Billions in client assets on the move

Hundreds of financial advisers switched firms this year, many looking for opportunities to build equity in themselves and some exiting after mergers. Many were also lured by big bucks, according to recruiters and industry experts.

Hundreds of financial advisers switched firms this year, many looking for opportunities to build equity in themselves and some exiting after mergers. Many were also lured by big bucks, according to recruiters and industry experts.

At least 206 teams of advisers — managing a total of $68.3 billion in client assets — moved to another company or created a firm in 2010, according to data collected by InvestmentNews.

The data, which are gathered in the InvestmentNews.com’s Advisers on the Move database, do not include all adviser moves for the year; they track the movement of representatives with at least $20 million in client assets.

In the biggest move of 2010, financial adviser John A. Pickett and two other team members left RBC Wealth Management, where he managed $8.5 billion in assets, to join CapTrust Financial Advisors in June.

“There was nothing negative at RBC,” Mr. Pickett said last week . “My clients needed greater support from a firm that focused on the fiduciary market.”

CapTrust has a 22-member re-search group that helps advisers analyze investment managers, products and general solutions for clients, he said.

The firm’s researchers also complete projects such as manager searches and asset liability studies, freeing up Mr. Pickett to spend more time with clients.

“Clients are more sophisticated today,” he said. They demand more from advisers, and a specialty firm such as CapTrust is better-positioned to offer guidance in such a changing environment, he said.

RBC Wealth Management spokes-man Chris Nietupski said it was his firm’s decision “to have John Pickett move on.”

“Mr Pickett’s institutional consulting business was the only one of its kind in our firm and did not match up with our wealth management platform,” he said.

This month, Michael C. Brown departed from Bank of America Corp.’s U.S. Trust unit, where he managed $5.9 billion in client assets, to join Dynasty Financial Partners LLC.

Mr. Brown’s typical client had a net worth of $50 million, according to Barron’s, which ranked him 28th on its most recent list of the top 100 U.S. financial advisers.

“Financial advisers leave for two reasons: money and discontent,” said Eric Gershman, president of Consultants Period Ltd. “We’re seeing a lot of discontent and a lot of money.”

Typically, discontent has arisen from changes at firms as a result of the financial crisis, along with a raft of mergers and acquisitions.

Advisers remaining at “changed firms” often feel as if they don’t have a say in the company anymore, Mr. Gershman said.

“The people who hired them are no longer there,” he added. “The money is there now because all firms are having such a horrible time recruiting that they have moved their [pay] needles” to spend more to attract advisers.

Wirehouses are not the only firms struggling to attract them. Independent advisory firms and regional broker-dealers have seen a slowdown in recruiting, experts said.

But fewer than half the advisers who leave a wirehouse join another, according to recruiter Danny Sarch

“Big brokerage firms have done an unbelievable job of destroying employee and client loyalty,” he said.

For advisers who do join wirehouses, “the draw is the money,” Mr. Sarch said, as well as “big brands and terrific platforms.”

In November, UBS Wealth Management Americas hired a three-adviser team from Morgan Stanley Smith Barney LLC. Roger Stephens, Dan Rothenberg and Theodore Fisher managed $2.1 billion of client assets at Morgan Stanley.

UBS Wealth Management, like most advisory businesses, landed on the list both as a recipient and loser of advisers during the year.

The U.S. advisory unit of UBS AG shed a total of 500 advisers over the 12-month period ended Sept. 30 as part of chief executive Bob McCann’s realignment strategy, said spokeswoman Karina Byrne.

Assets under management over that period grew 1% to $765 billion.

The firm now has 6,783 advisers, down from a height of 8,000 after acquisitions of PaineWebber & Co. in 2000 and McDonald Investments Inc. in 2007.

It acquired the retail and private-client units of Piper Jaffray Cos. in 2006.

Mr. McCann wants UBS Wealth Management to have between 6,500 and 7,000 advisers so its advisers can have a global reach but be flexible enough to operate like those of smaller firms, Ms. Byrne said.

E-mail Liz Skinner at [email protected].