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Options Niche Leads Morgan Stanley Advisor to RBC

By Murray Coleman June 15, 2017

After nine years at Morgan Stanley, Houston-based advisor Kevin Roberts has joined the U.S. wealth management group of Royal Bank of Canada. At Morgan Stanley – where advising on corporate stock and options plans was his practice niche – he managed more than $300 million and generated annual revenue of $1.4 million. Before working there, Roberts spent eight-plus years at Merrill Lynch.

Q: Why did you decide to leave Morgan Stanley?

A: I run a specialized business model that focuses on corporate and executive services. That means my practice assists firms with their stock and options programs. I also help companies with compliance and monitoring of their trading reports for executives.

Q: So this is a pretty refined niche?

A: Many of the wealth management clients that I advise are individuals and executives I’ve worked with over the past 20 years on the corporate services side. But this is my sole niche.

Q: Why did you make the jump from Morgan Stanley?

A: Morgan Stanley has been retiring its proprietary corporate and executive services platform. In November of last year, it announced a broad move to outsource that work to another firm. At that point, I felt like it was time to find another platform to serve our clients' needs.

Q: Is RBC one of the few wealth managers playing in this field?

A: There are others. But when you look at sheer numbers of clients serviced under this type of niche, RBC clearly is a market leader. I still took my time to go through an intense vetting process. I wound up talking to several other national wirehouses as well as independent broker-dealers.

Kevin Roberts

Q: What in particular were you looking at from a competitive standpoint?

A: Operational capacity and institutional efficiencies were two big factors in my decision. The systems in place at RBC are going to allow us to spend a lot more of our time with clients – it’s set up to handle many of the administrative chores through centralized automated workflow technologies. So we think this is going to be a much more advanced technology platform for our unique clientele. In the past, the home office left a lot of the back-office responsibilities to our branch office.

Q: How did you get into this type of business?

A: I started out doing workshops for company employees back in 2000. These were forums to help educate executives about how to best take advantage of their corporate stock options and benefits plans. Then in 2008 a Fortune 500 company actually approached me about helping to administer its plan and set up an educational program for all of its employees.

Q: That led to a highly specialized business practice?

A: Yes. Today I advise roughly two dozen different firms. These vary in size from small- to large-cap companies. I believe there are fewer than a dozen out of about 1,800 advisors at RBC who are doing this sort of niche. At Morgan Stanley, there were fewer than 40.

Q: What does this niche comprise?

A: First and foremost, I’ve got to have very in-depth knowledge of a company’s equity compensation plan. A lot of similarities exist between corporate plans but each firm has its own customized package for its particular employee base.

Q: You’ve also gone through outside training in this area, haven’t you?

A: Yes, I studied for and earned the Certified Equity Professional designation. The CEP program is offered through Santa Clara University. The coursework provides training on administration topics, taxation issues and compliance matters revolving around equity compensation awards.

Q: How long did it take you?

A: It took two years to complete. There are three levels of studies and tests involved in the process. I did all of my studying online, but to take the tests I had to go to specific proctoring locations. One of those is in Houston. The tests are only given twice a year.

Q: Did you consider going fully independent?

A: I did but it became too difficult from an operational point of view to fully service my corporate clients and my private wealth clients by going independent. RBC was one of the few firms that had all of the lending, cash management, research and robust fixed-income platforms this sort of practice needs.

Q: Your tenure falls into the window when wirehouse upfront bonus provisions typically run out. Did that have anything to do with the timing of this move?

A: No it did not. I was free of any repayment of loans from my previous employer. This decision centered on the timing of Morgan Stanley’s movement around its stock administration plan platform.