Lazard reining in wealth management unit

Move is part of cost-cutting but adviser job cuts remain a question

Nov 15, 2012 @ 2:28 pm

By Andrew Osterland

lazard, wealth management
+ Zoom

Lazard Ltd. is folding its U.S. wealth management business into a larger unit as part of a cost-cutting initiative announced in the third quarter. The decision comes just three years after the business was launched as a subsidiary.

“The wealth management business in the U.S. is becoming part of Lazard Asset Management,” Lazard spokeswoman Judi Mackey confirmed.

Though the New York-based investment bank and advisory firm isn't closing the business, it's unclear if the move will result in job losses for advisers.

Lazard does not break out numbers for its U.S. wealth management business, but it is far smaller than the European business, which operates under the name Lazard Freres Gestion.

Ms. Mackey provided no further details about the move.

Lazard is known primarily for its mergers and acquisitions advisory business and its investment banking operations. Still, the global asset management division had $160 billion in assets under management at the end of September.

Lazard started the U.S. private wealth management business in 2009, but it has not reported performance for the subsidiary separately from the asset management group. It brought in Thaddeus Shelly, a former Bessemer Trust executive, to lead the unit, but the firm has been quiet on the recruiting front, said Danny Sarch, president of recruiting firm Leitner Sarch Consultants Ltd.

“They have the wonderful name in investment banking, and everyone thought it would be great if they were in wealth management,” Mr. Sarch said. “But it seems they were just dabbling in the business rather than being committed to it.”

Lazard's senior leadership appears to have lost patience with the dabbling.

“We are implementing cost-saving initiatives to reduce the firm's expense base and enhance our operating leverage,” Lazard chief financial officer Matthieu Bucaille said in a third-quarter earnings release. “These include streamlining our support functions and eliminating investments in areas of low return.”

How far the streamlining of the business extends is not yet clear. Mr. Shelly was not made available for comment.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

Tech tools of tomorrow: Innovations your firms can't live without in 2020

Gadget Girl hits the tech pavilion at Pershing INSITE to see what exciting new tools advisers can't afford to miss.

Video Spotlight

Will It Last As Long As Your Clients Do?

Sponsored by Prudential

Video Spotlight

The Catalyst

Sponsored by Pershing

Latest news & opinion

10 funds with largest 3-year outflows

Even well-managed funds that have beaten the S&P 500’s 10.1% average annual gain have watched investors flee.

Wirehouse training programs are back

At one time, major brokerage houses ran large, expensive training programs for thousands of young brokers, and now it looks as if they are about to return to that model.

New military pension rules need financial advisers to step up and serve

Matching defined contribution plan expected to see more money, more need for sound advice.

Brian Block's $4 million bonus was tied to a key metric at ARCP

Prosecution rests case in fraud trial against CFO of American Realty Capital Properties.

Edward Jones is winning the Google search war

Brokerage firm's digital marketing investment helps land it at the top of local and overall search engine results, report finds.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print