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Move to JPMorgan Is Full Circle for Many First Republic Advisors

The majority of First Republic advisors came to the bank from wirehouses or other large brokerages. Now, they find themselves right back where they started.

Many First Republic advisors will tell you they left a wirehouse or large brokerage for the bank’s more entrepreneurial, boutique model. Many will cite their desire for more autonomy and a community-based culture. The firm’s robust recruiting deals probably didn’t hurt either.

But now the firm’s 229 advisors (by JPMorgan’s latest calculation) will find themselves, in a sense, right back where they started, with JPMorgan Chase announcing its acquisition of First Republic earlier this week.

The cultural mismatch between the two firms could be a real concern, one that is likely weighing on those advisors as they decide whether to stay at JPMorgan, according to industry attorneys and recruiters.

According to a analysis of Discovery data as of March 23, approximately 51% of First Republic advisors were previously registered with one of the four wirehouses before moving to the bank, at 179 names out of 350 in total. Additionally, 69% of advisors stemmed from one of the wirehouses or another large firm, including Ameriprise, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan and Raymond James (8% alone came to First Republic from J.P. Morgan Securities).

The list pulled from Discovery included many individuals who weren’t advisors, so eliminated names with nonapplicable job titles, and cross-checked remaining names with FINRA and SEC records, LinkedIn pages and First Republic’s online employee directory. The result included more names than First Republic previously reported, at 350 in total, compared with the 229 entering JPMorgan. The Discovery list includes names of advisors that have since left for other firms.

MarketCounsel CEO Brian Hamburger has been in contact with several First Republic advisors mulling whether to stick with JPMorgan or branch out, and acknowledged that there wasn’t a “real high degree of cultural alignment” between the two institutions.

“They’re not necessarily optimistic about moving to a larger enterprise. They like the entrepreneurial aspects of First Republic, and that’s not necessarily going to be the case at JPMorgan,” Hamburger said. “But JPMorgan’s likely going to come to them with some type of retention deal, and they’re going to have to weigh that against their options.”

First Republic’s struggles surfaced after Silicon Valley Bank’s collapse in March. The Federal Deposit Insurance Corp. stepped in last weekend, accepting offers from potential buyers, with JPMorgan eventually winning out over other parties, including PNC Bank. It became the largest bank collapse since the 2008 crisis, surpassing SVB.

The deal with JPMorgan was likely the best available option compared with PNC, according to Louis Diamond, the president of Diamond Consultants and a contributor to He considered it the best possible news for advisors, and the deal’s speed gave JPMorgan a leg up on retaining advisors.

“It’s an amazing brand; it’s stability; and it got them out of limbo,” Diamond said. “If it took as long as SVB did from receivership to being sold, it would have been ‘game over.’”

But the cultural mismatch could be a real concern; many advisors at First Republic came from large wirehouses and other large institutions, and opted for First Republic to escape those confines, according to Max Schatzow, a partner with RIA Lawyers. 

Any time an advisor lands at an organization like JPMorgan, they’re likely to be dealing with more policies and procedures, supervision and training you may not find at a “smaller, flatter” organization, Schatzow said. In moving to a larger institution, it’s possible First Republic advisors would find it harder to render advice as they’d done in the past, or would feel beholden to certain proprietary products.

“It will be interesting to see them have to go back, if that’s where they came from, and stomach some of those issues they left for,” Schatzow said.

It remains to be seen whether the pros will outweigh the cons for the remaining advisors. Before the JPMorgan deal, a large number had already fled to other firms, including RBC, Morgan Stanley, UBS and Rockefeller. (JPMorgan even welcomed First Republic advisors and teams in the weeks before the deal was struck.) 

Patrick Burns, a California-based attorney who works with advisors changing firms or going independent, said he’d been in contact with some First Republic advisors “in the final stages” of making new deals. First Republic’s wealth management unit was well respected, and he found advisors are getting many offers despite the bank’s hasty demise.

“I think most First Republic advisors by now have had serious conversations with third parties about what their options look like, whether it’s Schwab or Fidelity about starting an RIA, or one of the larger aggregator firms and tucking in, like a Hightower or a Mariner or one of the firms out there,” Burns said.

Burns worried JPMorgan wouldn’t be “the best cultural footprint” for advisors, saying that many in that institution work off bank referrals and aren't building their own books of business. Burns compared the integration to when JPMorgan folded in advisors at Bear Stearns after that bank went under in 2008 (though he stressed the Bear Sterns advisor unit was smaller in size and prominence compared with First Republic).

“When they got integrated into JPMorgan, I don’t think JPMorgan knew quite what to do with them, so a lot of them ended up leaving pretty quickly,” he said. “Maybe they’ve learned something in the years since and built up their resources. It remains to be seen.”

First Republic advisors were often poached from wirehouses and large firms by dangling generous recruiting packages and big promissory notes. JPMorgan Chief Financial Officer Jeremy Barnum said those recruiting packages would “stay in place” for First Republic advisors. 

But advisors opting to stay would likely be subject to compensation adjustments at some point and will be competing with bank advisors for the attention of back office resources, according to Burns.

The attorney also said JPMorgan was a particularly “litigious” firm if advisors decide to leave at a later point, an additional consideration as they are presented with JPMorgan employment agreements, which will likely be in the “very near future.”

The JPMorgan Advisors unit is still enrolled in the Broker Protocol, which should offer some protection if advisors opt to leave at a later point, Hamburger said.

But the tumult had First Republic advisors also mulling independence as an option, with Hamburger saying advisors now felt the benefits and safety they thought came with joining a bank-affiliated firm like First Republic were a “bit of a mirage.” 

The experience has been “harrowing” for those planners, he said.

“These are people building a business on a chassis that has disappeared,” he said. “And they're scared for their clients; they’re scared for their careers; and they’re trying to make the best decision they can under the circumstances.”

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