Former UBS Stalwart In LA Shifts To Wells Fargo; Michael Goldfader Takes Private Wealth Post

Wells Fargo continues to step on the gas with respect to recruiting across the US. Reaching into the management ranks to bolster long term recruiting, the bank continues to burn the candle at both ends to ensure, at some point their client assets under management and advisor headcount ticks higher, rather than several quarters of negative results.

To that end the firm has hired Michael Goldfader (Goldie as he’s known to his colleagues in the business) to head up several offices in the greater LA area committed to UHNW clients i.e. private wealth.

Per media reports:

“Goldfader, who left UBS in December after more than 20 years, joined Wells’ “private wealth” unit on Thursday. It was created about a year ago to service high-net-worth clients of bank branch-housed advisors, and includes brokers who transferred from Wells Advisor’s traditional private client group.”

“Goldfader is a 28-year industry veteran who was among many managers displaced by a series of UBS wealth management reorganizations last year and early this year. He had managed eight offices for the wirehouse, including a Beverly Hills branch.”

Goldfader (and others) was a casualty in the UBS management purge late last year.

“Complex managers Michael L. Goldfader in West Los Angeles, Peter B. Kaldis in Northern Ohio, and Robert L. Karem, who oversaw four private wealth management offices from Atlanta, are being shifted, they said. They have worked in the brokerage industry for 28, 34, and 41 years respectively, with each spending at least half of their careers at UBS and predecessor PaineWebber.”

There is a glut of management talent on the market right now and it is a buyers market. The smartest hires in the largest money center cities will have the biggest impact long term. Mr. Goldfader falls directly into that category. We eagerly anticipate the type of recruiting results we expect to hear from his crew in the coming months; because that’s precisely why Wells Fargo hires him.

NUMBERS CRUNCH: Wells Fargo Wealth Unit Profits Still Sliding, Defecting Advisors Now Number 1500

Wells Fargo continues to be as committed as any firm on the street to recruiting financial advisors into its ecosystem. The numbers associated with their traditional brokerage offer makes that very clear. Crystal clear. If you are a tenured advisor and want to take down the ‘biggest deal on the street’ hit the bid at Wells Fargo.

And yet, the firm continues to sputter in the wake of the three years mature opening of fraudulent customer accounts scandal. The reality of those headlines have been a deep hole to dig out of; and the firms latest earnings announcement proves that even further. The wealth unit (and this is pre-COVID 19) saw profits drop another 20% and the total of defecting advisors now stands at 1500.

Per media reports:

“Wealth and Investment Management, the smallest of Wells’ three business sectors, earned $463 million in the quarter compared to $577 million in the year-ago quarter. The division, dominated by the bank’s Wells Fargo Advisors brokerage unit, was, uncharacteristically, the most profitable of the bank company’s three businesses. It comprised 71% of its parent company’s $653 million profit in the first quarter compared to just under 10% a year ago.”

“While the effects of the coronavirus crisis will surely dominate all earnings reports—Wells is the first bank with a major brokerage division to report—Wells Fargo Advisors made progress in stemming departures from its advisor force and in attracting newcomers. It ended the quarter with 13,450 advisors in its employee and independent brokerage channels, down a relatively modest 62 from three months earlier and off 3% from 12 months earlier.”

While the negative momentum has continued to slow, the reality is still in the numbers. And the next couple of quarters may be even worse, as the effects of the coronavirus show up on balance sheets.

Wells Fargo would be well advised to keep pushing through and recruiting their asses off. New client assets, rather than a rising stock market, is the only way through this mess.

RBC Snaps Up Wells Fargo Advisor; Adds $350M In Client Assets Amidst Coronavirus Turmoil

While wealth management recruiting may have predictably slowed of late, the gears have not completely grinded to a halt. Amidst a market downturn and changes to office and social distancing policies, the need to add assets and production to branches and complexes across the country remains

Select recruits and the firms welcoming them are taking advantage of the current environment and moving client assets at a quicker pace than normal. Clients are largely stuck at home with more time on their hands and fewer distractions, freeing them up to make decisions about transferring their accounts to a new firm and following their advisor wherever he/she has chosen to migrate.

Case in point, a move from Wells Fargo to RBC: Nancy Anstoetter, an advisor of 32 years. Anstoetter managed $350 million in assets at Wells Fargo Advisors, her employer since 1999, according to FINRA BrokerCheck records. Her move to RBC is another in a long line of wins for the firm that remains aggressive in recruiting at the moment.

