Advisers on the Move

Top advisers with $68B in client assets jumped ship in 2010

Money, mergers fueling the exodus, say industry watchers

Dec 15, 2010 @ 3:52 pm

By Liz Skinner

Hundreds of financial advisers switched firms this year, many looking for opportunities to build equity in themselves and some exiting after mergers. A fair amount of advisers were also lured by big bucks, recruiters and industry experts noted.

At least 206 teams of advisers — managing a total of $68.3 billion in client assets — moved to another company or created a new firm in 2010, according to data collected by Investment News. The data, which are gathered in the InvestmentNews' Advisers on the Move database, does not include all adviser moves for the year and tracks the movement of reps with at least $20 million in client assets.

In the biggest defections of 2010, financial adviser John A. Pickett and two other team members left RBC Wealth Management, where he managed $8.5 billion in assets, to join CapTrust Financial Advisors in June.

This month, Michael C. Brown departed from Bank of America Corp.'s U.S. Trust unit, where he managed $5.9 billion in client assets, to join Dynasty Financial Partners. Mr. Brown's clients had a typical net worth of $50 million, according to Barron's, which ranked him 28th on its most recent list of the top 100 U.S. financial advisers.

(Click here for a look at the largest moves of 2010.)

“Financial advisers leave for two reasons: money and discontent,” said Eric Gershman, president of Consultants Period Ltd. “We're seeing a lot of discontent and a lot of money.”

Typically, the discontent has stemmed from changes at firms following the financial crisis, along with a raft of broker mergers and acquisitions. Advisers remaining “at changed firms” often they feel as if they don't have a say in the company anymore, Mr. Gershman said.

“The people who hired them are no longer there,” he added. “The money is there now because all firms are having such a horrible time recruiting that they have moved their [pay] needles” to pay more to attract advisers.

Wirehouses are not the only firms struggling to attract advisers. Independent advisory firms and regional broker-dealers have seen a slowdown in recruiting advisers, experts said.

But fewer than half of the advisers who leave large brokerage firms join another wirehouse, according to industry recruiter Danny Sarch.

“Big brokerage firms have done an unbelievable job of destroying employee loyalty and client loyalty,” he said.

Why do advisers still join wirehouses?

“The draw is the money,” Mr. Sarch said, adding that other benefits include “big brands and terrific platforms.”

In November, UBS Wealth Management Americas hired a three-adviser team from Morgan Stanley Smith Barney LLC. Roger Stephens, Dan Rothenberg and Theodore Fisher managed $2.1 billion of client assets while at Morgan Stanley.


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