Douglas Throneburg recently joined Byline Bank as the new head of Wealth Management, where he oversees all functions within our Wealth Group. The former head of the Wealth Advisory Group at First American Bank, Throneburg brings over 30 years of experience in overseeing investment management, client advisors, new business planning, and other specialty facets of wealth management to Byline.
We sat down with him to discuss his new role, his thoughts on how to best serve the wealth management needs of small businesses, and how Byline Bank is keeping an eye on the future for its wealth management clients.
Douglas Throneburg, CFA, CFP®, CPA, CIPM. Executive Vice President, Head of Wealth Management
Byline recently integrated wealth management into the commercial banking division. Can you explain the impetus for the change and how the Wealth Group works?
Bank wealth management groups often get labeled as trust departments, which can be confusing, as that’s not our only function. At Byline, we manage it all—from providing high-net-worth individuals customized advice on building and protecting their wealth, charitable giving and tax strategies, to serving the unique wealth management needs of our business owner clients within the commercial banking division.
In the past five months, we’ve created four divisions within Wealth:
- The Investment Management team that manages client assets directly led by new Chief Investment Officer Kurt Funderberg.
- The traditional Trust and Estates Group, which handles the management of estates and guardianships and is now being led by new Chief Fiduciary Officer Andrew Crouch.
- The Client Advisory Group, which covers the wealth management of non-trust areas like legal stock and guardianships under client advisory—financial planning, tax strategies, estate planning, etc.
- The Retirement Plan Services group, which manages retirement services and plans for business owners.
With these four groups, we are focused on transforming our wealth services into a true, future-fit group to help our clients grow their wealth and thrive for generations to come.
Byline is dedicated to addressing the needs and growth of our small business owners that serve as the backbone of their communities. Can you explain how the wealth management needs of small business owners differ from the average high-net-worth individual?
In my experience, so many small business owners are first-generation, meaning they truly poured their blood, sweat and tears into their businesses to get them where they are. For this kind of business owner, the majority of their wealth is often tied up in their business. This presents some unique challenges as far as diversification and retirement planning, because they have historically been so focused on building and growing their business that they haven’t really considered what the business will need to thrive when they aren’t at the helm anymore, or even what their own life will look like after retirement.
When there is a liquidity event – e.g. they sell their business and have cash in hand – they’re often very reluctant about putting that money into the stock market to invest in other companies, because it feels like they’re losing control over their wealth. But wealth management functions like estate planning are essential for determining business worth and an exit strategy—all things small business owners need to thrive both throughout their career and after.
How is Byline uniquely positioned to advise owners on building, protecting, and transferring generational wealth?
The advantage of a smaller, localized commercial bank like Byline is the personalized service we provide, which helps owners build and continue to grow every step of the way. From providing the funds to jumpstart their business to managing the long-term considerations, such as a future liquidity event, retirement services, and succession planning the builds, protects, and transfers intergenerational wealth, we truly know our clients and what’s important to them. Our team goes the extra mile to continue to serve as their financial partner by finding opportunities that benefit them and their families year-over-year to achieve their goals over the long term.
What are the current wealth management risks and opportunities for business owners?
Interest rates, from a lending standpoint, probably have the biggest impact right now. This a byproduct of inflation, and it means that loans are maturing in the next year will be refinanced at a higher rate. This means higher loan payments, which will in turn dampen earnings. Byline’s commercial lenders are currently working with our customers to help them weather the storm. We’re not just looking at elevated interest rates; we’re asking the right questions: How do we transition our strategy to remain agile amid a volatile interest rate environment? How do we best work with you to succeed?
We are cultivating more than a lender-borrower relationship; it’s really a partnership. We want to see our commercial clients succeed and ensure those on the wealth management side have a solid exit strategy in place.
What are your top three pieces of advice for small businesses to manage their wealth?
- Have a plan. Succession planning and exit planning should happen years before the liquidity event, and you need to ensure you have a solid that you establish an estate plan in place before you move on from the business.
- Keep an eye on tax planning. Be mindful that minimizing the impact of taxes is a process that happens over a period of years, not months. You can’t just wake up one morning and decide to sell your business, because frankly you won’t get what it’s worth unless you have a plan in place to maximize the business value and minimize your tax liability. Our client advisors can help build a plan for businesses to be better positioned to reap the long-term benefits.
- Find a post-exit purpose. If you spend 50 years building a business, it becomes part of your identity, and many business owners find themselves depressed and purposeless after retirement. If you want to enjoy your golden years, you need to find a hobby, a passion, a reason to get out of bed in the morning that’s not tied to your business.
As you reshape things at Byline, what are you most excited about?
I’m excited about a lot of things, but the growth opportunity is especially compelling. Byline is a $10 billion commercial bank, and the Wealth Group has just under $800 million of assets. That is a big discrepancy in our world and a huge growth opportunity. I’m excited about working alongside the Commercial and Community Banking teams, our new members, and those who will in the future help to lead, shape, and grow the Wealth Group.
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