Merrill's $1.2 billion Santa Fe hire buys credentials, not scale

John Vazquez and Manuel Monasterio have joined Merrill Wealth Management in Santa Fe, New Mexico, arriving from UBS with $1.2 billion in client assets, InvestmentNews reported, and they report into Merrill's Desert Mountain market under market executive Elaine Darnell and travel with four support staff: Christine McCabe, Lisa Villareal, David Marquez and John Snyder. The bench is the part of a lift-out that determines whether the book behaves like an asset or a rental.

What Merrill is buying alongside the assets is a pair of credentials pointed at the two events that actually move wealth between generations: Vazquez is a Chartered Advisor in Philanthropy, and Monasterio carries the Certified Private Wealth Advisor, Certified Exit Planning Advisor and Accredited Asset Management Specialist designations with more than 20 years in the industry. Charitable intent and business-sale readiness are the two doors a family's assets walk through on the way out of an advisor's care—the capabilities that will decide retention as the $83.5 trillion transfer works through the next decade.

The resumes also measure how hard these two were to move. Vazquez began at Dean Witter in 1983 and joined UBS in 1999—more than four decades in the business and most of it on the platform he just left—while Monasterio started at A.G. Edwards in 2003, moved to Wachovia after the acquisition, and went on to UBS, three employers and two migrations later, one settled by a merger he had no say in. Advisors who have watched a merger from the inside know what a platform change costs a client relationship, which is why two advisors who could price the disruption chose to do it, and that is worth more than the headline number.

Merrill's traffic ran the other way in the same roundup: Michael Rogala, a managing director who oversaw approximately $550 million in client assets and spent 15 of his 20 years in the industry at Merrill Lynch, joined Raymond James & Associates' employee channel in Houston under the Alex. Brown-Raymond James private wealth banner, working with families and entrepreneurs preparing for or considering a business sale. On the cold ledger, the dispatch nets Merrill about $650 million, but by client type it reads worse, because the advisor Merrill just lost serves the same business-owner client as the exit planner it just hired.

Rogala described his own reasoning in terms a retention desk should sit with: after evaluating the private wealth platforms available to serve ultra-high-net-worth clients, he said he chose Alex. Brown because its capabilities align with the complex needs of the families and entrepreneurs he advises. Edward Sudzina, Raymond James & Associates' Southwest regional director, credited exactly that experience in calling him an excellent addition to Alex. Brown and RJA.

Wedbush made its own addition in the roundup, adding the Redstone Wealth Management Group in Greensboro, North Carolina, as it extends a Southeast footprint. The group—James Carlson and Kevin E. Herron Jr., both CFPs and managing directors of investments and portfolio management, along with senior strategic wealth advisor Patty Blair and client service associate Sherry Malone—reports more than $500 million in assets under management and previously built its practice at UBS Financial Services. Carlson said the practice went looking for a long-term partner as it grew and found one offering scale, resources and, in his word, an entrepreneurial mindset; Chris Mone, Wedbush's head of wealth management, called Redstone one of the most respected advisory teams in the region.

Carlson's adjective is doing real work. A team that has already sat inside a merger prices 'entrepreneurial' differently from one that has not, and the Greensboro group joins the Santa Fe pair in having watched a platform change from the inside. Regionals and employee channels have been running that pitch with some success: our own tally in mid-August had four independent firms landing wirehouse teams in a single week, and Wedbush's buying tends to make a regional more interesting to an acquirer rather than less—the argument about the busiest non-wirehouse buyers.

Add the disclosed numbers—$1.2 billion to Merrill, $550 million to Raymond James, Wedbush's stated floor of more than $500 million—and better than $2.25 billion of client assets sits in a single dispatch, none of it headed to an independent: two employee channels and a regional broker-dealer. The block trades and employee-channel retention that mark the current shape of the talent war are what the contest looks like at this size.

The sourcing cuts against a September trend line. The Santa Fe team left UBS outright, and the Greensboro group's $500 million-plus traces to a practice built at UBS Financial Services, which puts a firm that on September 3 was pulling away in the advisor talent race alongside Merit on the giving side of the largest single move here. One roundup cannot overturn a 30-day activity log, and nothing in it says UBS has lost its recruiting footing. It does make the next log the interesting one.

The three moves share a currency: Merrill bought a philanthropy and exit-planning bench in Santa Fe, Raymond James won a business-owner specialist on capabilities, and Wedbush sold attention to a four-person team, and the coverage of all three describes platforms rather than packages—the test of the argument that the recruiting check has given way to continuity, credentials and channel economics. Watch Houston next: Merrill can book a net gain on the ledger while leaving its business-owner bench a specialist short.