Tag Archive for: First Republic

Merrill Can’t Stop the Bleeding – Another $3 Billion Gone in the First 3 Weeks of 2023

The deal with bloodletting is that it is supposed to cure a problem, is that what Andy Sieg thinks he’s doing? After massive AUM and revenue losses in 2022, Sieg is starting the year off with a bang with another $3 billion gone in just the first few weeks of 2023. I’m sure the podcast with Mindy helped.

The teams. David Mohamed and Justin Merola from Wellesley Hills, MA took their $8 million in revenue to First Republic Bank, perhaps the direct bank referrals are not only useful but lucrative. Alex Ladage, David Landon Smith, and Jorge Garcia in Austin, TX moved their $7.5 million in revenue and $900 million in AUM to Rockefeller Capital Management. Mark Karstaedt, Daniel Zomback, and Raymond Lin of New York, NY moved $2 million in revenue and $400 million in AUM to JP Morgan Advisors. Jeffrey Klinger and Bradley Quinn in San Francisco, CA moved $7 million in revenue and $1 billion in AUM to UBS. While two of these moves are still too big financial firms, what is clear is that the exodus at Merill just won’t stop – no matter where it is to.

Roger Gershman of the Gershman Group worked with Mr. Klinger at Credit Suisse, he stated “Jeff is a top-notch advisor, Merrill should be ashamed to put pressure on the best advisors to leave for other shops.  Best of luck to all the teams leaving Merrill.”

As we’ve covered extensively, advisors are leaving Merrill in droves for a number of reasons from grid and bonus cuts to creepy culture, to pushing products the bank wants sold, to playing to the lowest common denominator with firm established model portfolios. If advisors don’t fit the model, the firm wants them out and has made it downright impossible for many to continue their practice in the way they see fit. It will be interesting to watch the numbers to see just how much Merrill will lose in 2023. Any guesses?

The “Candid” Interview You Wish You Heard

A few days ago Mindy Diamond hosted a “candid” interview with Andy Sieg, The President of Bank of America Merrill Lynch. In that interview many were disappointed with the questions asked and more importantly the answers. In this episode we answer without bias – understanding what the firm is actually going through as we speak with many advisors, managers and those close to the situation.

Roger Gershman is the CEO of The Gershman Group and has a wealth of experience in financial advising and asset management. Roger brings a unique advantage to the world of financial services recruiting. Having spent twenty-five years himself as a financial advisor at Hambrecht & Quist, UBS PWM, and Credit Suisse, Mr. Gershman brings a unique perspective to the recruiting and consulting world of financial advisors. He has built profound relationships through the generations and has fostered deep relationships with his clients on both the broker and management sides. He upholds the reputation of The Gershman Group by continuing to provide valuable consultation and advice to transitioning financial advisors.

 

Originally published on: https://thegershmangroup.com/the-candid-interview-you-wish-you-heard/

 

0:00 Intro

0:24 Why Would Andy Speak With A Recruiter?

1:29 Is He The Culture Bearer of ML?

3:18 Ultimate Culture Degradation

5:30 Why FAs Are Leaving? 7: 57 The Model is Broken

11:10 The Shift to Private Banking

14:32 End of Entrepreneurship

15:08 Why Restart Recruiting?

17:36 “Join a Team!”

20:33 What ML Advisors Can Expect?

22:38 It’s Your Clients (.)

23:26 Closing Remarks

First Republic Starts 2023 with a Bang

First Republic has just signed three big-name wealth management teams to its roster in one week’s time to kick off 2023. First, an $11 million in revenue/$1.8 AUM BNY Mellon Boston-based team led by Brenda Travaglini, Michael Corcoran, Dennis Murray, and Dan Gallagher along with three staffers. All four with substantial years under their belt with BNY, Travaglini with 37 years, Corcoran with 34 years, and Murray and Gallagher each with 20 years at the firm. To leave the firm with this many years of service and a salary plus bonus must have been for something special as we’ll get to in a moment.

The second move, is a four-person Morgan Stanley team led by Eric Yamin with 35 years in the business, and Keith Caparelli with 10 years. The $7 million revenue/$ 700 million in AUM team serves clients in New York and Florida. The third movement, the $8 million Wellesley Hills, Massachusetts-based Mohamed-Merola Wealth Management team left Merrill Lynch also for First Republic. Derek Mohammed and Justin Merola each had been at Merrill for 7 years and previously were both at UBS and Morgan Stanley respectively.

Roger Gershman of the Gershman Group, familiar with the teams stated, “First Republic is undeniably a great consideration for advisors on the coasts serving the UHNW client with private banking needs (including direct referrals), the extremely competitive compensation plan is clearly luring advisors to the firm, one after another.”

What is behind these moves and First Republic’s ability to now have amassed 200 top advisors representing over $195 billion in AUM? In 2022 alone, First Republic recruited $12 billion in new AUM.

The upside?

One, First Republic is a premier private bank with pristine UHNW relationships. The bank has been able to negotiate the banking – wealth management relationship well. Some might see this as a negative if they want to be separated from the pressures that come with a bank, some view it as a positive.

