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Swimming Upstream

Swimming Upstream

If you want to work with high-net-worth clients, the private banking divisions of the wirehouse firms are worth considering.

So many financial advisors aspire to work with ultra-high-net-worth clients, you would think more of them would find their way to the rarified private wealth management or private banking divisions of the big Wall Street firms. But relatively few advisors occupy this space — even though many qualify based on the assets they manage and the kinds of clients they already work with. For the majority of advisors who don't reside in big money-center cities, are looking to work for a well known firm and want upfront money, today's wirehouses offer a good alternative.

Morgan Stanley Smith Barney PWM: Morgan Stanley's Private Wealth Management (PWM) division in the U.S. caters to ultra high net worth individuals, families and foundations with $20 million or more in investable assets. The division employs around 325 advisors in some 40 offices across the country. PWM advisors have access to family-office style services such as philanthropy, family governance, trust, tax and estate advisory, lifestyle advisory and proprietary client education programs. Advisors interested in MSSB's PWM unit are offered competitive transition packages, similar to those offered by the firm's GWM unit.

Merrill Lynch Private Banking and Investment Group: The Private Banking and Investment Group (PBIG) of Merrill Lynch caters to clients with $10 million or more in investable assets. There are about 250 PBIG advisors, all of whom have access to concierge services, family office services and meetings, and exclusive seminars and events, in addition to banking and lending, tax minimization strategies and philanthropic alternatives. Transition package “deals” for qualifying advisors in this channel are equal to those offered to high quality wealth management advisors, but they are based on the portability of assets.

UBS: The Private Wealth Management (PWM) division of UBS caters to clients with minimum net worth of $25 million. The 500 or so PWM advisors sit in specific office locations, have streamlined access to global resources and specialists within the firm, and undergo rigorous training and accreditation in a range of sophisticated wealth management strategies and techniques. They also receive client referrals from the firm's private bankers.

Wells Fargo: Wells Fargo has several different practice models. The Wealth Brokerage Services channel (WBS), has approximately 400 top advisors in what the firm calls “hubs” nationwide. These hub advisors are essentially private bankers. Advisors enjoy a team approach, partnering with other private bankers as well as insurance specialists, commercial bankers, business bankers, and mortgage experts, to name a few. The hub model offers a multi-layered referral model which may appeal to growth-oriented advisors. The division caters to clients with investable assets of $5 million or more. Advisors in this division are paid on a grid like other financial advisors, but the payout is typically lower as with most bank models due to the referral stream.

Making the Switch

The one drawback for some advisors is the client asset minimum, because it means giving up any clients who fall below the threshold. But sometimes, these clients can be passed along to another trusted team at the firm.

Take the case of Ed and James, a wirehouse team with $1 billion in assets under management, who were moving from one wirehouse to another. Given that a quarter of their clients have $25 million or more in assets, and the rest have between $1 million and $10 million, the new firm offered them the option of joining the elite private wealth channel. While the team was enamored with the idea of having extra resources at their fingertips, they knew they would be required to give up at least one third of their book consisting of clients with whom they had loyal, longstanding and, in some cases, multi-generational relationships. They also knew that at the time of the move, in 2009, the assets of those lower-net-worth clients were depressed and would likely increase once the market stabilized. But after giving serious thought to the offer, the team decided to pass these client families along to another team. Their smaller-end clients were happy with the transition, and they have been in tremendous growth mode since the move.


Mindy Diamond is president of Diamond Consultants, of Chester, N.J., which specializes in retail brokerage and banking recruiting.

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