First Republic Bank And Silicon Valley Bank Lose Big Advisor Teams To Rivals, Large RIAs Buck M&A Headwinds, RIA-Focused Custodian Altruist Raises Capital To Compete With Schwab And Fidelity, And More
This edition of Transitions, Transactions & Promotions captures deals reflecting the ongoing havoc affecting regional banks, major capital raises for a new RIA acquirer and an upstart RIA-focused custodian, and much more. In addition to recent developments that we explore here for the first time, we also recap major moves that WSR reported during the past month. Here are the details:
Advisor Transactions
1. First Republic Loses $13 Billion In Assets To Morgan Stanley, RBC And Rockefeller
First Republic Bank lost teams of financial advisors to Morgan Stanley, RBC Wealth Management and Rockefeller Capital Management. The moves represent the exit of 14 advisors and over $13 billion in client assets, according to data on FINRA’s BrokerCheck website. Mere days before the March banking crisis erupted and First Republic suffered an 82% drop in its stock price, the firm had recruited a six-person team from Morgan Stanley.
Why it matters: Since then, the Newport Beach, California-based Todd Halbrook and Adam MacDonald Wealth Management Group, which manages $1 billion in assets, joined RBC. New York City-based advisors Adam Zipper and Joseph Duarte led a team overseeing $10.8 billion to Morgan Stanley, which also recruited Walnut Creek, California-based Jeffrey Coburn who oversees $768 million. And San Francisco-based Marchetti Porter Wealth Partners, which manages $1 billion, joined Rockefeller.
“Todd, Adam and their team do an incredible job understanding their clients’ individual needs and developing custom strategies for their long-term financial goals,” Michael Melton, Southern California Complex Director at RBC Wealth Management – U.S., said in a press release. “The genuine care they show their clients is a great fit for our firm.”
To learn more, view the Morgan Stanley team here, the Rockefeller team here and the RBC press release here.
2. Cerity Partners Recruits Eight Advisors From Silicon Valley Bank
New York City-based Cerity Partners recruited eight advisors from Silicon Valley Bank, the troubled regional lender that collapsed in early March before First Citizens Bank agreed to acquire it. Tara Damarida Vagnone, Amanda Dekki, Andrew Ringwood Hoercher, Caroline Elizabeth Hirt, Alexandera Minna Rudish, Michael McCarville, Tara Elizabeth Carley and Susan Kim Matlow moved from SVB to Cerity.
Why it matters: So far this year, Cerity Partners has announced M&A deals with four firms – Gamble Jones Investment Counsel, Ashfield Capital Partners, ARGI and Maryland Capital Management – representing over $1 billion in client assets per transaction. Cerity Partners has backing from the private equity firms Genstar Capital and Lightyear Capital.
According to its latest SEC ADV filing dated March 31, Cerity Partners oversees more than $53.3 billion in assets under management (AUM). According to the Cerity Partners website, the RIA has more than 800 financial professionals across 26 offices nationwide.
To learn more, view a Financial Advisor IQ article here and a Citywire RIA article here.
3. Sanctuary Wealth Recruits Ex-Morgan Stanley Advisor Matt Terwilliger
Indianapolis-based Sanctuary Wealth recruited Columbus, Ohio-based Iterhic Wealth Advisors, including its founder Matt Terwilliger, from Morgan Stanley’s The Edwards Group. Iterhic brings $170 million in assets under advisement and is the third wirehouse breakaway this year to join Sanctuary.
Why it matters: Terwilliger’s team focuses on professional athletes, first-generation business owners and executives with significant equity and deferred compensation, planning for the unique needs of these clients such as nonsequential compensation and tax strategy. Terwilliger has over a decade of wealth management experience, starting with Merrill Lynch in 2011, then moving to Morgan Stanley in 2014.
“Like many of the breakaway advisors we attract, Matt has a unique and sophisticated business,” Adam Malamed, CEO of Sanctuary, said in a press release. “He is looking to grow his practice by bringing on both younger advisors eager to build their careers in an independent model and older advisors looking for a succession plan that lets them transition out of the business on their own terms.”
To learn more, view the press release here.