Two, the First Republic model allows some freedom and is more entrepreneurial in nature than the firms advisors are leaving yet it isn’t a “go it alone” setup for advisors who don’t want to establish their own RIA firms.

Three, the bicoastal footprint of First Republic works for advisors serving clients in those areas, it might not serve advisors well in the rest of the country.

First Republic on a Shopping Spree

We all know the story of David and Goliath, in the world of finance, we’re observing the story play out routinely as boutique firms continue to capture some of the biggest wealth management teams away from the big guys, and at that, primarily from Merrill Lynch. Just this year, First Republic has moved 10 teams averaging between $3M-$15M in team production which is the 4th consecutive year of monster moves.

How are they doing it? The answer is 3-fold. 1) premiere teams at Merrill are unhappy with big bureaucratic firm culture (or lack thereof) asking them to do business in a manner that goes against what made them successful in the first place. Big mistake.

2) FRB has a very competitive, high-touch, platform offering the same and more products and services than ML. 3) For the right fit, FRB lures teams with the highest on-record terms upwards of 400% along with direct referrals to private banking customers. At First Republic as of Sept. 30, 2022, the firm is managing $249.5 billion in assets and growing dramatically. 

Two More Top Teams Leave Merrill for First Republic

To put a point on it, two more large teams have just left Merrill for First Republic. NYC based VK Wealth Management, led by Laszlo (Paul) Vasady-Koracs, a 21-year veteran who was just on the Forbes 2022 list of the Best Wealth Management Advisors, has left with his entire team for First Republic. Mr. Vasady-Koracs joined Merrill in 2017 but clearly, the big firm couldn’t compare with what First Republic could offer his team including Jay Goldstein, Christian Martinez, Dana Shaker, and Sean Hanigan. So goodbye to you Merrill from a $7 million dollar team that managed $900 million in assets. 

Of course, this team was not alone in the needing to leave sentiment. Just weeks ago First Republic Bank’s landed a huge Merrill team that had been generating over $12 million in revenue in the wealthy suburbs outside NYC.

The group, which had overseen $2 billion in client assets, is led by Harold “Hal” Reinstein and Michael T. Nelson and joined First Republic’s Scarsdale, New York branch from a Merrill office in nearby White Plains, they moved along with three other advisors–Daniel Sirota, Pascale Hainline and Kimberly Ferry–and four support staff. As testimony to the point, Reinstein had been with Merrill for the last 26 years, according to and  Nelson was a 23-year Merrill lifer.

The question remains, will Andy Sieg at Merrill decide to alter course, relying solely on a big brand BOA name, or will decisions be made to stop what is not just bleeding, but rather hemorrhaging?  Roger Gershman, CEO of The Gershman Group, who is familiar with both teams and has recruited heavily to First Republic stated that, “stupid is as stupid does, you’d think Andy Sieg would be thinking twice about gutting Merrill of its best practices that have made the firm what it is, but this just isn’t so. We’re seeing a lot of curiosity and forecast more and more moves closing out 2022 and into 2023.”

So why doesn’t First Republic buy Merrill in whole? Because they don’t have to and only picking off the cream of the cream advisors. 

Curious about all the moves and what might be right for your team? Check out our deal section and let us know if anything looks interesting.

 

(Yet Another) Merrill Exit – This Time $15M in NY

Merrill Lynch seems to be playing an ugly game of “Taureau, Taureau” with its top wealth management teams and financial advisors. Adapt to the new strident culture or don’t. It’s too bad that the strength of the bull that Merrill has been known for has its best people running for better brighter horizons. The departure of White Plains, NY-based Reinstein Nelson Group for First Republic is yet another important departure of a highly regarded and awarded team. 

Roger Gershman, familiar with the team remarked, “the Reinstein Nelson Group got a phenomenal deal with First Republic as we watch the stampede out of Merrill Lynch. Maybe Merrill will wake up and begin to understand how important culture and those that have served the firm for years over years are, or not. First Republic clearly cares about talent and culture, not to mention high touch service. The returned focus on banking at Merrill isn’t paying off.”

The nine-person team had been with Merrill since 1998 and is led by Managing Directors, Harold Reinstein and Michael Nelson who’ve been chosen by Forbes as the “Best-in-State Wealth Advisors” for 2018, 2019, and 2020. Other members of the team are: Daniel Sirota, Senior Vice President and Senior Financial Advisor, Pascale Hainline, Senior Vice President and Senior Financial Advisor, Kimberly Ann Ferry, Senior Vice President and Senior Financial Advisor, Mary Jane Wolfson, Assistant Vice President and Investment Management Specialist, Amanda McNulty, Senior Wealth Management Client Associate, Oleg Zubarev, Wealth Management Client Associate, and Erika Jenkins, Wealth Management Client Associate. 

Throughout the years advisors on the team have been recognized by: 

  • Barron’s Top 100 Financial Advisors
  • Financial Times 400 Top Financial Advisors
  • Financial Times 401 Top Retirement Advisors
  • Forbes Top Women Wealth Advisors
  • Forbes SHOOK Best-in-State Next Generation Wealth Advisors
  • And more…

Perhaps First Republic will allow the team to continue to execute on the high client service model their clients have come to expect. 

