By Andrew Welsch
JPMorgan Chase's wealth management business lost four large financial advisor teams overseeing a total of approximately $13.5 billion in assets to three rivals, including Merrill Lynch.
All the advisors who left on Friday once worked at First Republic Bank, the troubled lender that was engulfed in the regional bank crisis and bought by JPMorgan almost a year ago. The losses represent a setback for JPMorgan, which has been striving to build its wealth management business.
A JPMorgan representative declined to comment on the departures.
The moves represent lingering fallout from the regional bank crisis that toppled three lenders, including First Republic.
San Francisco-based First Republic was known for providing private banking and wealth management services to wealthy clients. It aggressively grew its wealth management business by hiring top-tier talent from large national brokerage firms. But when First Republic got swept up in the regional bank crisis last year, it hemorrhaged deposits and lost scores of financial advisors.
The bank was bought by JPMorgan in May. The addition of First Republic's remaining financial advisors has been a boon to JPMorgan's wealth management business. JPMorgan reported wealth management client assets for the first-quarter reaching a record $3.3 trillion, up 30%.
The company has been steadily moving former First Republic advisors and client assets over to its platform from Pershing, a unit of Bank of New York Mellon that provides custody and clearing services to wealth management companies and other financial institutions. It's possible that the advisors who left JPMorgan to join rivals on Friday had not yet moved client assets to JPMorgan's in-house custodian.
Of the largest departures on Friday, the biggest went to regional bank Citizens, which said it hired a 12-person team that managed more than $5 billion in client assets. The San Francisco-based team includes advisors Rick Gordon, Hugh Beecher, and Andrew Curto. Gordon is ranked among Barron's Top 1,200 Financial Advisors for 2024 and Top 100 Independent Advisors for 2023.
Gordon said they made the move because Citizens' approach to private wealth management "perfectly aligns with our desire to deliver a client-focused and personalized experience to better serve our clients in all aspects of their financial life."
Gordon had been registered with First Republic from 2015 until after acquisition by JPMorgan, according to BrokerCheck, a public database maintained by industry self-regulator Finra.
The team is a big hire for Providence, R.I.-based Citizens, which has ambitions of growing its wealth management business. Last week, the regional bank said it hired Paul Casey as head of wealth management. Casey, whose appointment is effective July 9, served as a managing director in Morgan Stanley's private wealth management unit.
In San Francisco, JPMorgan also lost two other advisor teams to Cresset, a fast-growing multi-family office and private investment firm. The teams managed approximately $5 billion in assets on behalf of 160 client households, according to Cresset.
The departing groups include a 10-person team led by advisor Dagny Maidman and a five-person team led by advisors Chris Chase and Erik Ralston. Combined, they are a large addition for Cresset, which has more than $45 billion in assets under management, according to the Chicago-based company.
Maidman is included on Barron's Top 1,200 Advisors, Top 100 Independent Advisors, and Top Women Financial Advisors rankings.
On the East Coast, Merrill Lynch said it hired an advisor team managing $3.5 billion from J.P. Morgan Wealth Management in Palm Beach Gardens, Fla. The 12-person team joined Merrill's private wealth unit that serves ultrahigh-net-worth clients. The group includes senior financial advisors Salvatore Tiano and John Smyth. Tiano is ranked among Barron's Top 1,200 Advisors for 2024. Their team also includes four wealth managers and six client associates, according to Merrill.
They had been with JPMorgan Chase's wealth management unit for just about a year, having joined JPMorgan from First Republic Bank in March 2023.
The move to JPMorgan was something of a homecoming for Tiano and Smyth because both advisors had previously worked at the company before leaving to join First Republic in 2020. At the time they joined First Republic, the San Francisco-based company was aggressively growing its wealth management business.
The addition of Tiano and Smyth's team is a big get for Merrill Lynch, which has in recent years lost some advisor teams with substantial AUM to competitors such as First Republic, LPL Financial, and Morgan Stanley.
Bank of America reported record first-quarter client balances of $4.5 trillion for its wealth management unit, which includes Merrill Lynch. Client balances were up 14% year over year.
Write to Andrew Welsch at andrew.welsch@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 19, 2024 17:22 ET (21:22 GMT)
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