First Republic Founder Says Advisors Are Proving Their Worth
First Republic Bank’s wealth management unit, whose recent high-profile recruits included Merrill Lynch superstar Phil Scott, recorded a 20% increase in third-quarter assets and a 10.5% jump in revenue, the San Francisco bank said on Tuesday.
Brokerage and money-market fund assets climbed 20.3% to $81.2 billion as of September 30, as brokers gathered $4.6 billion in new client assets. Brokerage assets represented $76.8 billion of the total.
Overall client assets across First Republic’s brokerage, investment management and trust company businesses were up just under 20% to $168.2 billion from $140.2 billion a year ago, and rose more than 7% during the July-September period.
Rebounding equity markets following the initial coronavirus market decline helped, but the asset gains surpassed the 8.5% jump in the S&P 500 last quarter.
Herbert said the bank benefited from its recruiting of high-end advisors. First Republic has hired seven wealth teams year-to-date, including three last quarter, putting it on pace to surpass the 10 teams it recruited last year.
Third-quarter recruits included Scott, a longtime Merrill broker in Seattle who sources said produced $18 million in annual revenue, a $12 million New York City team from J.P. Morgan Securities and an $11 million UBS team in Los Angeles.
Herbert, however, lowered expectations for fourth-quarter recruiting.
“The last part of the year is the slowest part in terms of hiring new teams, generally,” he said.
Revenue throughout First Republic Wealth Management was up 10.5% from the 2019 third quarter to $126.8 million, representing 12.7% of the bank company’s total quarterly revenue.