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UBS Exodus Continues with Steven Mitchell RIA Transition

On Monday, Steven J. Mitchell became the latest in an ever-growing list of UBS brokers to declare independence this year. Reuniting with former UBS colleague Phil Fiore, Mitchell joined the New York City office of Procyon Partners, an RIA established in 2017.

“I was always intrigued by the RIA and independent space,” Mitchell stated in an interview. That intrigue was no doubt enhanced by his new partner’s success. Fiore has grown client assets to over $3 billion in the past three years since he started the firm.

UBS isn’t crying foul over the move, but they are throwing some shade. Mitchell was discharged from the firm in May for failing to complete mandatory training modules. Fiore was asked to leave in 2016 after violating rules on disclosing client-related outside business activity.

Is this a case of two rogues banding together or a warning sign of systemic problems at UBS? Earlier this month, the multinational investment bank lost six wealth management brokers in three regions. Cumulatively, the six were managing roughly $800 million in client assets.

The Sensational Six UBS Defections in July
Christopher McAdoo and Richard W. Humphrey exited the UBS Clearwater, Florida office to join Steward Partners, an independent RIA that custodies with Raymond James. They were brought on board by Dean Hoover, another former UBS advisor who left in 2018.

Tyler McKean and Steven Hafner jumped ship in northwestern Ohio to join True Alpha Wealth Management. That two-year-old firm was founded by former Merrill Lynch advisors. McKean is listed on the Forbes Best-In-State Wealth Advisor list. Both advisors left UBS voluntarily.

Finally, Troy Elser and Ryan Gutowski went over to Bethesda, Maryland RIA Seventy2 Capital Wealth Management. They’re affiliated with the Wells Fargo Financial Network (FINet). The founder of Seventy2, Thomas Fautrel, was an SVP at Morgan Stanley until 2016.

Anomaly, UBS Internal Issues, or Industry Downtrend?
Since the beginning of this year, the total number of US brokers for UBS declined from 6050 down to just under 6000. Is this an anomaly or an industry downtrend? One could assume that it’s due to internal problems at UBS, but they are not the only bank losing brokers.

Registered investment advisory firms are putting a package on the table that’s hard to resist. Kestra Private Wealth Services, for instance, the umbrella RIA for True Alpha Wealth Management offers to pick up infrastructure costs and provide supplies and equipment.

Of course, transitioning from a wirehouse means sacrificing higher payouts. Raymond James’ independent advisor channel offers a complete software suite, including a client portal and online reporting, that is superior to what most advisors see at UBS, Morgan, or Merrill.

Despite the recent exodus of some of their top advisors, UBS does not lead the pack in RIA defections. That honor still goes to LPL, but they have 14,000 advisors on their platform, so it’s to be expected. Due to recent developments, that is also likely to change.

On February 12th, Dan Arnold, CEO of LPL, announced plans to transition a portion of LPL’s resources to offer a pure RIA option for their advisors. Fee-only advisors once turned away for the hybrid model LPL developed, will now be eligible to join the firm.