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UBS snags slew of advisers in slow recruitment year

In an admittedly slow period for recruitment, UBS picked up a considerable number of advisers over the past year.

According to the InvestmentNews Advisers on the Move database, the wealth management division of UBS Financial Services Inc. added the most new advisers (74) and the greatest amount of assets ($11.6 billion) among firms in the database — this despite persistent rumors the division might be sold. UBS Financial also saw 67 advisers managing $7.6 billion leave the firm, giving it a net addition of seven advisers and $4 billion in assets, according to the database. (See the full list of UBS recruits here.)
The Advisers on the Move database, which is representative of a considerable sample of overall recruiting activity in the industry, does not include all data on advisers moving within the industry and is based on recruiting moves that have been made public. However, the IN database indicated that at least 544 financial advisers changed firms over the 12-month period ended March 31.
Those advisers had $76.8 billion in combined client assets at the time of their departures. (View all of those moves here.)
Morgan Stanley Smith Barney LLC saw the most advisers (110, managing $14 billion in assets) leave over the past 12 months, IN’s data showed. Three of the 10 biggest departures as measured by AUM were from Morgan Stanley, including two three-person teams that joined UBS, and Alan Harter, an adviser who came to the firm via the Smith Barney acquisition. Mr. Harter launched his own advisory firm, Pactolus Private Wealth Management, this year.
See: The top 10 gainers, ranked by assets.
Also see: The top 10 gainers ranked by reps added.
MSSB also added 53 new advisers who managed $9.2 billion at their former firms. Per the firm’s year-end disclosures, MSSB’s total rep count stood at 18,043 at the end of 2010, down 1%, or 92 total reps, from a year earlier. It still ranks as the largest brokerage force in the industry.
Recruiters say that movement of advisers within the industry is way down from what it was in turbulent 2009.

“Last year was one of the quietest recruiting periods I’ve ever seen in the industry,” said Mark Elzweig, head of an eponymous executive search firm. This dovetails with statements from wire-house executives, who say they are experiencing near-historical lows in turnover of their top-producing reps.

Emerging firms in the industry were involved in some of the largest adviser moves in the last year. Advisory firm CapTrust Financial Advisors hauled in the biggest catch when it recruited John Pickett and two associates from RBC Wealth Management last June. Mr. Pickett managed $8.5 billion in assets at RBC. CapTrust also opened a Des Moines, Iowa, office last December after it brought in a four-person advisory team from Holmes Murphy & Associates that manages $1 billion in assets.

The most publicized adviser move of the last year involved another industry upstart —Michael Brown‘s departure from Bank of America, U.S. Trust Wealth Management to Dynasty Financial Partners. He managed nearly $6 billion at the Bank of America Corp. unit.

Not surprisingly, his leaving caused a stir.

Initially, BofA filed suit to stop Mr. Brown from soliciting clients. Later, the bank settled the matter. But the defection prompted the parent company to tighten restrictions on advisers who plan to exit the U.S. Trust unit. Those curbs including putting departing employees on garden leave.

Barclay’s Wealth, the wealth management unit of Barclay’s PLC focused on ultrahigh-net-worth clients, was involved in three of the 10 largest recruiting moves, according to the IN database. The firm, which acquired much of Lehman Brothers Holdings Inc.’s wealth management assets in the U.S. two years ago, is aggressively hiring high-end advisers from the wirehouses and private-banking operations.

Mr. Elzweig expects that wirehouse advisers contemplating moves — whether to other wirehouses or to independent firms — will feel more confident about doing so this year.

The biggest reason for the relative lack of movement in the industry last year was the retention bonuses paid out by three of the four major wirehouses at the beginning of 2010. With Bank of America Merrill Lynch and Morgan Stanley Smith Barney needing to retain their top advisers after difficult mergers, both offered awards of from 30% to 75% of trailing-12-month gross to producers of $500,000 or more, said Mr. Elzweig. UBS Financial Services Inc. followed suit. Wells Fargo Advisors LLC was the only wirehouse not to institute a new bonus program.

“Those retention bonuses have been very effective,” said Mr. Elzweig.

He says that the improved markets and the generally more positive experience that investors are now having could change the dynamic. Advisers will likely be more confident that they can keep their clients if they do change jobs. And as those nine-year bonus packages amortize, more will be interested in testing the market for their services.

It should be noted that the Advisers on the Move database tends to have more information on firms that actively publicize new recruits.

Merrill Lynch, for example, generally does not disclose new hires, said company spokeswoman Selena Morris. The departing advisers, on the other hand, are typically announced by firms that hire them: meaning that InvestmentNews has more information on Merrill’s departing advisers (55 over the last 12 months) and less on its incoming ones. Even so, Ms. Morris said that in each of the last five quarters the firm has added more advisers than it has lost.

*About the findings: The InvestmentNews Advisers on the Move database is populated with direct submissions from advisers, broker-dealers and recruiting firms, in addition to aggregated news stories published by InvestmentNews and other sources. The data contained within is representative of a considerable sample of the overall recruiting activity in the industry; however, it does not include 100% of total actual recruiting activity. For options on downloading the data gathered in the database, click here.