First Republic starts year with a bang

Picks up two Merrill Lynch groups with nearly $2 billion in assets; more deals might be on the horizon

Jan 31, 2017 @ 5:00 pm

By Bruce Kelly

First Republic Bank's wealth management group has started 2017 with a bang, recruiting in January two sizable groups of Merrill Lynch advisers with $1.8 billion in client assets.

On January 20, First Republic said five Merrill advisers in New York had joined its wealth management group. Known as Consilium Associates, the group, which manages close to $1.3 billion, is led by Larry Rothenberg, Shaun Van Vliet and David Farber, who all have the title of managing director and portfolio manager.

Three days earlier, First Republic said it had recruited another Merrill veteran, Hank Holland, who manages close to $500 million of client assets and is based in San Francisco.

Meanwhile, on a conference call with investors in January to discuss fourth-quarter earnings, Bob Thornton, president of First Republic private wealth management, said, “We are still seeing a lot of great hiring activities, and I think you will see some attractive hires as we move through the first half of this year.” In 2016, the bank brought on a total of seven new advisers, which they call portfolio managers, according to Mr. Thornton.

“I've watched these those moves with some degree of interest,” said Ron Edde, CEO of Millennium Career Advisors, an industry recruiter. “I heard from one of the brokers that moved that First Republic is not offering the biggest deal on street for transition. The broker said that if he wanted more money he could have gone elsewhere but felt this was the best fit for [his] practice.”

The bank has been an active acquirer of leading wealth management firms. In 2012, it acquired Luminous Capital Holdings and in 2015 it bought Constellation Wealth Advisors. The former had $5.5 billion assets under management at the time and the latter had $6.1 billion.

Elizabeth Nesvold, managing partner of Silver Lane Advisors, represented the bank in its purchase of Luminous and sat on the other side of the desk representing the Constellation advisers in that transaction.

“There are a lot of buyers out there looking at every deal,” Ms. Nesvold said. “First Republic knows what is interesting to them and what is not. They spend a lot of time understanding what they're looking for and passing on the deals that don't make sense.”

First Republic has a unique history with Merrill Lynch. When it was still an independent investment bank and wealth manager, Merrill in 2007 acquired First Republic, which is based in San Francisco, for $1.7 billion. Two years later, Bank of America, which acquired Merrill during the dark days of the credit crisis, sold First Republic for $1 billion to a consortium of investors, including First Republic executives.

The bank's market capitalization is currently close to $14.4 billion.

A Merrill Lynch spokeswoman, Susan Atran, did not return a call to comment. A spokesman for First Republic, Greg Berardi, declined to comment.

The bank's wealth management unit has seen strong growth over the past five years. According to a recent investor presentation, assets under management or administration in the wealth management group have grown from $20.2 billion at the end of 2011 to $83.6 billion in December 2016. Fee income has risen from $73.5 million to $291.3 million over the same period of time. Private wealth management fee income comprises 13% of the bank's total revenue compared to just 6% in 2010.

(More: Betterment now offering human advice with its robo)

0
Comments

What do you think?

View comments

Recommended for you

B-D Data Center

Use InvestmentNews' B-D Data Center to find exclusive information and intelligence about the independent broker-dealer industry.

Rank Broker-dealers by

Featured video

INTV

Advisers should look beyond 529 plans for college planning

Editor Fred Gabriel talks to reporter Ryan Neal about how college-savings strategies are more important than ever as tuition costs soar.

Latest news & opinion

New ways to pay for college

Experts respond to real-life scenarios of people struggling to afford higher education.

How technology is reshaping the advice business

Artificial intelligence, Amazon and robo-advisers are some of the topics on the minds of tech experts.

Best- and worst-performing sector funds and ETFs this year

A rising tide may lift all ships, but a bull market doesn't lift all stock sectors. Here are the best- and worst-performing sectors this year, with the top and bottom fund in each sector.

Betterment slapped with $400,000 fine from Finra

Robo-adviser cited for violating customer protection rule and not maintaining its books and records correctly.

Supreme Court ruling on SEC judges unlikely to upend advice industry

But it could give rise to new hearings for some advisers who are already in litigation with the agency such as Dawn Bennett.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print