Rockefeller zeroes in on Merrill Lynch, Morgan Stanley advisers
According to InvestmentNews data, since Rockefeller Capital's launch in early 2018 to the end of March, the clear bulk of its hired advisers have come from CEO Greg Fleming's two former firms.
Greg Fleming’s deep ties to his former firms, Merrill Lynch and Morgan Stanley, are paying off at his latest venture, Rockefeller Capital Management, the wealth management firm he helped launch in 2018 and is the CEO.
A veteran of Wall Street management, Fleming worked at Merrill Lynch, eventually becoming president, up until it was bought by Bank of America in the deepest days of the credit crisis, from 1993 to 2009. A year later he went to work for Morgan Stanley and was head of wealth and asset management before leaving in 2016, two years before the launch of Rockefeller Capital.
And Fleming is building Rockefeller Capital by hiring financial advisers from his two former firms, both of which have some of the largest and most successful teams of financial advisers on Wall Street.
According to InvestmentNews data and research, since the firm’s launch in early 2018 to the end of March, the firm has recruited 142 experienced financial advisers from competitors. The clear bulk have been hired from Fleming’s two former firms: 64 from Merrill Lynch and 41 from Morgan Stanley, or 74% of Rockefeller Capital’s advisers, according to InvestmentNews research.
| Firm | Number of reps recruited | % of recruitment |
|---|---|---|
| Merrill Lynch, Pierce, Fenner & Smith Incorporated | 64 | 45% |
| Morgan Stanley | 41 | 29% |
| UBS Financial Services Inc. | 21 | 15% |
| Stifel, Nicolaus & Company, Incorporated | 5 | 4% |
| Wells Fargo Clearing Services, LLC | 4 | 3% |
| J.P. Morgan Securities LLC | 3 | 2% |
| Northern Trust Securities, Inc. | 1 | 1% |
| Raymond James & Associates, Inc. | 1 | 1% |
| Mercer Allied Company, L.P. | 1 | 1% |
| Axiom Capital Management, Inc. | 1 | 1% |
| *Since 2018 |
The next largest target for hires is UBS, with Rockefeller recruiting 21, or 15% of its total, over the past three years, according to the research.
It’s not clear as to what extent Fleming and his management team relies on personal relationships to hire advisers, but Rockefeller Capital is replete with former Merrill Lynch and Morgan Stanley personnel, industry observers noted. Its chief operating officer, Jason Rich, spent 17 years at Merrill Lynch and had a variety of jobs, including head of recruiting, before starting to work in 2019 at Rockefeller Capital.
Rockefeller’s hiring has been dramatic, even with the general business difficulties brought on by Covid-19. This February and March alone it hired two teams, one in Cincinnati, Ohio, and the other in Newport Beach, California, from Merrill who both managed $1 billion or more at their old firm.
Meanwhile, it appears that Rockefeller Capital is just getting started. Fleming this month at an industry conference said that Rockefeller is looking to grow primarily in the U.S. and may expand to as many as 20 more cities in the future, according to Bloomberg News. Locations under consideration include Colorado, Seattle, the Midwest, and Nashville, Tennessee, he said.
“The Rockefeller value proposition resonates with most wirehouse advisers,” said Louis Diamond, an industry recruiter. “At the high end, there is an incredible community of advisers and Rockefeller solves the problem of advisers having control and flexibility over business with a brand name that sticks out with both advisers and clients.”
Wirehouse advisers desiring less interference in the form of corporate mandates, such as a push to sign up clients for more banking products, is a common criticism of those institutions. “Rockefeller Capital Management is a smaller firm — and we always will be,” a firm spokesperson said in an email.
“Elite advisers” are drawn to Rockefeller for a variety of reasons, including its technology, investment platform and family office services, said the spokesperson, who did not comment about the firm’s focus on hiring of Merrill Lynch and Morgan Stanley advisers.
A spokesperson for Morgan Stanley declined to comment about Rockefeller, as did a Merrill Lynch spokesperson.
Backed by private investors, Rockefeller Capital is paying its recruits and new hires some of the most handsome deals currently in the wealth management industry, according to industry sources. The firm continues to pay recruiting bonuses of three times, or 300%, of an adviser’s or team’s annual revenues, called gross dealer concession in the industry, according to market sources. Those recruiting packages are paid over a dozen years or so and worked off over time by advisers, with 175% coming upfront, those sources said.
InvestmentNews first reported Rockefeller’s heady recruiting bonus in 2019.
While Rockefeller is paying its new hires handsomely, some of its competitors have publicly stated they are relying less on recruiting in large part due to its expense. “The recruiting deal is part of the equation, but Rockefeller resonates with the higher-end adviser,” Diamond added.
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