"Our customized approach to wealth management is built on personal relationships with our clients and shaped by an understanding of those clients' needs and aspirations," UBS spokeswoman Karina Byrne says.
Merrill Lynch prides itself on its client-focused service, responded Lyle LaMothe, head of U.S. Wealth Management, Merrill Lynch Global Wealth Management.
"Our open architecture and fee structures ensure that clients have choice in how they do business with us," he says. "Our client satisfaction ratings are above 90%, with nine out of ten clients saying they would recommend their advisor to others."
Custodians and independent broker-dealers have reported a surge in the number of stockbrokers converting to RIAs. Schwab Institutional, for example, reported bringing 74 breakaway brokers into its fold in the first half of 2009, a 54% increase from a year earlier.
Based on interviews with several advisor teams who made the switch, last year's financial trauma and the lingering aftereffects have pushed many wirehouse reps to go independent after considering the change for years. In the end, they say, the biggest thing that had held them back from leaving-the security of working under a national brand name with deep pockets and the public's trust-vanished almost overnight. Once that happened, the decision became easy.
For Ben Marks, a breakaway broker who left UBS a year ago to affiliate with LPL Financial and form Marks Group Wealth Management in Minnetonka, Minn., the trend is part of a natural transition. Clients, he says, now have a low tolerance for investment advisors who work for companies that also sell investment products. They want the people who give them advice to be independent thinkers.
"This is part of a wave that has yet to crest," Marks says. "There's a lot more ahead."
A Broken Trust
After watching Merrill Lynch's culture change over the last year following its sale to Bank of America, Janet Wilson broke with the firm in March. "I didn't feel I was working for the same company I had worked with five years before," says Wilson, who established Janet Wilson Wealth Management in Mobile, Ala., and joined Commonwealth Financial Network.
During the 12 years she worked at Merrill, Wilson gradually transitioned to a fee-based model. But the more she moved toward fees for her clients, the more she ended up butting heads with a product-centric culture, she says.
Most of her clients have between $500,000 and $4 million in assets. Many are retirees who worked for manufacturing plants in her region for four or more decades, and their households typically rely on money from a 401(k) rollover, a pension and Social Security.