More ex-First Republic advisors exit JPMorgan for smaller firms

With some former First Republic teams in the midst of migrating clients and assets over to JPMorgan's internal systems, others are moving out.

The latest departures were made public on Friday with the announcements that three separate teams managing $10 billion in total will be leaving JPMorgan to join Citizens Financial Group and Cresset. The groups, all based in San Francisco, are made up mostly of former employees of First Republic, a now defunct bank that JPMorgan bought last spring out of government receivership for $10.6 billion. Those announcements came after Bank of America's Merrill said earlier in the day that it had picked up a group of former First Republic advisors who had been managing roughly $3.5 billion in Florida.

Of the other three teams that publicly confirmed their departures on Friday, two are going to Cresset, a Chicago-based firm that specializes in working with ultrahigh net worth families and clients. The third team is headed to Providence, Rhode Island-based Citizens, which has been pursuing its wealth management goals in part by hiring former First Republic advisors away from JPMorgan.

Erik Ralston, now a managing director at Cresset and a lead wealth advisor on one of the departing groups, said it was evident he and his colleagues would eventually have to decide if they wanted to move their practice over to JPMorgan. Meanwhile, he said, he had fielded more than two dozen calls from firms wanting to become the new home for him and the four others on his team.

Ralston said he knew he wanted to work with wealthy clients through what are known in the industry as family offices. These types of practices generally consist of advisory groups providing services to a small number of ultrahigh net worth families or to a single family.

Ralston said he thinks the term "family office" is thrown around too much these days and has begun to lose its meaning. One of the most appealing aspects of Cresset, he said, is the way it holds to a strict definition.

"A family office is an independent investment advisor that's founded by the client," Ralston said. "It can't be founded by the advisor or by the bank."

"When an advisor owns an entity, chances are their intent is to sell it," Ralston added by email. "If the owner is the family receiving the services, they are less inclined to sell the entity and diminish the value of the services."

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Ralston credited Cresset for developing perhaps the only practice in the industry that can support thousands of family offices. The firm, which has more than $45 billion under management, offers services ranging from estate and tax planning to private banking and access to alternative markets.

"It requires a lot of institutional knowledge and it's a major lift," Ralston said. "You need professional management and a platform to do all that. So my opinion is pretty clear; I'm voting with my feet."

Ralston, who has 16 years of industry experience and was at First Republic from 2015 to 2023, leads his team with Chris Chase, who has 23 years in the industry and was at First Republic for the same period. They were among the more than 200 erstwhile First Republic advisors who suddenly found themselves employees of JPMorgan after the megabank bought their former employer out of government receivership in May last year.

Ralston said he never really got to know what it would be like to work at JPMorgan because his clients and business had yet to be moved over to the bank's internal systems. Industry recruiters have been predicting, though, that the fit was not likely to be comfortable for former First Republic employees.

Jeff Nash, the CEO and co-founder of the recruiting firm Bridgemark Strategies, said many ex-First Republic advisors started their careers at wirehouses and likely chose to move on to a smaller institution because of the promise of enjoying greater independence.

"First Republic really wasn't a bank that happened to have a wealth management arm," Nash said. "It was all about the advisor. You'd hear advisors talking to advisors and saying it was like no place where they had ever worked."

Like Ralston's team, the other group joining Cresset and the one going to Citizens are out of San Francisco. Ralston said the location puts his advisors in a good place to manage the wealth amassed by families and individual clients who have made their fortunes in Silicon Valley.

The other team joining Cresset consists of nine advisors led by Dagny Maidman, a 17-year industry veteran also at First Republic from 2015 to 2023. That team, combined with Ralston and Chase's team, managed roughly $5 billion for 160 households.

The team joining Citizens is a 12-member practice that also managed $5 billion in assets for ultrahigh net worth clients. It's led by three former First Republic employees: Rick Gordon, a senior managing director with 16 years of industry experience; Hugh Beecher, a senior managing director with 24 years of experience; and Andrew Curto, a managing director with 11 years of experience.

Their move comes after Citizens announced last week that it had hired the industry veteran Paul Casey from Morgan Stanley to oversee its wealth management business. Gordon, Beecher and Curto's team will be under Citizens' private wealth division, which is overseen by Tom Metzger, himself a former First Republic employee.

"The Citizens platform is designed for high-caliber wealth managers like Rick, Hugh and Drew who are dedicated to meeting the complex needs of their clients," Metzger, the senior vice president of Citizens Private Wealth Management, said in a statement.

— This article has been updated with an additional comment from Erik Ralston.