BREAKING: ML Loses High Profile $1.7B NYC Team to First Republic

The Thundering Herd continues its exodus out the door with one of the most high-profile teams in the nation. As the very first landmark departures in the 1st week of 2022, The Hirsch Stabile Group overseeing over $1.75BB in client balances and $8.2M in revenue suggests there is much more to come out of Merrill.

Adam Hirsch and Stephen Stabile were not only highly recognized as one of the youngest fastest-growing “Under 40” teams (see below) but also recognized in Forbes Best-In-State Wealth Advisors 2021 list for the 3rd consecutive year (Forbes “Best-in-State Wealth Advisors” February 2019, January 2020, February 2021). In addition, Stephen Stabile joined Merrill Lynch Wealth management in 2004 and was a member of and keynote speaker for the Merrill Lynch Optimal Practice Management Faculty where he provided training for the firm’s advisors nationally. He also was on a select committee of key teams nationally that actively engaged with Andy Seig regarding strategy to re-build culture, retain talent, and further the interests of advisors practices.

Roger Gershman CEO of The Gershman Group was instrumental in their search for a culture that matched the team’s desire to be part of a boutique firm with a more sophisticated approach to wealth management, opportunity to grow, and the end client user experience to be much more high touch. Gershman says, “First Republic Bank is a world-class bank whose reputation is nothing less than outstanding among its commercial lending clients allowing advisors to be fed significant referrals for growth.” Not only is its platform robust rivaling most any wirehouse, but the service is also demonstrably better. The economic deal packages happen to be more than icing on the cake. Gershman says, “the deal packages offered to the ‘right team’ does not compare to most anything offered in our industry.”

Also, Adam Hirsch who joined Merrill Lynch Wealth Management in 2006 has earned multiple recognition awards including:
*Financial Planning’s “Top 40 Advisors Under 40” List January 2021.
*On Wall Street –“Top 40 Under 40″ January 2020.
*Forbes “Top Next-Generation Wealth Advisors” July 2019 and July 2020.
*Forbes “Best-in-State Next-Generation Wealth Advisors” in September 2019.

The move displays how deep the level of frustration with Merrill/ Bank of America’s direction and the changing culture there. Quotes one confidential sourced advisor, “the firm caters to the lowest common denominator advisor.” He says, “it is no longer Mother Merrill that nurtured me and my business and now it’s only the BOA shareholders who see me as just another number.”

Sneaky Good – First Republic Continues To Win Head To Head Battles For Wirehouse Talent

First Republic is no longer a secret among elite advisors. The banks’ wealth management arm has stacked up big wins from every corner of the wealth management map.

As of late, they’ve been particularly successful with two firms, Merrill and Lynch. In our conversations with advisors engaged with First Republic the word ‘culture’ comes up a lot.

Of course, culture matters, but so does the sizable deal First Republic offers elite advisors. Over a seven-year period, the FRB offer can go as high as 500%. Wow. And 200% of it can be had as you walk in the door moments after resigning from your old firm.

Back to culture for a moment – Merrill advisors continue to seek out the types of firms that feel like Merrill use to feel; exclusive, collegial, and entrepreneurial. FRB fits that bill well, so winning recruiting battles should continue.

Expect more advisors from the firms, Merrill and Lynch, to find their way to FRB. :)

Massive Merrill Team Jumps To First Republic; Phil Scott Group In Washington State Take $2.7B In AUM To New Firm

A massive move occurred in the Pacific Northwest last week. The Phil Scott Group out of Merrill Lynch made the move to First Republic. The numerics surrounding the transaction are eye-popping all around and sent shockwaves through BofA/Merrill in that part of the country.

First, Mr. Scott was a 36 year veteran of Merrill Lynch an absolute ‘thundering herd’ lifer. He joined the firm out of the Naval Academy in 1984 and seemingly never considered leaving. That all changed last week. Chatter in Seattle and the surrounding wealth management organizations was abuzz given the largess of Mr. Scott and his team.

The numbers are just are even bigger than the surprise move: $18M in annual revenue and $2.7B in client assets under management. A huge win for First Republic in the region. Doing a little napkin math – the total deal for the team given the revenue stated above will climb beyond the $60M dollar mark. Wow.

Mr. Scott is a Barron’s ‘Hall of Fame’ advisor and his Barron’s team bio reads as such:

“Phil joined Merrill Lynch in 1984 after graduating from the U.S. Naval Academy with degrees in International Relations and General Engineering. His extended tenure with Merrill Lynch is paralleled by that of his team members, many of whom have collaborated with Mr. Scott for more than 15 years. That continuity and consistency, Phil believes, allows the team to deliver an exceptional client experience.”

Pulling back to 50,000 feet – the narrative continues for Merrill Lynch, as they lose yet another huge producer and capstone in a money center city. As has been occurring for a number of years now, the largest producers are leaving the firm at a clip never before seen at Merrill. Choosing a name like First Republic is of real interest; but maybe more so is the reality that a 36 year veteran of Merrill finally decided the firm was no longer his home.