Thursday, May 23, 2024

JPMorgan Loses Two Former First Republic Teams Totaling $8.5B in AUM -Dlight News

J.P. Morgan is losing two multi-billion teams acquired in the firm’s purchase of First Republic following last year’s regional bank crisis.

Merrill Lynch is recruiting a 12-person Florida team from JP Morgan Wealth Management that manages $3.5 billion in client assets, while Citizens Bank announced it was acquiring a similarly sized team with more than $5 billion AUM based out of San Francisco, also from JP Morgan. 

The San Francisco team includes senior managing directors Rick Gordon and Hugh Beecher, as well as managing director Andrew Curto. Beecher and Gordon joined First Republic in 2015. Beecher had a multi-decade tenure in the industry, including stints at Goldman Sachs and Credit Suisse, while Gordon worked at Barclays and briefly at Lehman Brothers, according to their BrokerCheck profiles.

Last year, the collapse of Silicon Valley Bank began toppling dominoes throughout the banking industry, including First Republic. The latter bank was the second-largest bank failure in U.S. history and the fourth regional bank to collapse since SVB’s downfall in March. 

Regulators briefly seized the flatlining First Republic before JP Morgan stepped in, acquiring about $173 billion of First Republic’s loans, $30 billion of securities and $92 billion in deposits. 

It was a full-circle move for many advisors who’d begun their careers in massive brokerages before arriving at First Republic only to find themselves back in the walls of a wirehouse (a 2023 WealthManagement.com analysis found 69% of First Republic advisors joined from a wirehouse or large firm, including Ameriprise, Goldman Sachs, JPMorgan, Raymond James and Credit Suisse, among others).

The acquisition also follows news this week that industry veteran Paul Casey would join Citizens from Morgan Stanley to become the Head of Wealth Management beginning in July.

Meanwhile, Merrill Lynch acquired the Florida team led by Salvatore Tiano and John Smyth, that also included four wealth managers and six client associates. They are joining Merrill’s Palm Beach Gardens office, led by Regional Managing Director Josh Moody.  

A 16-hour drive up I-95, in Lewes, Del., a team of four left Merrill Lynch for Janney Montgomery Scott, a hybrid RIA and broker/dealer overseeing around $138 billion in client assets at the end of 2023. 

Operating as Shore to Shore Private Wealth, the quartet is helmed by Executive Vice President Michael Koppenhaver, manages $600 million in assets and reported a trailing twelve-month profit of more than $3.7 million while at Merrill. 

During a quarterly earnings call last week, Bank of America said advisor attrition dropped at Merrill but did not offer a headcount. The company reported employing 18,916 advisors at the end of 2023, following a net gain of about 175.  

At the end of the first quarter, Merrill Lynch advisors were overseeing approximately $3.3 trillion in client assets, including about $1.4 trillion under management. That’s an increase of $300 billion and $100 billion, respectively, over the same period a year ago.  

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