4. Cetera’s AdvisorNet Financial Recruits $1 Billion Rohlik Financial Group
Minneapolis and Rockford, Illinois-based Rohlik Financial Group joined the AdvisorNet Financial region of Cetera Advisor Networks. Brent Rohlik and Suzanne Holt lead the six-member team, which oversees approximately $1 billion in assets and previously was affiliated with Regulus Financial Group.
Why it matters: AdvisorNet Financial – which operates like an Office of Supervisory Jurisdiction (OSJ) – consists of 231 advisors, 50 owners and 68 employees. Cetera announced at least nine recruitments, acquisitions and strategic partnerships in the first quarter of 2023. As of Dec. 31, Cetera oversaw approximately $322 billion in assets under administration (AUA) and $115 billion in AUM.
“As we expand our wealth management offerings and deliver more advisory business, AdvisorNet and Cetera are the right home for our close-knit team of professionals and for our clients,” Rohlik and Holt said in a press release. “We look forward to hands-on collaboration with the AdvisorNet and Cetera teams as we continue to evolve our business and find new and innovative ways to serve our clients.”
To learn more, view the press release here.
Mergers & Acquisitions
5. Perigon Acquires Stakeholders Capital, Affiliation of Cognizant’s Sheetal Bagde
San Francisco-based Perigon Wealth Management announced dual deals: the acquisition of Amherst, Massachusetts-based Stakeholders Capital and the affiliation of Sheetal Bagde who is an advisor at Palo Alto, California-based Cognizant Wealth Advisors. Stakeholders Capital and Cognizant have $145 million and $100 million in AUM, respectively.
Why it matters: Stakeholders Capital, which specializes in ESG and impact investing, consists of a six-member team led by Andrew Bellak while Gregory Wendt heads its office in Santa Monica, California. Bagde of Cognizant serves wealthy families and provides pro bono financial planning for single mothers. Perigon has approximately $4.8 billion in assets. Last year, Perigon announced a merger with PM Wealth Management, formed an alliance with Prager Metis tax advisory, acquired Nauset Wealth Management and expanded its Atlanta office.
“We are thrilled to welcome Sheetal, Greg and Andrew and the Stakeholders team to the Perigon family,” Perigon CEO Art Ambarik said in a press release. “Perigon is proud that our flexible affiliation models attract such experienced individuals and teams. Advisors appreciate our seamless way to plug into technology and recruiting platforms and streamline operations.”
To learn more, view the press release here.
6. EP Wealth Advisors Acquires $1 Billion Lehman & DeRafelo Financial Resources
Torrance, California-based EP Wealth Advisors acquired Media, Pennsylvania-based Lehman & DeRafelo Financial Resources. This is EP Wealth’s second Philadelphia-area acquisition and its eighth East Coast office. The deal is expected to add over $1 billion in assets to EP Wealth, which as of Dec. 31 oversaw $16.1 billion.
Why it matters: Lehman & DeRafelo consists of four advisors and two support staffers. Rich DeRafelo and Ron Lehman, its principals, become Regional Directors at EP Wealth, while Jeff Lehman becomes a Senior Wealth Advisor. The team provides financial planning and investment management, including alternatives strategy, for high net worth clients.
“As EP Wealth grows to a nationwide firm, we continue to enhance our financial, tax, estate and specialized planning capabilities, paired with diverse investment solutions that help clients advance toward their goals,” EP Wealth CEO Patrick Goshtigian said in a press release. “The Lehman & DeRafelo team has additional expertise in alternative investment strategies which enhances our client offering and sharpens our competitive edge in the marketplace.”
To learn more, view the press release here.
7. Wealth Enhancement Group Acquires $1 Billion Equius Partners
Wealth Enhancement Group (WEG) acquired the Novato, California-based Equius Partners, which manages over $1 billion in assets. Jeff Troutner and Phil Jonckheer founded the RIA in 1993. It has seven financial advisors and five support staff, who apply evidence-based asset class investing principles for the team’s clients.
Why it matters: This is WEG’s fourth acquisition of 2023, which together represent over $1.8 billion in new client assets. As a result of the Equius Partners deal, WEG has over $63.8 billion in total client assets, serves more than 49,000 households and operates 90 offices nationwide. DeVoe & Company advised Equius Partners on the transaction.
