Surprise! E.F. Hutton talks again as firm resurrected
... people are very surprised, considering the firm's' been defunct since 1993. But now, a group of former Hutton managers have bought the rights to the E.F. Hutton name -- and plan to resurrect the storied brokerage.
A group of former E.F. Hutton alumni are in the process of resurrecting the venerable brokerage firm and its famous advertising slogan, "When E.F. Hutton talks, people listen."
The new E.F. Hutton & Company will be lead by chief executive Frank Campanale, who was formerly chief executive of the Smith Barney Consulting Group, a successor to Hutton's pioneering money management unit.
Christopher Daniels, a former investment banker at Hutton, will lead the investment banking side. John Lohr, former general counsel at Hutton's consulting group, is the new firm's top attorney.
In addition, Stanley Hutton Rumbough, the grandson of the firm's original founder, is also involved with the effort.
Use of the Hutton brand was dropped by then owner American Express in 1990, when it changed the name of its Shearson Lehman Hutton brokerage to Shearson Lehman Brothers. Members of the alumni group bought the Hutton brand from an investor outfit more than a year ago, Mr. Daniels said. Citigroup Inc., which had owned the Hutton brand, sold the name as part of its asset sales after the financial crisis.
Details about the resurrected Hutton, however, remain sketchy.
Mr. Campanale did note that the new firm will recruit high-end retail advisers and target institutional and corporate accounts as well.
Mr. Daniels declined to name the investors in the new E.F. Hutton.
"In the course of the last year, we've brought together a number of people — former executives and management of Hutton," Mr. Daniels said. "We've got substantial support and backing."
Mr. Daniels promised more announcements about the firm in coming weeks, including executive talent hires.
Mr. Campanale, who left his most recent position as chief executive of Advanced Equities Wealth Management in January, said he wants to recreate Hutton's performance-oriented, innovative culture.
"Frank is a good recruiter and a great salesman," said Len Reinhart, president of Reinhart Consulting Group LLC, who formerly ran Smith Barney's consulting group.
"Among the old managed money producers, there's still great respect for Hutton," said Mr. Reinhart, whose own tenure at Hutton dates from 1979. The Hutton days "were the good times. [Advisers] will look at [the new Hutton] just for that reason."
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Besides its famous advertising slogan (see commercial below), Hutton is best known in the industry for creating the wrap account in 1975, after stock commissions were deregulated.
"To me, Hutton was the best firm I ever worked for," Mr. Campanale said. "I just believe there's a hole in the business that has not been filled with an appropriate structure for [high-quality] advisers [with] the culture of a firm" like Hutton.
"There are hundreds of alumni that loved that culture at Hutton," said Robert "Bobby" Allison, managing director at Sunbelt Financial Partners, a recruitment firm, who ran Hutton's Arkansas branches in the 1980s. "I'd love to see the group put back together again," he said. "The brand name probably doesn't mean as much today as it did before. But it won't hurt. The big thing is money, and whether they can compete for talent."
Indeed, the new Hutton will face daunting competition for adviser talent. Broker-dealers and RIA custodians offer a variety of services and robust open-architecture investment platforms, including managed accounts. "We're aware of the competitive environment," Mr. Daniels said. "[But] we think there's space for a new player, especially one that comes with a great deal of experience that our people can bring."
He added that "the Hutton brand is well-known, and resonates with investors and clients. That's something a lot of firms are missing."
Others agree.
Steve Winks, a principal with SrConsultant.com, a consulting firm, said the kind of support and autonomy that Hutton gave its pioneering money management unit has never been replicated in the industry. "If that sort of latitude existed [among brokerage firms]," he said," this industry would be far more advanced," Mr. Winks said.
By his lights, resurrecting the Hutton brand is "genius."
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