Behind First Republic’s Allure: 300% Signing Package and Referrals
First Republic Bank has become one of the few games left in town for multi-million dollar brokers frustrated with wirehouse bureaucracy but unwilling to run their businesses without a big-name bank behind them, according to advisors and recruiters asked to explain the company’s hiring spree.
It also helps that the San Francisco-based bank is offering relatively fat deals at a time when Merrill Lynch, Morgan Stanley and UBS Wealth Management have been retrenching, they said.
The signing bonus for brokers who have been generating $2 million or more in production is roughly 250-300% of the revenue an advisor or team has generated over the previous 12 months. About 200% is offered in cash as a nine-year forgivable loan, with the back-end remainder coming as various revenue hurdles relative to the previous year’s production are hit.
“Money isn’t the only issue,” said Alex Huang, a San Francisco-based recruiter who said advisors are attracted to a less bureaucratic structure than they’re finding at larger bank-owned brokerage firms.
As First Republic began revving up its wealth management engine three or four years ago, new advisors also benefited from an infrastructure of private bank associates, some of whom are somewhat ambiguously labeled as “investment or portfolio managers,” who would generate good referrals. However, the referrals appear to be thinning as the field gets more crowded, Huang said.
A First Republic spokesman declined to comment.
The recruiting efforts are led by former Merrill Lynch Private Banking and Investment Group executive Brian Riley on the West Coast and by Susie Cranston, a former McKinsey consultant who focuses on East Coast expansion. Neither official returned requests for comment.
The bank has branches in 68 U.S. locations, according to its website. The bulk are in California but First Republic has been expanding into wealthy urban areas such as New York and Boston, housing its offices largely with emigrants from wirehouses and foreign banks such as Credit Suisse that have closed their U.S. brokerage units.
The bank is expected to be recruiting advisors for new locations in New Jersey and in Seattle by year-end, according to two sources.