Asked about the asset attrition over the last two years as competitors pounced on the firm’s clients, Elmes said only that it is a “very competitive” business. The new Pathstone Federal Street principals had a “tough 24-month period” and really managed to “work together.”

In many ways, Convergent is an excellent fit for Pathstone Federal Street. Both firms specialize in working with first-generation wealth. These individuals are focused on preserving their wealth for subsequent generations. Both firms also use Schwab as their custodian and have similar reporting systems. Convergent's average client has about $30 million in assets, which is close what Federal Street has and somewhat below the typical Pathstone family. Many of the latter own closely-held businesses.

Pathstone Federal Street is also a major client of City National, according to Braverman, who had run Harris myCFO before launching Pathstone. Harris Bank is owned by Bank of Montreal while City National is owned by Royal Bank of Canada, so both teams share the experience of being arms of U.S. banks owned by Canadian banks.

Elmes added that Convergent has a slightly different “West Coast” flavor. Given that the region is where so much new wealth is being created, it may also be a good fit.

Prior to the tragic events of October 2014, Convergent had enjoyed a stellar reputation. In the year before his death, Zier was ranked No. 5 in Barron’s list of top advisors. Convergent’s founder, Steve Lockshin, held the No. 1 spot in 2011.

By 2014, Lockshin, a serial entrepreneur, was winding down his involvement with Convergent and investing in other start-ups, including robo-advisor Betterment and Advice Period, an RIA consolidator attempting to do lift-outs of wirehouse teams similar to Hightower.

The problem of special side deals and funds for a handful of clients, often unbeknownst to senior management, has bedeviled both the RIA and brokerage businesses. In the B-D world, the practice is called “selling away” and the firms are held responsible.

Sources said that participants in Zier’s “family and friends” hedge fund were made whole. RIAbiz, which covered Zier’s suicide and the subsequent events in detail at the time, reported that he was psychologically influenced by the 2008-2009 financial crisis and believed another market collapse would occur. Tragically, the fund, which never had more than $20 million, was established for those closest to him.
 

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