After 10 years at Wells Fargo Advisors, David H. Hohimer will form Hohimer Wealth Management, a new fee-only registered investment advisor based out of Seattle. But the firm will custody its assets with First Clearing, Wells Fargo’s new RIA clearing and custody service that launched earlier this year.
Hohimer has 28 years of experience in the industry as a broker/dealer, and during his time at Wells Fargo Advisors, he and his team came to manage more than $650 million in client assets. He expressed interest in his own advisory firm due to the flexibility and investment options available for his clients, and as an independent RIA he would be held to the legal fiduciary standard.
The fee-only model, which can improve transparency for clients in regard to costs, makes the new firm a fit for First Clearing, which is working exclusively with fee-only RIAs. Execution services for Hohimer’s firm will be handled by TradePMR, which is providing middle-office support to those RIAs partnering with First Clearing.
Wells Fargo's move in establishing First Clearing is unique among the major wirehouses, but it may help the brokerage firm retain assets from brokers who want to start their own RIAs; Wells Fargo’s 2018 fourth quarter earnings showed that the firm lost 4% of its financial advisors in 2018. Carolyn Armitage, managing director at Echelon Partners, a Los Angeles-based investment bank and consulting firm focused on wealth and investment managers, told WealthManagement.com in January that Wells Fargo’s move was “long overdue.”
“If Wells Fargo can keep the custody (assets) and keep those fees, they’ve still won,” Armitage said. “I could see the other big banks following suit, too.”