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Wirehouses in Recruiting Frenzy for Barclays Advisors

More Barclays advisors have left to join wirehouse rivals ahead of a pending sale to Stifel, raising questions about whether the departures will become a mass exodus.

Since the deal was announced Barclays has lost about 40 advisors, or approximately 20% of the firm's total brokerage force, according to On Wall Street reporting.

"The biggest concern is probably not who has left so far but who is yet to leave," says recruiter Ron Edde.

When the deal was announced, Barclays had 180 brokers managing $56 billion in assets and operating from 12 offices, all in large, lucrative markets like Chicago and New York.

Stifel said that the acquisition would add approximately $200 million to $325 million in revenue to the firm. Terms were not disclosed, however, so industry insiders say it's hard to judge if Stifel is set to pay the right price for the brokerage unit.

However, one thing is obvious, they say: It's a recruiting frenzy as the big firms have become fiercely competitive in trying to lure these advisors away.


"This is an anomaly you're seeing," says recruiter Rick Peterson, as normally Barclays' elite advisors would not be in play.

The most recent departures include a $3 million producer who joined UBS in New York. Advisor William "Monty" Cerf managed approximately $490 million while at Barclays.

A spokeswoman for Morgan Stanley acknowledged that five additional Barclays advisors joined the wirehouse, but declined to comment on their production or AUM.

Sylvia Gort and Marc Karetsky joined Morgan's Private Wealth Management offices in Atlanta and New York respectively.

Gort appears to have switched offices in the same building. Morgan Stanley Private Wealth Management is located at 3424 Peachtree Road, suite 1200, while Barclays' office is listed at the same address but at suite 950.

Barclays also lost three advisors in Chicago to Morgan: Bradley Bass, Norman Siegel and Brian Schneider.

Merrill Lynch, however, has emerged as possibly the biggest winner: Approximately half of the departing advisors have opted for Mother Merrill, including at least one team that managed $750 million in assets.

Last week, the wirehouse grabbed four Barclays advisors in New York: Robert Bestwick, Andrew Cardone, Mark Lagratta and John Mannix, according a person with knowledge of the moves.

"It looks like Merrill and Morgan have sent out some kind of signal that they want to talk to them and they have something terrific to offer them," Peterson says.

J.P Morgan Securities has also enticed away several Barclays advisors.

But so far none of the departing Barclays advisors, many of whom are legacy Lehman Brothers, have chosen to go independent or to a regional firm like Raymond James or Janney Montgomery Scott, despite recent trends of wirehouse advisors making exactly those kinds of moves.
This may be due in part to the unique books of many Barclays advisors, who do a lot of syndicate business (as part of the deal Stifel was to become the U.S. distribution partner for Barclays' new issues).

"Some can use this as a nice way to explain to clients that we are better off at Merrill or Morgan Stanley or wherever they are going," says recruiter Danny Sarch.

Another potential factor: Stifel is not a household name among ultrawealthy clients.

"I think Stifel is great company, but, at least right now, it wouldn't be considered in the same category as a brand as Barclays," recruiter Bill Willis says.

Last month, Stifel offered retention packages to entice advisors to stay with the firm. For example, an advisor generating $2 million in annual revenues could receive up to 150% of their production, depending on business mix, according to documents seen by On Wall Street.

To stem the tide of departures, Stifel reportedly sweetened the deal, according to a person familiar with the matter.


Some questions about the acquisition remain, such as whether Stifel may consolidate offices in cities where they already have a large presence, and what future Barclays branch managers have.

As of the moment, none appear to have been recruited away by rival firms, and due to recent consolidation in the industry, there aren't many new branch manager positions available.

"I don't expect that there will be a gold rush for the management. The production and the talent – everyone wants that," says Willis.

Although recruiters were divided as to how long the recruiting frenzy would continue, all those interviewed for this article expected that advisors would make a move before the deal closes in November. Transitioning clients to a new platform is a hassle, and no advisor wants to do it twice in a short period of time, they say.

In addition, many of the advisors and teams who have left are some of the larger producers at the firm.

"We're getting into the mid-tier people. So if you start seeing defections in that group, this could turn into an exodus. But I don't think you'll see that," Edde says.

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