Wealth Advisers Are Fleeing Big Banks For Smaller Firms
UBS team overseeing $530 million latest to go independent
Breakaway firms have parked $25 billion on Dynasty’s platform
Another day, another team of wealth advisers leaving a Wall Street bank.
Four UBS Group AG private bankers overseeing $530 million in client assets are the latest to strike out on their own, creating a Portland, Maine-based firm called Great Diamond Partners, according to a statement Monday. Last week, five Bank of America Corp. advisers in Atlanta overseeing $450 million in client assets departed, while a $6 billion Texas team split from Morgan Stanley in April.
Breakaways are occurring more frequently as advisers hoping to exert greater control and keep a larger share of the revenue bolt big banks to create boutique firms. Smoothing the way are technology ventures such as Dynasty Financial Partners, created by former Citigroup Inc. executives, which provide record-keeping, trading platforms and product offerings once available only at the largest firms.
“Large complex teams require large complex solutions,” said Tim Oden, senior managing director of adviser services at Charles Schwab Corp. “Before the ecosystem existed they had no choice, but now they have a choice.”
Other wealth-advisory firms including Rockefeller Capital Management have also been siphoning talent. The company, run by former Morgan Stanley executive Greg Fleming, has lured teams from Bank of America and UBS in recent months as part of an expansion strategy.
A 10-year bull market and an increase in the number of wealthy families across the U.S. have helped fuel the movement. Most of the recent breakaway teams have yet to be tested by a slowing economy or serious market correction, but Great Diamond founding partner Steven Tenney said some of the risks have been mitigated by improvements in technology.
“The technological advances are independent of the economy and market cycles,” said Tenney, who spent 26 years at UBS. “The best way to capitalize on that technology is by being an independent firm.”
UBS spokesman Peter Stack declined to comment.