Citing high turnover, $4.5B Bank of America team decamps for RIA

Citing an overemphasis on finding new clients and high advisor turnover at Bank of America, a $4.5 billion team in the firm's private bank is decamping to a registered investment advisor.

Christopher Tate, a wealth specialist recently with Bank of America Private Bank, said he and four of his colleagues are moving to Tampa, Florida-based Fidelis Capital in part because of a desire to spend more time with existing customers and less trying to bring in new business. Tate also said high turnover among advisors at the private bank would often send him and others on his team scrambling to ensure clients saw no loss in service.

"And then, the independence I can't stress enough," Tate said. "It is liberating to have unlimited choices for my clients and the ability to say, 'I don't need to talk about this bank's corporate trustee capabilities. I can evaluate every corporate trustee that I know of that best fits your family's needs.'"

Bank of America didn't immediately respond to requests for comment.

Also taking their leave from Bank of America Private Bank are Michael Sellers, a portfolio manager; Benjamin Hilyard, a fiduciary specialist; Aaron Wall, a portfolio manager; and Ashley Connor, a client service associate. The team, based in the Washington, D.C., area, specializes in providing wealthy families with an array of planning services touching on everything from estates and taxes to healthcare and investments. 

According to Tate, Bank of America had every advisor on the team working with around 100 families. At Fidelis, he said, that figure will be reduced to about 25.

"From my perspective, if I'm going to sit down with a client and talk about their planning, it's hours and hours," he said. "And if I can't spend hours and hours, I'm not doing my best work."

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Sellers said the team is under a nonsolicitation agreement with Bank of America barring it from reaching out to former clients for six months. He declined to estimate how many clients and assets might eventually follow the team to Fidelis. 

Nonsoliciation agreements generally bar advisors from soliciting business from their ex-clients but do not prevent clients from re-establishing contact on their own.

"Part of this is getting word out there out of where we are for our clients so they can contact us," Sellers said. "If they want to continue to have the relationship, they think that we provide a good service as a team at the bank, because we have reason to think that we can do that even more, given the circumstances we have."

The firm they are joining, Fidelis Capital, was founded in Tampa, Florida, in 2022 by advisors and private bankers who had previously worked at Wells Fargo and Bank of America. Sellers said it now has roughly $750 million in assets under management. According to Fidelis Capital's latest Form ADV, filed on June 20, it has 16 employees, eight of whom have advisory functions.

Chayce Horton, an industry analyst at the research firm Cerulli Associates who contributes to its annual U.S. Private Banks and Trust Companies report, said large banks have made some strides toward giving advisors more leeway to offer clients a wide array of services. But the freedom at RIAs still tends to be much greater.

"When looking at the high net worth and ultrahigh net worth space specifically, service quality, client experience and access to advanced investment products and complex planning specialists is becoming imperative to sustaining a competitive advantage and to offering a superior value proposition," Horton wrote in an email.

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Unlike wealth managers that work with regular savers and investors, private banks usually cater only to the affluent and very affluent. They provide services related to everything from financial planning and investing to banking, philanthropy and family office management. Their clients, who usually need at least $1 million to get in the door, will often have a relationship with a single advisor or small team that seeks to tend to all their financial needs.

Fidelis is hardly the first firm to see opportunities in using the private banking model as a way to help wealthy clients and their families. JPMorgan's private bank announced the start in July of its own family office practice. And Goldman Sachs' plans to offer investors a "One Goldman Sachs" suite of services from all of its business units also includes a family office business.

Even with as much emphasis as big institutions are placing on their private banks, Tate predicted teams working with high net worth individuals and families will continue to be lured away by the advantages of independence.

"We've been doing this for 20 years," Sellers said. "We're not like someone who's only three to five years in the business. Senior teams are going to take a look at the landscape and realize that they have options. And there's better options for their clients than to be beholden to one institution or be in the four walls of any given bank."