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SVB Private Goes to First Citizens, but How Much of It Is Left?

Over the last few weeks, the firm’s advisors and clients have scattered, causing the unit’s assets and profitability to dwindle.

First Citizens BancShares Inc. announced Monday it will buy Silicon Valley Bank, following the bank’s collapse that led to the Federal Deposit Insurance Corp. seizure and subsequent auction.

SVB’s private wealth unit, which until recently managed some $17 billion in assets, initially was going to be auctioned off as a separate division, with bids due last Wednesday. That didn't happen, and First Citizens will acquire all units of the bank.

That result calls into question what was left of the private wealth division. One industry source with knowledge of the sale process, who declined to be named, said SVB Private was “a falling knife,” and that its assets had dwindled to less than $8 billion over the last couple weeks, due to advisors and clients leaving the firm.

The wealth management business unit at the bank was not profitable, with the exception of the old KLS Professional Advisors Group in New York City, an RIA acquired by Boston Private in 2004. Those advisors had higher-quality, high-net-worth-focused services, according to a source, and priced them accordingly. Most of SVB’s advisors have more retail-focused books and were less profitable, the source confirmed.  

In a presentation on the acquisition, First Citizens said the addition of SVB Private allows it to more quickly implement its expansion into wealth management, providing a strong foothold in the Northeast.

But the source said, “There’s been a significant migration of assets away, which puts the advisors under a lot of pressure.”

“If they stay, their books have been massively blown up because a lot of the clients left,” he said. “Some of the ones that stayed, they’re more employee-minded, they didn’t necessarily bring their books with them. Or, they were still on retention deals that they were so far under water, they figured that if they left and they came after them and they had to pay back these notes, they’d basically be starting over again in their career. It’s really sad and unfortunate.”

Several advisors have already left SVB and joined other RIAs and big brokerage firms, according to recruiters and consultants with knowledge of the firm.

The source added that UBS and Morgan Stanley are offering very aggressive deals to advisors at both SVB and First Republic, with recruiting packages topping 300% of advisors' production. Last week, Morgan Stanley recruited New York–based advisor Vishal Bakshi, who left Merrill Lynch in June 2022 to join First Republic, according to reports by 

“The vast majority of these advisors that are at First Republic, that are at SVB—they’re not entrepreneurs,” he said. “They went there in part because they want an employee model, and they get paid to go there. And they want to work in a traditional branch environment. They’re not people who are necessarily wired to go out and launch their own RIAs.”

Some advisors who were part of KLS left SVB in mid-March. That includes Michael McCarville; Tara Carley, a senior managing director at SVB; Tara Vagnone, a director; Robert James Sollazzo, a vice president at SVB; Amanda Dekki, a managing director at SVB; and Andrew Hoercher, director, secretary of the KLS Investment Committee at SVB Private. They’re currently not registered with any firm.

Maritza Chow Young, a director at SVB Private, joined Simon Quick Advisors, an independent RIA headquartered in New Jersey, on March 20. 

Susan Matlow, a managing director at SVB, left to join Cerity Partners, according to her SEC registration and LinkedIn profile. 

Attempts to call or message the advisors went unanswered as of press time.

In a LinkedIn post, one SVB advisor, Dave Buxton, praised his experience at SVB, as well as colleagues across the bank.

“Keep fighting for our clients,” he wrote. “Don’t give up. We need the innovation economy to continue. I hope I helped all of you in some small way see what we were doing was special, even if it was just a smile and big hello. We caught lightning in a bottle, but the bottle broke. I thought it was going to last forever.”

“While this one hits hard, we will endure. If we have to scatter, please bring the SVB special sauce wherever you go. The new place will thank you for it.”

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