The move to JP Morgan is the full circle of many First Republic advisors

Financial Planners


Many of First Republic’s advisers will say they left telecoms and large brokerage firms for the bank’s more entrepreneurial boutique model. Many cite a desire for more autonomy and a community-based culture. The company’s robust hiring deals probably didn’t hurt, either.

But now, the firm’s 229 advisors (according to JP Morgan’s latest calculations) say they’re back to where they started, in a way, with JP Morgan Chase’s announcement to buy First Republic earlier this week. you will notice that

of The cultural mismatch between the two companies could be a real concern, according to industry lawyers and recruiters, and could weigh heavily on those advisors when deciding whether to stay at JP Morgan. .

according to Wealth Management.com An analysis of Discovery data as of March 23 shows that approximately 51% of First Republic’s advisors were previously enrolled with one of four telecom companies before moving to the bank, 179 out of a total of 350. was. Additionally, 69% of the advisors were from brokerage firms such as Ameriprise, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan, Raymond James or another large firm (only 8% were from JP Morgan Securities to First came to the Republic).

Because the list pulled from Discovery included many individuals who were not advisors, Wealth Management.com We removed the names of non-applicable positions and checked the remaining names against FINRA and SEC records, LinkedIn pages, and First Republic’s online employee directory. The results include more names than First Republic previously reported, with a total of 350, compared to his 229 entry into JP Morgan. The Discovery List includes the names of advisors who have since moved on to other companies.


Market Counsel CEO Bryan Hamburger has been in contact with some advisers at First Republic to consider whether to stick with JP Morgan or move on to another organization,2 He admitted that there was no “genuinely high degree of cultural alignment” between the two institutions.

“They are not necessarily optimistic about moving to a larger company. They like the entrepreneurial side of First Republic, which is not always the case with JP Morgan,” Hamburger said. I’m here. “But JP Morgan will likely bring up some sort of retention agreement with them, and they’ll have to weigh that against their options.”

The First Republic struggles surfaced after the failure of Silicon Valley Bank in March. The Federal Deposit Insurance Corp. accepted offers from potential buyers last weekend, ultimately leading JP Morgan to beat other parties, including PNC Bank, in his 2008 It was the biggest bank failure since the crisis, surpassing the SVB.

President of Diamond Consultants, Wealth Management.comHe believes this is the best news possible for the advisor, and the speed of the transaction gave JP Morgan an edge in retaining the advisor.

“It’s a great brand. “If it had taken this long for SVB to be sold out of trustees, it would have been ‘game over’.”

However, cultural mismatch can be a serious problem. According to RIA Lawyers partner Max Schatzow, many of First Republic’s advisors come from large communications offices and other large institutions, and chose First Republic to escape those restrictions. .

Whenever advisors arrive at an organization like JP Morgan, they are likely to deal with more policies and procedures, oversight and training not found in “smaller, flatter” organizations. Schatzow said, moving to a larger institution, First Republic’s advisors may find it difficult to provide advice as they used to, or feel obliged to certain proprietary products.

“It’s interesting to see them have to get back on their feet. If they’re from there, they’ll have to digest some of the issues they left behind,” Schatzow said.

It remains to be seen if the strengths of the remaining advisors outweigh the weaknesses.Many firms had already fled to other firms prior to the deal with JP Morgan. contains red blood cells, Morgan Stanley, UBS and Rockefeller. (JP Morgan welcomes The First Republic Advisors and Team a few weeks before the deal was finalized.)

Patrick Burns, a California-based attorney and adviser on company changes and spin-offs, said he is in contact with First Republic advisers in the “final stages” of a new deal. He found that First Republic’s wealth management division was highly regarded, and that advisors received many offers despite the bank’s sudden liquidation.

“I think most First Republic advisors are in serious talks with third parties, whether it’s Schwab or Fidelity starting an RIA, or one of the big aggregator companies coming in like Hightower or Mariner. Or one of the companies out there,” Barnes said.

Burns said JP Morgan wasn’t “the best cultural footprint” for advisers, saying many of the agencies rely on bank referrals to do their jobs and haven’t built their own business books. Burns compared the merger to JP Morgan’s hiring of Bear Stearns’ advisors after the bank went bankrupt in 2008 (although Bear Stearns’ advisor arm is much more outperformed than First Republic’s). (He emphasized that it is small in scale and not well known).

“When they merged with JP Morgan, I don’t think JP Morgan really knew what to do with them, so a lot of them left very quickly,” he said. “Maybe they’ve learned something and built resources over the years since then. We don’t know yet.”

Advisors to the First Republic were often plucked from communications offices and large corporations by hanging. Generous recruitment package and hefty promissory note. JPMorgan chief financial officer Jeremy Burnham said these hiring packages are “as is” for First Republic’s advisers.

But advisers who choose to stay will likely be subject to compensation adjustments at some point, Burns said, and will likely be competing with bank advisers for the attention of back-office resources.

Lawyers also said JP Morgan is a particularly “litigation-prone” company if its counsel later decides to leave.

The JPMorgan Advisors division is still enrolled in the Broker Protocol, which should offer some protection if an advisor later chooses to withdraw.

However, the uproar has also prompted First Republic’s advisers to consider going independent as an option, and Hamburger believes joining a banking affiliate like First Republic would provide him with the benefits and security that he believed would accrue. The adviser said he felt that was “a bit of a mirage”.

The experience, he said, was “disastrous” for those planners.

“These are people building businesses on vanished chassis,” he said. “And they’re scared of their clients. They’re scared of their careers. And they’re trying to make the best decision under the circumstances.”



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