Wirehouse advisers are playing musical chairs this summer after a year and a half of tepid turnover in the wealth management industry.
Recently,
Bank of America Merrill Lynch landed four advisers overseeing a combined $533 million in assets under management, and
Wells Fargo & Co. hired five advisers with a total of $966 million to join their Private Client Group. All nine advisers were recruited from fellow wirehouses — moves that could point to new hiring momentum, according to recruiters.
Merrill Lynch's hires, who hail from rival wirehouses Morgan Stanley Wealth Management and
Wells Fargo Advisors, moved to the firm in August. The advisers who have joined
Wells Fargo Advisors' stand-alone branches this summer departed from Morgan Stanley Wealth Management and
UBS Wealth Management Americas.
The hires come amid increased adviser movement at the four wirehouses during the summer, shaking up what had been anemic turnover through much of the year.
“We've entered a perfect storm for adviser movement,” said recruiter Mindy Diamond, president of Diamond Consultants.
Ms. Diamond said she saw a drag on adviser movement during 2012 and through most of 2013, but she believes this resistance created “pent-up demand,” resulting in more turnover in the last couple of months.
Now, she said, four forces are pushing advisers to consider jumping ship.
First, wirehouse incentive packages are at a high-water mark. Second, the shadow cast by the
Financial Industry Regulatory Authority Inc.'s consideration of the broker disclosure rule is creating concerns about the regulatory environment. Third, retention packages are down from their peak, and with every day that goes by, advisers are amortizing more of the money from those packages. And fourth, bank parents to wealth management arms are prone to be overly controlling of their advisers while also creating bureaucratic hiccups, which yield frustration.
“This creates a dissonance,” Ms. Diamond said. “Advisers want to be treated like entrepreneurs with a large degree of flexibility and freedom. The frustration comes from a lack of or loss of control.”
“In the last couple of months, there's been more movement,” she said. “And a lot of that movement has been from the wirehouses to the independent space.”
But Bill Willis, president and chief executive of financial services recruiting firm Willis Consulting Inc., said turnover at the wirehouses is still “encumbered by retention deals,” a product of the post-2008 climate.
“2013 remains an OK year for recruiting, but not a banner year,” Mr. Willis said.
The advisers joining Merrill Lynch include Charles Phelps, who has $201.8 million in assets under management, who joined the San Mateo, Calif., office from Morgan Stanley. Also from Morgan Stanley, Abtin Zarrabi, who has $191.9 million in assets under management, joined Merrill's Pinnacle Peak, Ariz., office.
Robert Bezzone and Joseph Marotta joined Merrill in Morristown, N.J., from
Wells Fargo with $139.5 million in assets under management.
Courtenay Hathcock, Frederick Rossetter and William “Bill” Black joined
Wells Fargo's New York-Penn Center branch from
UBS with $418 million in assets under management. Lou Walsh joined the Jacksonville, Fla., branch from
UBS with his 17 years of experience in the industry and $287 million in assets under management.
Eric Zakarin joined
Wells Fargo at the Westfield, N.J., branch from Morgan Stanley. He has 26 years of experience in the industry and $261 million in assets under management.
