Ex-Merrill FA On Moving to RBC: We Know What's Best
After nearly a quarter of a century at Bank of America’s Merrill Lynch, advisor Kyle Clements has moved to RBC Wealth Management. The Chapel Hill, N.C.-based FA is being joined by his longtime partner, Will Langdon. At the wirehouse, they managed more than $300 million.
For Clements, policy pivots by Merrill Lynch over the past few years raised concern about growth prospects for his practice down the line. “We’re not spring chickens in this business — at this point in our careers, we know what’s best for our clients,” he says. “If management is asking us to spend more time finding new business, it raises demands on our time that can take away from our efforts to serve existing clients.”
Such concerns are a common refrain these days by those moving away from U.S. wirehouses, asserts Danny Sarch, a White Plains, N.Y.-based independent recruiter. “That’s the biggest reason why the wirehouses are losing experienced advisors -- they’re managing to the lowest common denominator,” he says. “Either you’re on the verge of being a crook or in danger of doing something that’ll prove your incompetence. It’s become a more punitive environment in recent years.”
Clements won’t go that far. But at times, the veteran FA does admit he felt decisions made at the home office "weren’t in keeping with what was best for our practice’s book of business."
That said, overarching decisions by Merrill executives about how best to comply with the Department of Labor’s new rule for retirement accounts — which won't be fully implemented until 2019 — and how to work with millennials didn’t directly play into the team’s decision to move, according to Clements.
In fact, Clements says he and Langdon started researching different outside firms’ financial track records "long before the DOL rule and robo advice became prominent headlines" in wealth management.
“While none of those issues on their own directly impacted our business,” Clements adds, “we were still struck in thinking about a move that Merrill’s decisions made on behalf of such a large organization could wind up limiting our options in how we choose to service our clients and grow our practice over the longer term.”
The recruiting win comes on the heels of several other recent moves by veteran wirehouse advisors to an arm of the Royal Bank of Canada. It also follows a push by RBC’s wealth unit to pump up resources and services for employees and a small but growing cadre of independents.
As reported earlier, Michael Parker has been recruited from HighTower to head RBC’s recruiting efforts in its employee-advisor unit. Also, Nate Angelo from Columbia River Advisors has been brought in to lead the firm’s internal, FA-centric consulting efforts.
The Clements-Langdon team represents RBC’s first dedicated branch in the Chapel Hill-Durham marketplace. Clements and Langdon have moved into new offices built by RBC. The new digs come with space for a “significant” addition of staff and resources, he adds.
“That was a big part of our reason for coming to RBC -- they’ve shown a tremendous commitment to building our presence in this growing wealth marketplace,” says Clements.
In terms of compensation, Clements characterizes joining RBC as a “sideways” move. “We felt that the culture and technology at RBC will give us a better opportunity to grow in this market,” says the 49-year-old advisor. “We’re young enough where this isn’t a decision based on short-term compensation or client-servicing needs. This is a move made to improve our ability to shape our growth over the next 15-plus years to fit our unique book of business.”
Recruiter Sarch, who doesn’t have direct knowledge of Clements’ situation, does recommend to wirehouse advisors who are thinking about moving to closely evaluate home office compliance policies and pressures to move upstream to service higher-end investors.
He warns that Merrill’s push to offer robo services threatens to cannibalize growth for many of its advisors in coming years.
“It isn’t just going to cut out potential new business with promising younger families,” he says, “but it’s also disregarding to a large degree how relationships are built with older and more established professionals.”
After all, Sarch observes, high net worth and ultra-HNW investors “usually don’t start out by handing over their entire portfolios" to a new advisor. Rather, he says, “They tend to do it much more gradually over time."