In a conversation with an RBC executive last week it was obvious to us that the recruiting push will continue and why the message is resonating with advisors:

”What I’ve seen time and time again is a return to an environment where advisors are empowered. Instead of mandates to earn a reasonable payout forced on them, they have an opportunity to transact business in ways that work best for their clients and their business. Then you work your way to things like the firms balance sheet, etc.”

Whatever the cause for the firms continued success in recruiting advisors of distinction they are determined for it to continue. No longer considered a ‘regional’ firm, RBC represents the ‘new national’ breed of firms offering advisors friendly confines.


UBS Profit Surprises Amidst Pandemic Reality; Go Forward Dialogue Is Realistic

UBS hit the reset button about 9 months ago both here in the US and overseas. New leadership, new initiatives, and specific to wealth management, a renewed push into recruiting big teams.

All of that now has a backdrop that has them announcing an upside surprise in earnings. It seems that the new leadership transition and diving back in to recruiting top talent has paid off.

As markets tumbled and much of the world headed into lockdown, profit at the world’s largest asset manager rose by roughly a third to about $1.5 billion, well ahead of analysts’ estimates and the highest since the second quarter of 2018. Business was strong across the board, and capital and leverage ratios are in line with targets even after accounting for an increase in credit risk, the bank said.

At the same time, UBS and its crosstown rival, Credit Suisse Group AG, said they’d withhold part of their 2019 dividends until the second half, acknowledging that the real test for the financial system won’t come until later. The firms, acting at the request of their supervisor Finma, are among the last European lenders to delay payouts following regulatory relief.

“Our financial strength well above regulatory requirements and prudent risk management allow us to deliver on our current capital returns policy,” Chairman Axel Weber said in a statement. “Nevertheless, at Finma’s request, we have adjusted the 2019 dividend payout proposal given the high and unprecedented uncertainty.”

The adjustment to dividend payouts isn’t surprising given the global coronavirus pa remix and ensuing economic realities. Still, UBS looks, sounds, and feels like it is on the right track.

Paperwork Pinch: FINRA Slams Morgan Stanley Advisor For Paperwork Infractions

If you think the compliance and regulatory nerds at FINRA are slowing down during the COVID-19 pandemic and market downturn, think again. If anything there computer screens, glare-fix glasses, and spreadsheets are running even hotter – knowing that an increase in both customer complaints and advisor infractions are a virtual certainty given the current wealth management climate.

The ‘work from home’ mandate that has essentially stretched across all of wall street and main street is a fertile ground for a cut corner here and a document fudge there. Those cut corners are probably even being encouraged by clients who would rather you handle the details right now then have to meet and do them themselves – you know, the whole social distancing deal. So asking an advisor to finalize a document that has already been signed by the client seems like a meaningless issues, or even helpful at this point. Don’t be that stupid – FINRA staff is waiting for you to make that mistake.

Just ask Claire Cail of Morgan Stanley in Manchester, NH. She just got pinched by FINRA for filling out portions of client documents that the client had already signed. Oof.

Per media reports:

“Claire M. Cail, a former Morgan Stanley broker in Manchester, New Hampshire, altered signed account documents from eight customers by filling in missing information such as an address or telephone number or checking a beneficiary box, the regulator said in a letter of acceptance, waiver and consent that Cail signed without admitting or denying the findings.”

“She also filled out new account and beneficiary forms from a prospect who Morgan Stanley previously rejected by combining them with a prior signature page and submitting them, according to the document that Finra posted on April 2.  The actions caused the firm to violate Finra’s books-and-records rules by maintaining inaccurate data, while Cail violated the regulator’s sweeping Rule 2010 requiring registered reps to observe “high standards of commercial honor,” Finra wrote.”
Read that again and beware the requests of clients who simple don’t know that rules you are to abide by, nor do they care. They simply want things done when they want them done. Clear conversations need to be had, especially in the midst of serious and unique stress, to cover your ass. Or FINRA will take it!
And here is the most distressing part of this story – Ms. Cail didn’t have a single complaint or or disclosure on her record after 25 years of service in the industry. 25 YEARS. Do a client a favor during a pandemic and you will get your legs cut off at the knees. Be very, very careful out there right now; the rest of your career may depend on it.

Morgan Stanley Team Bolts For Ameriprise; Phelps Hamus Group Switches Jerseys In Wisconsin

And just as we suspected the recruiting wheel continues to turn and churn – with an interesting assist from the current events. A Morgan Stanley team left for Ameriprise in Madison, WI last Friday and took with them nearly $1.8M in annual revenue and better than $200M in client assets.

