Trails require someone to take the lead; to be the first one to carve the path that will eventually become a trusted trail.
Sendero means “path” in Spanish and our trailblazer was Fred Middleton. More than three decades ago, he brought the concept of modern wealth management to San Antonio. He localized the idea of finding outstanding money managers on behalf of clients to essentially build “portfolios of ideas” and have experts manage those portfolios. It was born from his commitment to the people who put their trust in him.
A Chance of Pace
Fred’s career started in the high-pressure world of trading. He traded oil and gas futures for 15 years before he decided he needed a change of pace.
“At one point I said, ‘I can’t do this the rest of my life.’ You never get to go out at lunch with your friends or whatever because you never knew what the market was going to do,” he says. “It was hard to be involved with Fiesta Week, or anything else because the competition in New York, didn’t care what you were doing down there in San Antonio.”
During that time, friends were coming to Fred asking for investment advice. They knew his reputation as a trader and supposed Fred could help them make the right investments.
“In the old system, there were only brokers,” he says. “You’d call your broker whoever they were, and they would fill your orders. You’d tell them what you wanted to buy or sell, or they would help you create a portfolio. The broker worked on commissions for each trade.”
But Fred was aware of a new concept “separate account managers.” These managers would invest money from clients and create a portfolio of multiple stocks with a specific focus like value stocks or growth stocks. The manager would earn a percentage of the pool of money instead of a commission for each trade. As the pool grew, so would their pay. This aligns with the manager’s interest in growing the clients’ money instead of doing trades for the commission.
Fred believed by combining separate account managers, he could build a diversified portfolio for clients that could weather any market better than an individual and his broker trying to build a portfolio one stock at a time. “Fred recognized the world of investment management was changing 10 years before most others in the field,” Sendero Chairman Scott McMillian says.
Scott was working in accounting and Fred’s Houston partner, Roy Trice, saw that Scott and Fred could be a powerful team together. Fred wanted to create a company that brought together unique combinations of their talents and strengths. While working for Redstone, a Houston-based family office, Fred, Roy, and Scott started laying the groundwork for what would become Sendero. They were methodical in their approach.
A Company Is Born
At 60, most people are looking at retirement, not starting a new business. But this new business, Sendero Wealth Management, was something he had been working on for years. So what that it was 2008, and one of the worst recessions in history? Fred says, “It was a scary time, no doubt about that but our clients trusted us, and we weren’t going to let them down.”
“It was a big deal that we made this happen in 2008 when the financial world was in crisis,” Scott says. “But it shows you how personal our business is and the importance of having the right people on your team and good communication with clients.”
Fred has always stresses doing the right thing, even if it hurts. That philosophy was key to the successful transition from Redstone to Sendero. He takes the responsibility for our clients’ wealth personally. They invest to secure the future of their spouses, their children, their grandchildren. They want to leave a legacy and live to enjoy a life full of memories.