While some wealth management firms are shifting their focus to serve registered investment advisors, Sanctuary Wealth is adding high-level employees to accelerate their recruiting of breakaway brokers.
Two weeks ago, Sanctuary, a hybrid firm with more than $10 billion in assets, hired Amit Dogra, former CEO of Third Seven Advisors and the former head of advisor growth and development at HighTower Advisors, as chief experience officer, responsible for improving the tools the firm offers its advisors, as well as continuing to shape the firm's culture. In May, the firm hired Vince Fertitta, a longtime Bank of America Merrill Lynch executive, to serve as president of wealth management at Sanctuary. James Otley, the founder and CEO of Otley Private Wealth Management, also joined in the spring to lead its new outsourced chief investment officer division.
Jim Dickson, Sanctuary's founder and CEO who spent years as a divisional leader at Merrill Lynch, said he wanted to “build a better toolbox” for advisors when he started the firm. It has been adding services like in-house tax planning, insurance, bill-pay, lending and investment banking services to complement its broker/dealer.
Recent new hires were brought in to further that cause, but Sanctuary is already adding new advisors at a feverish pace. Four groups of advisors managing an aggregate of almost $2 billion have joined in June alone—two from Merrill Lynch and two from their own RIAs. "We aren’t Raymond James, so to move that many teams in a month is a big deal,” Dogra said.
The new additions bring Sanctuary’s total assets under management to over $10 billion, and Dogra said he expects at least two more teams to break away and join Sanctuary in the coming week. He expects a steady pipeline of others to join throughout the rest of this year.
Dogra said his departure from Third Seven Advisors was voluntary and amicable. Like HighTower, which has forgone its original partnership model to solely focus on providing capital and support services to RIAs, Third Seven was shifting its focus to RIAs to grow its core alternative asset management business, he said. Sanctuary also plans to invest in and provide capital and support to independent RIAs, similar to Emigrant Partners, but it's not abandoning the so-called breakaway brokers interested in the independent channel. Sanctuary is actively recruiting brokers to join as either employees of the RIA, or help them start their own within Sanctuary's network, Dogra said.
The number of brokers that departed their firms to join or start RIAs was down 36% from the first quarter of 2018, according to Echelon Partners, a Los Angeles-based investment bank and consulting firm focused on wealth and investment managers. But advisors are still trickling out of the brokerages and need a place to take their clients; 94 brokers left their firms in the first quarter, according to Echelon.
“Let’s be honest, the wirehouses are not melting away, but, is this a pin prick or the tip of the spear? We think we’re the tip of the spear,” Dogra said.