Hiring of financial advisers slows at First Republic in Q2

The bank's wealth management division has added just one team of advisers since mid-April, but it continues to see growth in new customers.

After reeling in 11 teams in 2021 and hiring another three to start this year, First Republic Bank’s wealth management division added just one group of financial advisers since its last call with investors in mid-April, said Robert L. Thornton, executive vice president at the bank and president of First Republic Private Wealth Management.

A destination for wirehouse brokers and advisers for the past decade, First Republic Bank’s wealth management division continued to see growth in new customers and households during the turbulent first half of the year, when the broad market indicator S&P 500 declining 20.6%, Thornton said Thursday during a conference call with analysts and investors to review second-quarter earnings.

Thornton remained sanguine about hiring more financial advisers in the near future, despite the current complexities of the market and the potential of a recession.

“We continue to see very strong inflows [of assets] from clients, and I think we’ll see some additional team hires,” said Thornton, who had been asked to give an assessment of the year’s second half for the wealth management franchise. “Obviously, the market will impact the business. As you know, we bill at the beginning of each quarter for our investment management fees.”

First Republic’s wealth management assets totaled $246.8 billion at the end of June, according to the company, compared to $240.9 billion at the same time last year, a 12-month increase of 2.4%. But since the beginning of this year, wealth management assets have dropped by $32.6 billion, or 11.6%.

“The decrease in wealth management assets for the quarter was due to market decline,” the company said in a statement. “The increase in wealth management assets for the year was due to net client inflow, partially offset by market decline.”

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