UBS Loses Two Teams in the South Producing Almost $17 Million
UBS Wealth Management USA has lost two teams of 13 brokers in the South who were generating almost $17 million in production in the past week.
The group includes UBS senior vice presidents Stephen Rice, James Kline, Andrew Cundiff and Jamie Holman, together with UBS vice president Harold Keith Henderson and first vice president Nathan Collums. They were part of a larger team called OakRing Investments, which includes three remaining UBS advisors in Montgomery, Ala., one in Birmingham/Chattanooga and one in Atlanta, according to the team website and the sources.
“It’s a big and unexpected loss” for UBS’s Deep South geography, said an internal source. Another source outside the firm said the UBS team spent about a year on due diligence before accepting the Wells offer.
Rice had been with UBS and predecessor PaineWebber since the start of his brokerage career in September 1997, while Kline joined UBS nine years ago after 16 years with Merrill Lynch, according to their BrokerCheck histories.
Cundiff similarly spent the first half of his 23-year career at Merrill before moving to UBS in 2008, while Holman also worked at Merrill for 16 years before joining UBS in 2008.
For Wells, the midweek hires represent at least the sixth team to join its scandal-depleted brokerage force this month. At least five other groups managing about $570 million have joined Wells offices in California, New York City, Connecticut and Florida from UBS and Morgan Stanley in the past two weeks.
In St. Petersburg, Florida, a team of seven UBS advisors led by Matthew Kilgroe left on Friday to start a registered investment advisory firm they christened Cyndeo Wealth Partners, according to an announcement. Kilgore and his team had been generating almost $9 million in revenue from around $1.2 billion in assets, according to Dynasty Financial Partners, which is providing support services for Kilgroe’s team.
“We wanted to have as much autonomy as we could,” Kilgroe said in an interview. “When you’re inside a wirehouse, you can utilize the products and services they have, but a lot of times that may not be the best situation for every client.”
Other advisors at the RIA are Peter Frantzis, Eric M. Branson, Thomas M. Kidwell, Christopher Ryan Quinty, Nathan Johnson and Adam Hess. Their new firm, which takes its name from a Greek word meaning ‘connect,’ custodies with Fidelity Investments and brokers through Purshe Kaplan Sterling Investments. A 29-year industry veteran, Kilgroe worked for 20 years at Merrill Lynch before joining UBS in 2012.
He said the team does a lot of lending for their clients, who are wealthy families, pro athletes and entrepreneurs, and wanted to be able to look outside UBS’s own bank for better rates and also wanted access to a wider variety of alternative investments through providers such as alternative funds platform iCapital Network.
Frantzis and Kidwell also began their careers at Merrill in 2006 and moved to UBS six years later, while Quinty began his career in 2011 with Merrill and joined UBS in 2013 according to their BrokerCheck histories. Branson joined UBS in 2012 after 16 years in St. Petersburg with Raymond James, Smith Barney and its successor firm Morgan Stanley, according to the database. Johnson and Hess began their careers at UBS four and two years ago.
For UBS, the departures continue a steady decline in the size of its U.S. brokerage force, which internal sources said has fallen almost 5% to 5,968 brokers servicing U.S. clients today from around 6,275 a year ago. The numbers make UBS’s force less than half the size of its three national “wirehouse” competitors—Morgan Stanley, Merrill Lynch and Wells Fargo.
A spokesman for UBS declined to comment on the moves or the firm’s strategy.
The U.S. unit of the Swiss banking giant retreated from aggressive recruiting of experienced advisors four years ago, focusing on reducing its overhang of forgivable loans.
Like its competitors, it has been emphasizing retaining advisors with loyalty bonuses and other awards for working on teams and selling bank products. However, UBS also this year raised hackles by raising thresholds on “grids” that determine brokers’ pay. (It has delayed by three months implementation of higher hurdles for team-based payouts that were to have become effective on July 1 in recognition of disruptions caused by the coronavirus pandemic.)
In addition to the teams that left UBS this month for Wells, Rockefeller Capital, and Raymond James Financial, three UBS teams managing more than $800 billion left for RBC Wealth Management and Wells Fargo last month ahead of the Memorial Day weekend, along with a high-profile broker in Houston who joined Morgan Stanley and a Washington, DC-area team producing $7.5 million who joined Wells.
UBS has “selectively” been recruiting as well, with a particular focus on advisors who service very wealthy private banking clients. It hired a three-person team in Dallas last month from Sanford C. Bernstein who were producing about $13 million.