Ron Phelps founded the Phelps Hamus group at Morgan Stanley in 1996 and later added partner Jacob Hamus. Mr. Phelps is a Decorated Veteran of the United States Army and has even authored a children’s book, “The Stealth Dog”. Mr. Hamus started with Morgan Stanley as an intern in 2007 and became a full-time advisor in 2010. Together, with Senior Client Service Associate Wendy Campbell and Registered Client Service Associate Lyam Hunt – the team can claim better than 50 years of service in the world of wealth management.

It is unclear whether or not the Phelps Hamus Group chose the employee or independent channel at Ameriprise. The moment we have those details we will get them to you.

What is true and is of interest – given the timing of this move and the shutdown that exists across the country – they won’t be dealing with a TRO from Morgan Stanley anytime soon. With courts largely closed to anything but clear emergencies at this point the ability for Morgan Stanley attorneys to appear before a judge and be granted a TRO (based on the firms non-protocol status) is essentially zero.

As discussed at the end of one of our articles just yesterday, for advisors leaving non-protocol firms like Morgan Stanely, UBS, or J. P. Morgan the current legal climate works in their favor. Sure, the state of the markets and coronavirus itself are their own separate issues, but short-term this is a green light for some advisors.

Ameriprise Capitalizes Amidst Chaos: Adds 19 Advisors/Teams, And More Than $1.5B In Client Assets

We told you that recruiting wouldn’t slow down during the coronavirus and market correction disruption. If fact, we’ve alluded to the reality that there are real advantages to moving a practice of any scale with competitive former colleagues out of the office, courts closed (avoiding TRO’s from non-protocol firms), and clients who are largely stuck at home and readily available to e-sign transfer documents and have elongated conversations.

So, enter Ameriprise and the news that they’ve on boarded 19 practices in just the past three weeks. A little ‘guesstimated’ math puts the tally at better than $1.5B in client assets – and that number may very well be a bit light. Several names associated with moves to the firm are: Rob Bacino, Marty Mitchell, Simon Wheeldon, Craig and Chad Wilson, Samuel Bartoletta, Scott Kelly and Matthew True, and several others.

Firms that Ameriprise was able to pull advisors away from include: Morgan Stanley, UBS, Raymond James, LPL, Wells Fargo and others. Essentially appealing to the entire swath of both firms and platforms that Ameriprise competes with on a daily basis.

Speaking to a source at the firm they laid out the reasons some of the names above gave for switching to Ameriprise in general and in the midst of the current chaos:

“Most of the reasons that advisors have wanted to leave to join Ameriprise haven’t dramatically changed, rather the impetus intensified a bit (looking for better support, technology, resources). The fact that clients are home and receptive to conversations have made transitions more successful; the rate of asset transfer has been extremely high. Overall, our technology, virtual capabilities, and best in class on boarding process remains a compelling story. We’ve also remained very mindful of advisor and staff safety during these transitions – but are staying aggressive and open for business.”

And the numbers above speak for themselves. Moving that amount of bodies in the midst of a pandemic is a credit to the staff and recruiting leadership at Ameriprise. It is difficult enough to pull off successful transitions in ‘normal’ circumstances – but to be doing it now is remarkable.

Expect more recruiting stories to find their way to these pages and the volume to continue to increase across the industry. The benefits are starting to outweigh the obstacles.

Maybe The Time Is Now: Does A Volatile Market And Coming Changes Provide An Easier Exit Plan?

The life of a financial advisor has a certain trajectory. As a ‘rookie’ you will generally take anyone and everyone, no matter the product and services they require. Assets and household counts matter. As your business matures most advisors pivot to a pure assets under management strategy. Gather as much AUM as you can.

But what if you’ve successfully navigated those initial stages and are looking to the second half, or twilight, of your career. How can the makeup of your book serve to maximize your value as a financial advisor?

We think there are five key points that will maximize value in the best possible way, here they are:

  1. Maximize total assets under management. A book of business that crosses the likes of $100M all the way up to $500M are immensely valuable. Beyond the $500M number you usually find yourself associated with institutional level assets that may serve to draw down your pure value ratios.
  1. Do more than annuitizing those assets. Turning commission into annual/quarterly fees has been around for more than a decade. That is the easy answer. Is that annuitization diversified across several asset classes, and more importantly, across two generations? Having annuitized relationships with those that will be holding the assets in the next generation makes your book incredibly valuable.
  1. Have a squeaky clean compliance and enforcement record. We’ve covered this point in other articles, but you should keep outside counsel on your personal payroll. Any settlement, slip up or otherwise will hammer away at the value of your book. Not only should you do the right thing in terms of compliance, but you should have a plan to protect your reputation at all costs.
  1. Be as visible as possible within the industry. Marketing yourself as an expert in a niche area of wealth management will serve to increase your books value long-term. Whether it is a podcast, internal presentations at company events, recognition clubs, local speaking engagements, radio, etc – do it and do it well. That visibility will increase the value of your book.
  1. Build a team focused on building relationships. The team you build to service clients should be as diverse as possible. Age, gender, race – each of these boxes should be checked to service the largest percentage of the population in the HNW and UHNW pools. The value of your book will only benefit from a diverse and effective team; a team focused on building relationships across all manner of demographic lines.

