Never mind the global angst: top executives at Tiedmann Wealth Management, a New York-based firm, are optimistic on wealth prospects for 2012.

The markets may be alarmingly volatile, world leaders may be struggling to save the euro and wealth managers may be slashing fees to stay competitive, but top executives at Tiedemann Wealth Management, the New York-based firm with nearly $5 billion under management, remain optimistic about business prospects in 2012.

For starters, the firm sees more money in play next year.

“I’m meeting with a prospect who sold his business in 2007 and has been managing his own money since then but is now throwing up the white flag,” said James Bertles, managing director at Tiedemann. “This is not uncommon. People who have had liquidation events are realizing managing their money is a full-time job and that they need a professional to help them. We’re seeing more prospective clients like this and who want to work with a firm that is completely objective.”

What’s more, Michael Tiedemann, senior managing director and the firm’s chief investment officer, sees continuing wealth creation in the US, especially in the San Francisco Bay Area and middle-America markets like Chicago, Texas and Nashville.

“There are very good families all over the country who are running very successful businesses,” said Tiedemann, who is a co-founder of the twelve-year old firm. “I see that trend increasing, not decreasing.”

Expansion targets

Not coincidentally, Tiedemann is eyeing the aforementioned markets as possible expansion targets. “I think there’s less competition, especially in smaller markets,” he said. “I think large banks are at a competitive disadvantage by flying in local squads of suits to meet local owners without a relationship.”

Although Tiedemann doesn’t rule out acquisitions, any expansion beyond the firms’ current offices in New York, Palm Beach and Los Angeles is likely to be organic, he said. Tiedemann also offers trust administration services in Delaware through its Delaware Trust Company.

“We think organic growth is healthier because the on-boarding process for wealthy clients can be so lengthy,” Tiedemann explained. “It can take approximately six months to get a clear understanding of what the family’s dynamics are and what it needs. If you buy a business and have to integrate fifty families, you have to do them all at once. You can grow your top line quickly by acquisitions, but we’re not convinced it’s the most profitable way to grow the business long-term.”

Nonetheless, Tiedemann said the firm would consider integrating a smaller firm or a team if there was a “completely unified vision” of the business and cultural compatibility. Internally, he expects to add three to five client-facing professionals to the firm’s current total of 14, servicing clients whose average investable assets is $65 million.

Tiedemann maintains that the firm was able to stand firm in the ultra-competitive New York market when other firms were cutting fees to grab business after the financial crisis of 2008.

“There was massive fee compression as firms were slashing fees to win business, but we didn’t because we decided it was economically non-viable for us in the long run,” Tiedemann said. “We felt that the firms who were doing it were either hurting themselves financially or weren’t providing broader wealth management services, and that’s not how we wanted to present ourselves.”

Strong connections draw clients

While Tiedemann admits client acquisition and differentiation present a major challenge, he is also confident the firm can continue to attract clients who have at least $20 million in investable assets.

A major reason, according to Tiedemann, is the firm’s expertise in working with and selecting money managers, which stems from its relationship with sister firm Tiedemann Investment Group, a hedge fund founded by Tiedemann’s father Carl, a former president of the old Wall Street firm Donaldson, Lufkin & Jenrette, who was also a co-founder of Tiedemann Wealth Management.

“We have a lot of experience with money managers through our sister company,” Tiedemann said. “They’ve been working with them and vetting them for over thirty years and have established business relationships and a network that is very, very strong and highly unusual.”

Carl Tiedemann’s connections have helped the wealth management firm achieve a strong brand presence in the northeast, said Elizabeth Nesvold, managing partner for New York-based investment banking firm Silver Lane Advisors. Michael Tiedemann, Nesvold added, is “taking the firm to the next level, expanding the brand in a few distinct geographies where substantial wealth can appreciate the investment and fiduciary offering.”

The investment offering centers on an active and flexible management style that allows the firm to implement investment ideas directly, according to Michael Tiedemann. He remains optimistic about equities, in large part because he is convinced that despite the tenuous American economy and debt crisis in Europe, the current economic situation is vastly different than it was in 2008.

“Very few people understood the magnitude of the problem then, but now everyone knows what the issues are,” Tiedemann said. “You have a fraction of the leverage now that you had in 2007 and 2008. And policy makers saw what happened when you don’t support a major counter-party. They know it’s a global system, and will not allow a major counter-party to fail.”