Tag Archive for: Advisors

Rockefeller Keeps Winning Big Team ‘Bake Off’s’ – We Tell You Why

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The Rockefeller name burst on to the scene in earnest when Greg Fleming left Morgan Stanley and was announced as the firm’s leader. The two names resonated across the wealth management spectrum, as did the whispers of the deep and heavy pockets Rockefeller was rumored (and of course confirmed) to be armed with at the time. The two (Fleming and Rockefeller) seemed to be well suited as a pair, and that has unquestionably been the case.

Besides Mr. Fleming’s resume’ and presence at the firm, what is it that continues to draw the largest of wirehouse firms to the name? We’ve spoken to a number of advisors and the answer seems to be three-fold, and once explained, somewhat obvious. Take a look at what we’ve been hearing throughout 2020 and judge for yourself:

  1. Branding still matters, and the Rockefeller name resonates.Given the movement to both the RIA and independent space over the past decade (and there is no doubt that it has moved at scale and continued its momentum) one would think that a new entrant to the ‘full-service space would struggle. Case in point, FieldPoint Private, a firm with well-heeled management and a wirehouse like set up. The divergence between the two can initially be chalked up to branding. The Rockefeller name emits incredible gravitas and history. It is instantly recognizable in every corner of finance and wealth management. Nearly every advisor is aware of the who/what/where of Rockefeller, while most have no idea who FPP is. The name, the brand still matters in this business.
  2. Greg Fleming continues to keep the firm ‘up-market’.The commitment to essentially focus on large wirehouse teams has paid off in a big way. Each and every hire gets a resounding chorus of praise from the wealth management press and the Rockefeller story is told again. This was the initial HighTower model that started off well, but was too quickly discarded – principally because HighTower wasn’t capitalized to the extent that Rockefeller is and will continue to be. HighTower abandoned the strategy and ended up with three different platforms and payout structures; effectively abandoning the branding story it had built. Rockefeller and Greg Fleming have stayed committed to the script.
  3. Advisors that have joined the firm and are deep into due diligence and evaluation tell us that Rockefeller’s tech and the platform are second to none.In an age where advisors are more closely tied to their laptops and mobile devices rather than their desktops to service clients, the tech at the firm that they join is incredibly important. Every single advisor that has had any depth of contact with the firm has extolled their commitment to technology. The term ‘ease of use’ comes up often when the conversation turns to tech with respect to Rockefeller.

The themes here are heavily weighted toward branding. If you are a team of size at UBS, Merrill, Morgan or Wells you are aware of Rockefeller and have either been watching them closely or are engaged in evaluating them as a potential landing spot. Their deal is robust and they know it. Their brand is robust and they know it. That institutional level of confidence is appealing to Barron’s/Forbes types of advisors. They want to be around winners – and Greg Fleming is just that.

He’s also closer. When Rockefeller is involved in competitive recruitment, they usually win.

“This business is mostly based on ‘do I like that guy’…” – Roger Sterling, Mad Men.

 

During COVID-19 Chaos Big Teams Accelerate Moves To New Firms; Want To Know Why?

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If it seems like larger and more frequent recruiting headlines to keep hitting the tape, you are viewing the wealth management landscape correctly. Each and every week hundreds of millions, if not billions, in client assets are filling out asset transfer paperwork on Saturday and Sunday across the country. And there is no slow down in sight.

The wirehouses continue to be hit hardest as advisors are either opting for perceived greener pastures at a rival firm or setting up their own shop as masters of their inside an RIA aggregator of note. The mass exodus remains real and ongoinG, no matter what firm brass at places like UBS and BofA/Merrill Lynch would have you believe.

But we are more interested in why these moves are occurring now…and accelerating in the midst of COVID-19 and historic market volatility. We think the following four dynamics are fueling the recruiting market and have tipped the scales in the question.

  1. Practice valuations and client balances (AUM) are at historic highs.The thought process here is that with client balances at or near all-time highs, annual production levels are bloated in ways the industry has never seen before. T12 numbers and their multipliers are extremely ripe and perfectly situated to capitalize on the next dynamic in this list. Advisors would be well advised to take advantage of the gift that the markets have given them.
  2. Recruiting deals are at all-time highs and almost artificially outsized for big teams.The competition for teams of scale is as fierce as it has ever been, and deals reflect that competition. At both Wells Fargo and First Republic, when including deferred compensation balances and choosing to retire at those firms, the numbers can surpass 500%. Yes, you read that right. Deals are more apt to retreat from these levels than to press much higher – another reason why big teams are hitting the bid.
  3. Expired Deals.Every advisor and team that mattered during the financial crisis has had the deals they signed back in 2010 (either to stay at their firm or in a move to a new firm) expire. Everyone is a free agent and evaluating the best way to play out the rest of their career – both philosophically and by way of monetizing their book. Besides the two firms that exited protocol in UBS and Morgan Stanley, most advisors are completely legally detached from their current firm.
  4. The COVID-19 effect is real and a significant advantage for transitioning to a new firm.At the outset of the pandemic most thought that the chaos and market turbulence would stifle recruiting movement. Just the opposite has been true. Clients that have stayed home from work are more available to discuss moves and sign transition paperwork virtually; while advisors deal with fewer colleagues attempting to keep their clients at the firm they are leaving. In terms of the drama of the first weeks of a transition, COVID-19 has become an easy off-ramp for exiting advisors.

Doing a serious evaluation of the tent that you find yourself under as an advisor is an absolute must right now. With so many deals stretching beyond 300% and production and asset levels at historic highs, big teams will continue to leave. Considering the factors above and the cover for a transition, you should be doing your own evaluation right now.