Entrusted with nearly $4 trillion in client assets, and founded in 1818, New York-based Brown Brothers Harriman & C0. (BBH), has announced a key management appointment naming Michael McGovern as Managing Director, Chief Information Officer, and Head of Systems, according to an official corporate press release from BBH today.
Mr. McGovern is based in New York and reports to BBH Partner and Global Head of Technology, Taylor Bodman, as noted in the announcement. The firm has offices in 17 locations across the globe.
Commenting regarding his new executive move, Michael McGovern said in the press release, “As a technologist, I’m excited and proud to be part of this organization. BBH’s systems are world-class. Equally impressive is the inherent configurability of the firm’s technology platform. Through the flexibility to export our technology to help large enterprises scale their businesses, BBH is supporting an underserved growth segment of the market. Meanwhile, BBH continues to invest heavily in the ongoing evolution of technology required across its key business lines. That’s very exciting for the industry and our clients.”
Wearing Several Hats at Once, in Complementary Roles
The several senior roles that Mr. McGovern will be responsible for – will have an effect on all of the firm’s business lines including its leadership, management and the firm’s technology development and overall strategy regarding application and infrastructure development.
Mr. McGovern joins BBH from Citi Transaction Services where he spent the last decade serving as Managing Director and Global Technology Head of Securities & Fund Services, as per the press release. Also noted was that his 26-year career in information technology includes significant and industry-relevant posts at Chase Manhattan Bank and Chemical Bank, which all together could have been the appeal for his candidacy.
Taylor Bodman, Global Head of Technology at BBH, added in the corporate announcement, “For many years, clients have selected BBH’s financial services because of the depth and specialization of the technology behind them.”
Mr. Bodman concluded,“Since the establishment of our Infomediary business a dozen years ago, BBH has offered technology services independently of financial services. With over 150 leading asset gatherers now serving their clients using BBH technology as their own, we have two synergistic businesses. Mike has joined BBH to lead these mission critical activities as we expand the geographic and functional scope of our technology. He has many attributes that will make him a great fit for our organization. Among these are his client-orientation, domain expertise, teamwork approach, and track record of delivery.”
Foreign Exchange a Significant Business For BBH
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The nearly 200 year-old firm, in addition to its custodial services, lists itself as a specialist provider of foreign exchange solutions designed specifically for global investment managers, and delivers executions in spots and forwards for freely traded currencies, along with a specialty in emerging and restricted markets, as described on its website.
Through a centralized offering, the firm provides clients the ability to trade through its own solution or through 3rd party platforms (FXall, Bloomberg,etc.), this also provides clients to use BBH as the principal to the trade, or act as their agent via facilitating to a 3rd party, and with varying degrees of client involvement while providing a range of customized pre-trade and post-execution tools, reports and analytics, which offer unique insights aimed to help clients build an efficient and transparent FX program.
Excerpted from their corporate website, a copy of a matrix highlighting the progressive scope of BBH’s Forex offering can be seen below:
Regulatory and Corporate Structure, Example
The firm lists 41 Partners at the helm of the company, according to its latest disclosure document. This document, found on its website explained that BBH’s primary regulator is the New York State Department of Financial Services (NYSDFS), and since it’s also a bank (established under NY law) it is exempt from registration with the Securities and Exchange Commission (SEC) as an investment advisor (IA) but maintains a separate business that is registered with the SEC, and its securities business is subject to reviews by FINRA.
In addition, trust services offered through an affiliated Delaware incorporated entity under the BBH brand for the Trusts and which are member banks of the federal reserve and subject to regulatory oversight by the office of the currency comptroller (OCC).
Under a company disclosure, it lists the firm as an investment manager and wealth adviser to private clients — typically with at least $10 million of investable assets — and institutions with significantly greater assets, including:
- Public Funds and Pensions
- Central banks and Financial Institutions
- Insurance Companies
- Endowments and Foundations
- Foreign Officials and Government Institutions
- Private Investment Funds
- Settlement Trusts
- Other Advisory Client such as Taft Hartley Plans
Advisory fees were described as being charged as a percentage of assets, and no less than a minimum of $50,000-$100,000 per annum per strategy, but in certain cases negotiable with the possibility of certain advisory fees waived. The above is just meant as an example and not exhaustive of the firm’s diverse business lines and segments, a full copy of the disclosure can be found on BBH.com
In the end, relationship banking/brokering appears to be the allure of its offering combined with the firms heritage, size and overall specialized approach.