Yet another wealth management team has bolted First Republic Bank, this time a team from San Diego that has left for Lido Advisors.
Lido announced that the team of Pete Morimoto, Roy Elliott and Jon Jewitt have joined the Los Angeles-based Lido from First Republic, the troubled San Francisco-based bank that was seized by regulators and then sold to JPMorgan in a forced sale earlier this week. Morimoto’s team joined First Republic from Wells Fargo in 2019 to provide wealth management strategy.
Jason Ozur, Lido's CEO, told Financial Advisor that the team has around $1 billion in assets under management, give or take, and that it’s growing. The team's clients generally have assets in the $5 million to $100 million range, he said.
Morimoto has 26 years of wealth management experience and has served high-net-worth families for 21 years, according to the Lido press statement. Before joining First Republic, he was senior vice president of investments at Wells. Elliott and Jewitt came with the team joining him from Wells Fargo in 2019 and they also have more than two decades of experience apiece.
Joining them at Lido are team members Sam Hoeck and Heather O’Connor, who each worked at First Republic Bank for the last four years, Lido said.
News reports said at the time of their 2019 move that Lido’s new San Diego team oversaw some $1.5 billion in assets at Wells Fargo.
First Republic has been at the center of a banking crisis since March after it was hit with massive withdrawals of $100 billion in deposits and faced serious questions about how its pursuit of wealthy clients caused it to founder since such clients are skittish and their huge withdrawals can cause more damage.
Among the higher profile advisory departures at First Republic: Last week it lost a $13 billion team, Constellation Wealth Advisors, to giant Chicago-based RIA Cresset Capital, according to Barron's. On Friday, Morgan Stanley confirmed that it hired a 12-person advisory team from San Francisco handling some $3 billion in assets from First Republic Bank. A Morgan Stanley spokesperson said that the hires were unsolicited.
There’s a big question mark hanging over the First Republic advisors who have moved to JPMorgan. Two professionals familar with the bank channel who spoke off the record this week, one a recruiter, said that JPMorgan might have a difficult time holding on to the First Republic advisors since it’s likely that First Republic, in its massive acquisition spree for high-net-worth wealth managers over the last few years, already gave them big contracts or bonuses. That gives the advisors remaining a lot of leverage if they are in a position to demand new bonuses from JPMorgan, said one consultant.
“That’s a tough one,” said the recruiter. “It might these advisors are going to need a Plan B or a Plan C.”
Lido started life as a family office structure with real estate-savvy investments but started its talent acquisition phase four years ago and an ambitious plan to grow outside its Los Angeles base to multiple cities. The firm’s executives told Financial Advisor in 2019 that the firm planned to grow to $10 billion in assets in three years. The firm now says it has $14.8 billion in regulatory assets under management and 32 offices across the United States.
In a prepared statement, Morimoto said of his team’s move to Lido: "Lido’s family office style model is an incredible fit for our clients. The firm’s innovative investment platform, enhanced planning capabilities, and deep bench of affiliated tax and legal advisors were key components in our decision to partner with Lido. We are excited to join such a passionate and experienced team in our shared mission of providing best-in-class insight and service to the families we work with."
Ozur said to Financial Advisor: “Our acquisition strategy is not about arbitraging EBITDA like many other firms. It's about talent and geography, and this team checks both those boxes." He also said that the team, whose clients have similar wealth profiles to Lido clients, should help the firm grow exponentially in the region."