JP Morgan Ends Big Recruiting Week with Beantown Loss
While J.P. Morgan Securities was writing big checks last week to nab marquee Morgan Stanley brokers across the U.S., it lost a veteran team in Boston to another opportunistic recruiter, First Republic Bank.
The aggressive San Francisco-based bank hired Jeff Sherman and Art Karabelas, who worked together for more than 20 of their respective 30-year and 28-year careers as registered reps at Advest/Merrill Lynch, Tucker Anthony/RBC Dain Rauscher and Lehman Brothers and Oppenheimer in the Boston area before joining J.P. Morgan about four-and-a-half years ago.
They arrived at First Republic on Friday with Okita Sevi, another advisor with roots at Merrill and predecessor firms Bank of America Investment Services and Quick & Reilly. Along with a client associate, the team produced about $3 million of fees and commissions in the previous 12 months and oversaw about $400 million in client assets, according to a person familiar with their practice.
The advisors, each of whom were given managing director titles at First Republic Private Wealth Management, did not immediately return calls for comment on their reasons for the jump.
First Republic, has been aggressively recruiting advisors from large firms in the past two years, dangling signing packages that can reach 300% of trailing-12 production in upfront and deferred money, according to headhunters and brokers. The hires have focused on former Merrill brokers in California and New York but First Republic also recently nabbed a $5-million-in-production team from UBS Wealth Management in San Francisco.
The opportunistic moves by the big banks come as the wirehouses have retrenched from recruiting experienced brokers with multi-million-dollar forgivable loan packages, and as Morgan Stanley has withdrawn from the Broker Protocol in an attempt to keep its advisors from jumping. As reported, J.P. Morgan and several other broker-dealers hurried to recruit Morgan Stanley brokers last week between the firm’s announcement on Monday about leaving the Protocol and its effective date on Friday.
Going forward, Morgan Stanley brokers will not unilaterally be able to take client-contact information with them to jump-start their practices at new firms by following Protocol rules.
“With our exit from the Protocol, advisers are subject to the terms of any applicable client non-solicitation restrictions and/or confidentiality obligations, including restrictions on removing client-related information,” a Morgan Stanley lawyer wrote in a memo to brokers last week.
Sherman and Karabelas’ careers crossed in the early 1990s at Lehman Brothers, leading them to move in tandem between 1994 and last week to CIBC Oppenheimer (spending six years there), Tucker Anthony/RBC Dain Rauscher (six years) and Advest/Merrill (nine years), according to their BrokerCheck records. They joined J.P. Morgan Securities, where each held the title of executive director, in April 2013.