the options specific to
their own situation before making a change. Clients should consider
the following relevant issues together with their Private Wealth
Advisor and their own personal tax, legal, and/or accounting
Part 2A of Form ADV: Firm Brochure – March 31, 2024 | Page 7 of 18
advisors before initiating a rollover or transfer to a SVBW IRA:
– Whether the investment options in the employer retirement
plan or existing IRA address client’s needs or whether other
types of investments are needed.
– Employer retirement plans generally have a more limited
investment menu than IRAs.
– Some employer retirement plans have unique investment
options not available to the public such as employer
securities, or previously closed funds.
– Whether the employer retirement plan or existing IRA has
lower management and investment fees and expenses than
SVBW. If interested in investing only in mutual funds, clients
should understand the cost structure of the share classes
available in the employer retirement plan compared to those
available in an IRA.
– Clients should understand the various products and
services available through a SVBW managed IRA and the
potential costs of those products and services.
– Clients should consider if SVBW’s recommended strategy
entails higher risk than the option(s) provided in their
employer retirement plan or existing IRA and whether the
level of risk is consistent with their current risk tolerance
and investment objectives.
– If the employer retirement plan or existing IRA offers financial
advice.
– Keeping assets in an employer retirement plan may
potentially delay a required minimum distribution beyond age
72 if the client is still working for the employer.
– For clients concerned about protecting assets from creditors,
an employer retirement plan may offer more liability protection
than an IRA. Such legal protection varies by state.
– Generally, federal law protects assets in qualified plans
from creditors. Since 2005, IRA assets have been
generally protected from creditors in bankruptcies.
However, there may exceptions to these general rules so
an attorney should be consulted if the client is concerned
about protecting their retirement plan assets from creditors.
– If loans may be available from the employer retirement plan
(although generally loans are not to available ex-employees);
no loans are available from an IRA.
– When considering accessibility for an IRA versus an
employer retirement plan, it’s important to evaluate how
accessibility needs align with the rules governing each type
of account.
– Employer plans may have more stringent rules on
withdrawals and may require that the account holder
reaches a certain age, no longer works for the employer,
or meets other plan-specific criteria.
– IRA assets can be accessed any time; however,
distributions are subject to ordinary income tax and may
also be subject to a 10% early distribution penalty unless
qualifying for an exception such as disability, higher
education expenses or the purchase of a home.
– If a client owns company stock in their employer retirement
plan, they may be able to liquidate those shares at a lower
capital gains tax rate.
– If the client’s employer retirement plan allows SVBW to be
hired as the investment manager and to keep the assets titled
in the plan name.
– It is important that clients understand the differences between
these types of accounts and to evaluate whether a rollover is
best under the circumstances.
See Item 10 below for more information regarding conflicts of
interest associated with rolling over or transferring employer
retirement plan assets or IRA accounts to a retirement account
managed by SVBW.
Retirement Plan Advisory Services
In addition, a team comprised of certain SVBW Private Wealth
Advisors known as the Retirement Plan Advisory Team (the “RPA
Team”) specializes in providing counseling and advice to
businesses on effective plan governance and delivery of employee
retirement benefits subject to the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”). The RPA Team
provides services to assist plan sponsors, plan trustees, and
investment committees to meet their fiduciary responsibilities. The
investment advisory services provided by the RPA Team include
preparation of investment policy statements, evaluation, selection,
and reporting of investments, and advising clients on education and
communication with plan participants. The RPA Team counsels
plan fiduciaries with its expertise in plan governance, risk
assessment, and expense analysis.
Wrap-Fee Program
SVBW sponsors a wrap fee program in partnership with an
unaffiliated third-party, Betterment LLC (“Betterment”), that is not
described in this Brochure. In this program, Betterment, acting as
sub-adviser, provides discretionary portfolio management and
asset allocation services to clients based on each client’s specific
goals, investment objectives, risk tolerance, and other information.
Clients pay an asset-based, all-inclusive “wrap” fee that covers the
costs of Betterment’s investment advisory services as well as
associated trading and custody services provided by its affiliated
broker-dealer, Betterment Securities. Information about this
program is contained in our Appendix 1 Wrap Brochure, which can
be obtained upon request from a Private Wealth Advisor, or at the
SEC’s website at
www.adviserinfo.sec.gov/IAPD.
Reasonable Investment Restrictions
With respect to most advisory services described in this Brochure,
clients may seek to impose reasonable investment restrictions on
the management of their Account assets, including requesting, in
writing, particular securities that should not be purchased for an
Account (by providing a ticker for any such security), and/or
requesting, in writing, a reasonable level of limitation on the
discretionary authority granted to SVBW for an Account (e.g., limit
the types/amounts of particular securities purchased for a client’s
Account) which will be accommodated where practicable. For
clients participating in a specific proprietary model or strategy,
SVBW will attempt to accommodate requested reasonable
limitations and investment restrictions to the extent possible or
practicable.