Goldman Loses Two Teams Generating $32.5 Mln to UBS, First Republic

As Goldman Sachs diversifies its retail investor franchise to consumers and the merely affluent, it is losing more advisors in its flagship “private wealth” unit business for multi-millionaires.

The New York City team of Brian Zakrocki and Joseph Wladyka began garden leaves last week after agreeing to join First Republic Bank’s private wealth team, according to a person familiar with the move. The pair, who spent their entire 17- and 16-year careers at Goldman and are moving with four associates, generated $16.5 million of fees last year on about $4 billion of client assets, according to a person familiar with their books.

In Boston, Denis J. Cleary and Gregory M. Devine arrived at UBS Private Wealth Management with their four associates from Goldman last Thursday, UBS confirmed. The advisors produced “more than $20 million” in the previous 12 months on $6 billion of assets “supervised” for wealthy clients in the technology, private equity, VC and “family business” sectors, according to a UBS statement. They also had spent their entire brokerage careers—13 years for Cleary and 15 for Devine—at Goldman, according to their BrokerCheck histories.

Adding to the pain of losing high-producing and influential teams—both Devine and Zakrocki were on Goldman’s Advisory Council and Zakrocki and Clearly were elevated to managing directors in 2017—is their relatively young age. 

“Known for being one of the largest teams in the country under the age of 50, we’re proud to have them on board here at UBS to bring a differentiated view for our clients,” John Mathews, the firm’s head of Ultra-High Net Worth Americas and Private Wealth Management said of Cleary and Devine in a prepared statement. 

Zakrocki in New York confirmed that he is 42 and that he worked as an accountant at Arthur Andersen before joining Goldman in 2003, but declined to comment beyond that. Both he and Wladyka are still registered on their BrokerChecks with Goldman.

The tight leash that Goldman has held on the fewer than 500 advisors in its private wealth arm, such as garden leaves prohibiting them from working at new firms for two or three months after giving notice, appears to have weakened. At least six teams left in recent years for Morgan Stanley, First Republic, J.P. Morgan Securities and independent platforms in Washington D.C., Chicago, San Francisco and Miami, and several executives and advisors have been forced out.

A Goldman Sachs spokesman said the company employs about 800 private wealth advisors—though only about 475 are running their own books—and remains committed to the “ultra-high net worth market.”

“Private Wealth Management is a flagship large-scale business that has continually outperformed, but we still see room to grow,” Consumer and Investment Management division cohead Eric Lane said two weeks ago at Goldman’s Investor Day. “[W]e need to add more advisers. A typical private wealth management adviser covers 20 to 30 families. The more advisers we have, the more quickly we can scale our business.”

Goldman added a net 150 brokers over the past five years, and hopes to add 250 more over the next three years, Lane said.

For UBS, the arrival of Cleary and Devine—who since 2016 has worked from Los Angeles—suggests that the firm is willing to pay handsomely for select producers as it fills holes left by the departure of scores of brokers. It recently declared its commitment to the U.S. retail brokerage market, despite a brokerage force in the U.S. that has dwindled to just over 6,000, less than half the size of its national big-firm competitors.

Goldman reorganized its wealth businesses last month. It separated its private wealth group from its investment management division, grouping it with its new consumer and advisory businesses for middle-to-upper income individuals and workplace retirement-plan participants.