Deals & People May 1, 2023

JPMorgan’s First Republic Takeover Brings Chance of Keeping 150 Wealth Advisers

JPMorgan CFO Jeremy Barnum cites wealth management division as positive amid a deal the bank “did not seek out.”

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JPMorgan Chase & Co. announced Monday it has acquired the substantial majority of the assets of First Republic Bank from the Federal Deposit Insurance Corp., along with its vastly reduced wealth management advisory team with offices around the country.

JPMorgan will be taking on about 150 wealth advisers from First Republic, Jeremy Barnum, chief financial officer for JPMorgan, said during a conference call with analysts Monday morning. The CFO cited the positives of an expanded reach to high-net-worth clients, along with well-placed locations, while admitting the bank will need to woe some of the “high quality advisers.”

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“We did not seek out this deal, but it does have financial benefits, as well as enhancing our market positions and accelerating some of our key growth opportunities, particularly in wealth management,” Barnum said on the call.

San Francisco-based First Republic reported in its last earnings call for the first quarter of the year that it had $289.5 billion in wealth management assets. The beleaguered bank also noted it had been losing some advisers, who appear to have been reduced further from the more than 300 wealth managers still listed on First Republic’s website.

“We’ve had a number of adviser teams from First Republic reach out on an unsolicited basis over the past several weeks who are interested in joining JPMorgan, which as a starting point is encouraging,” Barnum said on the call. “We believe that our brand, the investment banking capabilities and our research will make us a firm of choice for many of these advisers.”

He added that the bank understands that “these are really good teams with high-quality advisers who have choices.”

New York-based JPMorgan has been public about its desire to recruit more financial advisers during annual investor days in recent years. The bank’s next investor day will be on May 22.

Pershing LLC, a division of the Bank of New York Mellon Corp., has acted as custodian for First Republic Bank’s wealth division. JPMorgan did not immediately respond to request for comment on the future of the wealth management setup.

The FDIC took control of First Republic on Monday after more than a month of uncertainty following increased scrutiny of the bank’s uninsured deposits and exposure to low-interest-rate loans in the wake of March banking failures at Silicon Valley Bank and Signature Bank. First Republic reported more than $100 billion in deposits flowing out of the bank in the year’s first quarter.

JPMorgan Chase is not assuming First Republic’s corporate debt or preferred stock, according to the announcement.

CFO Barnum said on the call that First Republic service platforms and technology, as well as some branches in key locations, will be moved over to JPMorgan’s infrastructure over time.

Deals & People May 1, 2023

Advisory M&A

Modera Wealth Management announces acquisition of Parsec Financial; Modern Wealth Management acquires Barber Financial Group; and more.

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Modera Wealth Management Acquires Parsec Financial

Modera Wealth Management LLC announced that the Parsec Financial team is joining Modera.

The transaction creates one of the largest independent wealth management firms on the East Coast, with more than $10.5 billion of assets under management and more than 180 employees across 14 offices between Massachusetts and Florida.

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Modera will remain independently managed and majority employee-owned. All of Parsec’s employees have joined Modera, and 24 of those employees have become Modera owners.

“Our two firms have succeeded thus far in large part because we share the same mission: to deliver sophisticated, fee-only wealth management in a highly personal way,” said Rick Manske, Parsec’s former CEO, in a statement. “Now, we have the unique opportunity to join forces and do that same work together as one stronger organization.”

Modern Wealth Management Acquires Barber Financial Group

Modern Wealth Management announced it has acquired the assets of Barber Financial Group, Osiwala Financial Group and Financial Security, collectively known as Barber Financial.

Barber Financial has offices across Kansas, Missouri and Michigan, serving more than 2,300 clients with more than $1.5 billion of collective assets under management.

This acquisition is Modern Wealth’s first transaction after its April founding, which was backed by $200 million in equity financing from Crestview Partners.

“Mike, Gary and I are very happy to launch the business with Barber Financial Group as our first acquisition,” said Jason Gordo, president of Modern Wealth, in a statement. “We will continue to leverage our capital resources in order to build Modern Wealth into a national firm that fulfills investors’ needs while continuously prioritizing the client experience.”

Wealth Enhancement Group Expands by Adding New Era Financial Advisors Inc.

Wealth Enhancement Group LLC announced the acquisition of New Era Financial Advisors Inc., a hybrid RIA located in both Wayzata and Hutchinson, Minnesota. 

New Era Financial Advisors’ team of six advisers and 11 support staff, led by Donald Warner, Grant Lindaman and Shad Ketcher, oversee more than $1.1 billion in client assets. 

“After four decades as a private, independent firm, the partners and advisors at New Era Financial are excited about joining forces with Wealth Enhancement Group, another well-respected Minnesota firm,” said Warner. “We feel our clients will greatly benefit from the additional services and resources Wealth Enhancement Group offers as a nationwide advisory firm.” 

Burnham Harbor Private Wealth Joins Sanctuary Wealth

Sanctuary Wealth welcomed Burnham Harbor Private Wealth, a Chicago-area Merrill Lynch practice with $1 billion in client assets.

The Burnham Harbor team provides wealth management solutions to high-net-worth families through financial guidance, legacy implementation, estate coordination, risk management strategies, retirement lifestyle continuation, tax minimization and transition counseling.

“Sanctuary was created to provide firms like Burnham Harbor the ability to confidently break away from wirehouses and enjoy the benefits of independence,” said Vince Fertitta, Sanctuary’s president of wealth management, in a statement.

“While we knew we had outgrown the wirehouse, our team didn’t want to go out on our own,” James Corrigan, managing partner at Burnham Harbor said. “In Sanctuary, we found a partner that provides the right balance of support, freedom, flexibility, and optionality we were looking for in a new home.”

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