First Republic recruiting slows in Q3

First Republic Bank, a destination for wirehouse advisers moving to a different employer in recent years, saw a slowdown in recruiting in the third quarter, nabbing just one team for the three months ending in September.

In the first two quarters of the year, the bank reported a total of seven teams moving from a wirehouse or similar wealth management firm to work at the bank's wealth management group. During a conference call with analysts Wednesday morning, bank executives said that one team had already moved to the bank in the final quarter of the year.

According to InvestmentNews Research, First Republic Securities, where its advisers are registered, saw a net increase of 109 financial advisers in the five years from 2016 to 2020, an average of adding almost 22 advisers per year.

The third quarter of the calendar can also be a slow time for advisers moving from one firm to another due to the summer doldrums.

Despite the slowdown in adding new advisers in the third quarter, the bank expects to continue its growth of financial advisers.

"We've not had any notable attrition in teams, people or assets," said Jim Herbert, chairman and co-CEO of the bank during a conference call this morning to discuss the quarter's results with investors and analysts. "The pipeline [of advisers] is an ongoing process, and it's a little unpredictable because it's the hiring of individual teams, who are highly specialized."

"We have conversations going on at all times," Herbert said. "This year's rate is probably what we could expect going forward, but it's very hard to predict quarter to quarter."

The bank's wealth management group over the past decade has been a destination for wirehouse advisers looking to leave Wall Street for a smaller firm and also get paid a significant bonus to do so. The bank will pay on the high end of bonuses for financial advisers in markets it is looking to expand, recruiters said.

First Republic Bank was part of Merrill Lynch when Bank of America Corp. took over the firm during the credit crisis in 2010; Bank of America later sold First Republic to a group of private investors who then took it public.

According to the company, the bank’s wealth management group had $251.7 billion in assets at the end of September, an increase of 49.7% over 12 months.