Billion-Dollar Merrill Lynch Team Jumps To HighTower, But Is This An "Exodus?"

Tuesday, March 06, 2012 10:53
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Billion-Dollar Merrill Lynch Team Jumps To HighTower, But Is This An

Tags: Merrill Lynch

Another high-end Merrill Lynch team has departed for the promise of independence at HighTower, but it's too early to say whether the assets Merrill has lost to the advisor-owned upstart in the last month is a trend or simply business as usual.

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Kenneth Hoffman, Richard Steinberg, and Jordan Waxman managed $1.4 billion for Merrill's private banking unit under the team's HSW Advisors banner.

 

They'd been plotting a jump for over a year, HighTower executives say, so we can rule out disgruntlement over any recent Merrill policies, up to and including the ouster of Sallie Krawcheck in September.

 

Granted, HighTower absorbed another Merrill team -- this one with $700 million in AUM -- a few weeks ago, so on first glance it looks like the thundering herd is stampeding.

 

But moving to an RIA is simply part of the natural life cycle of high-powered advisors who've grown past the point where the wirehouse can give their business -- and clientele -- more than they can create on their own.

 

After all, this is the season when retention bonuses weaken, people reappraise their career plans, fresh starts happen. Every year, we expect the number of advisors on the go to pick up, and it usually does.

 

Merrill has its headaches as the honeymoon period with new owner Bank of America seems to be ending pretty fast.

 

These advisors have gone from being told they're the saviors of one of the top financial institutions in the world to feeling like mere employees of yet another troubled bank. Morale has definitely been better.

 

But Morgan has similar problems with the old Smith Barney advisors. UBS is grabbing talent and Wells Fargo is quiet.

 

When Sallie was pushed six months ago, the mood turned very quickly. People probably started looking. If it takes them a year or so to make a decision, we should know whether this is an exodus or business as usual by summer.

 

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