“It was important that we’d be able to maintain our investment process and client service approach, while also having access to more services for existing and future clients,” Equius Partners CEO Thomas “T.J.” Troutner said in a press release. “We are excited about bringing Wealth Enhancement Group’s broader capabilities such as extensive financial planning resources, tax services and estate planning experts to our clients.”
To learn more, view the press release here.
Strategic Partnerships
8. Altruist Raises $112 Million To Compete With Top Custodians Schwab And Fidelity
Altruist, a custodian platform built for independent RIAs, raised $112 million in a Series D funding round. Investors included Insight Partners, Adams Street Partners, former Vanguard CEO and Board Chair Bill McNabb, Carson Group CEO Ron Carson, and Mariner Wealth Advisors CEO and President Marty Bicknell. Due to a previous $110 million Series C funding round in 2021, Altruist’s total capital raised exceeds $290 million.
Why it matters: The upstart custodian plans to target midsized RIAs that manage between $100 million and $1 billion in total assets, in a bid to compete better against the industry leading custodians Schwab and Fidelity. Altruist CEO Jason Wenk founded the firm in 2018, after working as an advisor. He previously founded Retirement Wealth and FormulaFolios, wealth management firms that managed over $1.8 billion and $3.6 billion respectively before their acquisitions by Brookstone Capital Management in 2020.
“While the RIA industry has evolved rapidly over the past 20 years, the custodians serving them have not,” Wenk said in a press release. “Legacy custodians have little incentive to innovate and rebuild technology that would enable advisors to scale and reach as many people as possible.”
To learn more, view the press release here.
9. Goldman Veterans Launch RIA Acquirer With $200 Million Funding From Crestview
RIA Modern Wealth Management announced its launch with a $200 million investment from private equity firm Crestview Partners. Founded by co-CEOs Gary Roth and Mike Capelle and President Jason Gordo, the firm aims to acquire RIAs to form an integrated enterprise. Roth, Capelle and Gordo all were executives at United Capital when Goldman Sachs purchased the firm in 2019 for $750 million. At the time, United Capital held $25 billion in assets with over 70 offices, 220 financial advisors and 22,000 clients nationwide.
Why it matters: Modern Wealth plans to deliver holistic financial advice by engaging a team of specialists including CFPs, risk managers, CFAs, estate planners and tax planners to support advisors. The firm also plans to support advisor prospecting with lead generation that matches advisors with clients according to their unique needs. Modern Wealth is in multiple discussions with RIAs that have interest in joining as anchor offices, according to a press release. Ardea Partners advised Modern Wealth in the transaction.
“We were drawn to Crestview due to both its experience in the space and its track record of partnering with management teams to build rapidly growing businesses,” Roth said in the press release. “We’re confident that our proven experience and approach, bolstered by capital and a value-add partner in Crestview, positions us extremely well to be an active acquirer in the industry while continuing to better the advisor and client experience.”
To learn more, view the press release here.
Promotions & People Moves
10. NewEdge Hires Veteran UHNW Private Wealth Advisor Josh Gully
NewEdge Wealth announced the appointment of Josh Gully as a Managing Director, responsible for developing client relationships and increasing the firm’s AUM. Prior to NewEdge, Gully served as a Managing Director and Private Wealth Advisor at Morgan Stanley for 30 years. He has over 35 years’ experience in financial services.
Why it matters: Gully specializes in serving entrepreneurs, private investors, family offices and multigenerational family clients, including philanthropic goals. This aligns with NewEdge’s focus on family offices, institutions and ultra wealthy clients. NewEdge Wealth is part of NewEdge Capital Group, which supports more than 300 advisors and recently reported record full-year 2022 growth of $9.1 billion in expected new AUM, raising its total to approximately $32 billion.
“I am thrilled to begin the next chapter of my career at NewEdge Wealth,” Gully said in a press release. “My top priority is the client experience, and it is evident that NewEdge holds the same regard. I am excited to introduce a new level of investment offerings, intellectual capital, and specialized service to my clients.”
To learn more, view the press release here.
Chris Latham, Deputy Managing Editor at Wealth Solutions Report, can be reached at clatham@wealthsolutionsreport.com
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