All of the above takes time and commitment. Not only are you building a business focused on people and one of the (if not THE) most important issue in their lives, but you are navigating the legal and regulatory landscape as well.

Gathering assets and building a book is hard enough. Doing it while building a ‘brand’ is just as difficult. But if you can pull it off you will be the ‘belle of the ball’ when it comes to valuation.

Do you monetize via recruitment to a rival firm, or sell your book on the open market in the RIA space?  That’s a question for another day.

Merrill Lynch Team Jumps To Raymond James; $900M Team Moves And Takes Advantage Of Pandemic Opportunities

Neil Goetzman and Jeffrey Nau have joined Raymond James Financial Services, the firm’s independent broker-dealer, in Alexandria, Va., as Goetzman Nau Financial Partners, according to a press release from the company.

In a move that contains legal protections because of the COVID-19 outbreak instead of in spite of it, teams are moving in the hopes that empty offices at their previous firm will slow down calls to their clients from former colleagues. Another benefit beyond just closed courts for those exiting non-protocol firms.

Goetzman started his financial services industry career with Merrill Lynch over 30 years ago, while Nau began his industry career with the wirehouse in 1999, Raymond James says.

“What impressed us is the firm’s focus on its wealth management arm and its support of advisors — that’s at the center of everything at Raymond James,” Goetzman says in the press release. “It’s clear their resources are designed with advisors in mind and that the support staff and functions throughout the firm are not only knowledgeable, but also extremely accessible and willing to help.”

The team, which also includes financial advisor Gerald Lyon — who also began his industry career with Merrill Lynch, in 2006 — and registered client service associate Kathy Trzaskoma, previously managed around $900 million at Merrill Lynch, Raymond James says.

Taking advantage of the current state of play in recruiting is of significant interest in conversations we are having across wealth management. Managers and executives are stepping up conversations with recruits, and deal makers are getting creative.

As the pandemic continues and WFH policies remain, expect more and more teams to be comfortable moving to new firms given the inherent advantages.

Paperwork Jurisprudence: Morgan Stanley Recruits Are An Example Of How Not To Transition

Recruiting is a chess game that is played in the ‘high stakes’ room of every wealth management organization we cover. Management, legal, compliance, regulatory, and then the advisors themselves are walking a tightrope from start to finish. you want proof? Below is a reminder of how the smallest of mistakes can literally fire bomb your career. Read on…

If you needed any further proof that dancing with a leviathan like Morgan Stanley is a dangerous game, just ask former brokers Christopher Armstrong and Randall Kiefner. There careers have been flipped upside down and inside out.

They recently left Charles Schwab for Morgan Stanley in a somewhat celebrated transition. Morgan Stanley was happy to promote the move and talk about AUM and the newest advisors in New Jersey and Florida.

But that tune changed quickly. Morgan Stanley fired the duo three weeks later when Schwab filed suit and a TRO based on paperwork printed out by the duo when leaving their former firm.

You can imagine the kind words and promises that were exchanged during the recruitment. Of course Morgan Stanley’s in house counsel took a scalpel to their Schwab employment contracts and probably even provided guidance on how to transition. All manner of ‘we got your back’ discussions were surely had.

Except, they didn’t.

Now the two advisors, who pushed the print icon on their Schwab desktops for 15-ish clients are now looking for work. Neither Schwab or Morgan Stanley has the ‘best interest’ of these men or their clients in mind. Instead of assisting in a short and relatively simple legal fight they deemed it easier to send them packing with a swift kick in the ass. Thanks.

The moral of the story here is this. Be careful, very, very careful with whom you choose to get in bed with these days. The deal may look appealing and the promises (not on paper mind you) may sound great; ultimately you are held responsible for your career. It may help to see these firms as a means to an end, and not true partners. Maybe not adversaries, but legal entities to be carefully considered before tethering oneself to for the next decade of your career.

What a disaster this is for these two guys. Maybe a tip to the two of them, and other advisors about to transition. Please familiarize yourself with encrypted messaging apps like WhatsApp, Telegram, or even Snap. Ask your teenage kids how it’s done. Oof.