6 key points that are attracting some of the biggest and best advisors to this bank-owned corporate RIA
The value proposition of our firm is built upon being an objective source of knowledge designed to help advisors make sound decisions. Our goal is to serve as connectors to the industry at large, helping advisors through their exploration process without bias or expectation.
So I grappled with writing this piece, because some might take the singular focus on a firm as subjective or even sales-y. That’s not my intent whatsoever.
I wrote this as a way of shedding some light on a much-evolved landscape with a new waterfall of legitimate options for advisors considering change. And to answer what’s become a flood of questions on this particular firm—questions that increase every time word spreads that another multi-million dollar team has joined them.
The firm I’m referring to is First Republic Private Wealth—a brand that seemed to come out of nowhere and is now the hottest ticket for some of the biggest teams in the wealth management arena.
So how did this quiet wealth management unit of a bank manage to fly under the radar for so long, only to emerge as the largest corporate RIA that advisors everywhere are talking about?
First Republic first crossed my path about 15 years ago. While on paper, the story sounded like a decent one at the time, it never really got much traction or garnered the attention of recruiters like me, or even the advisor population at large. It was considered just another bank brokerage option – albeit a firm with a clean and solid reputation – with a small wealth management unit that employed talented advisors.
Fast-forward to 2010 when the bank tasked Bob Thornton, the President of the unit, to shake things up and transform First Republic into a major player. They philosophically doubled down and paid more than $100 million to acquire the iconic Los Angeles-based Luminous Capital—a $6 billion RIA at the time. They followed that with a second RIA acquisition of the $6.1 billion Constellation Wealth Advisors based in New York City and San Francisco. These two mega deals really put First Republic on the map—and, most importantly, on the minds of every top advisor in the country.
What followed has been nothing short of extraordinary to watch as the once quiet wealth management unit now has about 150 high-caliber advisors under its umbrella. These “Wealth Managers” as the firm calls them, joined First Republic from every major firm on the Street including Goldman Sachs, Morgan Stanley, UBS, and Merrill Lynch. And almost without exception, these are cream-of-the-crop, multi-million-dollar revenue generators with books at or exceeding $1 billion in assets under management.
Awesome as it all sounds, what’s really extraordinary is this: Top advisors are quite discerning and a tough lot. To get them to move at all is exceptional, but to get them to move to a bank – and one that is lesser known than the biggest brand names – makes the story even more remarkable.
What’s the big attraction?
- A solid history: The bank has a pristine 33-year history and is considered to be one of the country’s premier private banks with $95 billion in assets. It’s built a strong reputation through exceptional relationship-based service to high net worth individuals and families.
- Plenty of assets: The wealth management unit ranks high on every list as one of the largest RIAs in the country with more than $120 billion under management.
- Entrepreneurial culture: For the independent-minded advisor not ready to go-it-alone, First Republic offers a great middle ground.
- Competitive deals: Let’s face it: The industry’s best talent doesn’t come cheap! First Republic has demonstrated that they are open-minded, creative and super smart about striking while the iron is hot and doing what it takes to win the race for top talent.
- It’s a real growth play: Advisors have long been skeptical of bank brokerage models, viewing them as low end and not really able to offer referrals. But, First Republic has proven that it knows how to foster relationships between its bankers and wealth managers and as a result, the advisors the firm has recruited are seeing exciting results.
- Success begets success: Every time a well-respected advisor is recruited to First Republic, you can’t help but notice. So, when just this month the press reported that Steven Levine, an advisor managing $2 billion in assets left UBS in LA after a nine-year career there (and more than 30 in the industry), many of his colleagues at UBS and elsewhere said “Wow, if it’s good enough for Steve, maybe it’s an option I should consider too.”
It almost sounds too good to be true. For those who are looking for a solid “middle ground” between independence and employee models within their markets, First Republic is a home run. But frankly, it’s not the right firm for all advisors. Geography is an issue; First Republic’s footprint is bicoastal rather than national. Plus, many advisors have an aversion to working for a bank, albeit a very attractive one in this case. And still many others want to be fully independent.
What’s really notable about this firm is that its success is demonstrative of how much the wealth management world – and advisor sentiment in particular – has changed. Advisors have proven they’re open to models that may not have the most familiar name, yet offer something even more: An advisor-centric culture with a value proposition that is hard-wired for growth. And at the end of the day, that’s become what matters most.
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