When HighTower recently landed the head of a team overseeing $500 million in client assets at Oppenheimer, the move illustrated a nagging problem when groups split: Who gets the clients after a divorce?
Although most teams stay together, it is not unusual for a group to split up, or lose members. Some advisors stay behind at the old firm, others move on to a new home. Where the clients end up can be a sensitive subject.
That was the case with HighTower's newest addition, Carol Nulman. Nulman split with her group at Oppenheimer to join HighTower in Providence, R.I.
And the clients?
"We expect the majority of the clients to continue their relationship with Oppenheimer," says Mark Whaley, executive vice president of Oppenheimers private client division.
SWEETENING THE DEAL
Nulman and her former teammates declined to comment on the reason for the split. Nulman, however, explains why she made the move to HighTower in an email she sent via a spokeswoman:
HighTowers commitment to the fiduciary standard aligns with my dedication to serving the best interests of my clients as an independent financial advisor. The opportunity to grow my practice in the company of our industrys best and brightest was irresistible to me as an advisor and as a business owner."
Pollard started her advisory career in 2000 and Wallace in 2007. Both previously worked with Nulman at Smith Barney before joining Oppenheimer in 2009.
In an email, Pollard and Wallace explained why they are sticking with Oppenheimer.
"Although the financial incentives to move are significant, we believe that the broad platform at Oppenheimer and direct access to significant intellectual capital are in the best interests of the clients. Oppenheimer provides a strong balance sheet and continuity of senior management, which we believe are in the best interests of our clients."
Whaley, executive vice president of Oppenheimers private client division says Pollard and Wallace will be joined by returning team member Gerry Nelson, a registered client service associate who had retired. The team has dropped the name the Nulman Group as well.
Whaley explains that the two advisors and the addition of Nelson "will further ensure that the clients receive the uninterrupted service they have come to expect from Oppenheimer over the years."
While Oppenheimer declined to further specify how the firm and team intended on keeping the clients, recruiter Howard Diamond offered some possibilities.
"The firm that has lost the advisors, they'll give that [remaining] partner a lot of resources to call the clients and say, 'Listen Joe and Jane left, and I want you to stay, and here's what we can do for you,'" he says.
For example, those actions can include offering a discount on fees charged.
"Firms sometimes do a little sweetener to keep the clients there," Diamond says.
HighTower, meanwhile, appears to be banking in part on Nulman's experience, which dates back to 1983, and the firm's transition team. To date, HighTower has completed 61 transitions, including some advisors who left partners behind. "That instills a lot of confidence in advisors like Carol that we know how to do this," says Michael Parker, national director of enterprise development at HighTower.
"Carol's 30 plus years of experience with her client base is just that: it's Carol at the helm managing those relationships Will she bring over the book of clients she was managing at Oppenheimer? The answer is yes."
EXPECTING CLIENTS TO FOLLOW
Who eventually wins in this tug of war? It's hard to predict, says recruiter Michael King, as it's ultimately up to the clients themselves.
"Obviously, the junior people think they can keep some of those clients or they wouldn't have stayed," King says.
He adds that "sometimes the senior person doesn't have as much daily contact with the clients. So the junior people sometimes think they have more of a relationship with the clients."
However, Nulman wouldn't have made the move if she didn't think that the clients would follow her, King says. He adds that part of Nulman's efforts will have to include explaining to clients that they can get the same products and services at HighTower that they received at Oppenheimer.
I have received very positive feedback from clients about joining HighTower as they realize the transition was made with their best interests at heart," she says in an email about her clients moving. "With more than 30 years of experience, my clients also know that I am a student of the markets with an ability to navigate through volatility while understanding macro trends.
Regardless of whether any of these tactics work, it shouldn't take too long for a winner to emerge, says Diamond.
"Quite frankly, if you can't bring over your clients within a month or two month period then you are not going to bring them over."
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