First Republic bulks up in wealth management with November hiring spree

First Republic Bank continues to bolster its wealth management business by adding more advisors.

So far this month, the San Francisco-based company has announced the hiring of three wealth management teams — one from Merrill Lynch, one from JPMorgan Chase and one from Wells Fargo.

The addition of new talent comes even as First Republic tries to reduce expenses amid margin compression. During a Nov. 9 investor day, executives said the $205.1 billion-asset company is looking for ways to trim costs in the near term, but it doesn't plan to give up longer-term investments in people.

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"There is a time to acquire great talent," President and CEO Mike Roffler said during the day-long event in New York City. "There's a time to invest in future capabilities that will drive client service. We make sure we do not sacrifice those, even in the midst of challenging time periods."

Since the start of the year, First Republic has made at least 13 announcements about the hiring of wealth management teams and individual wealth managers. The bulk of those additions have been in the San Francisco and New York metropolitan areas, and the majority of the newly hired advisors worked most recently at Merrill Lynch, Bank of America's wealth management arm.

The latest additions include a nine-person team in San Francisco that came from Merrill Lynch, a five-member team from JPMorgan that's based in New York and Connecticut and an eight-person team located in Palo Alto, California, that most recently worked at Wells Fargo.

The new San Francisco team will be led by Tim Argyres, Ted Rice, Nasser Abdulkariem and Greg Argyres, First Republic said in a press release. The team from JPMorgan will be led by Marc Koch and Christopher Walters, while the group from Wells Fargo will be overseen by Jeremy McChesney, Marci Rosenfeld, Jim Morehouse, Todd Duncan, and Jessica Huang, the company said.

Except for Huang, who was hired as a vice president and wealth manager, each of the team leaders announced this month have been hired as managing directors and wealth managers for First Republic Investment Management. All three teams will offer portfolio management, retirement planning, investment consulting and other wealth management services to individuals, families, nonprofits and private family foundations, the company said. 

First Republic has not said how many assets under management the new teams will bring.

The company's assets under management totaled $249.5 billion at the end of the third quarter, down less than 1% year over year and down 10.7% from the end of the fourth quarter of 2021.

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Fees from private wealth management made up about 15.1% of year-to-date total revenues at First Republic, the company said in its investor day presentation. In 2010, such fees made up 5.5% of total revenues.

Some banks are spending more money these days to attract and retain wealth advisors. Wells Fargo, for instance, rolled out a new compensation plan this month that simplifies the number of thresholds needed to get higher levels of pay and removes certain caps on pay, according to Financial Planning, a sister publication of American Banker.

Wells Fargo's advisor headcount decreased during the first and second quarters of this year. Attrition rates at San Francisco-based Wells slowed in the third quarter when headcount fell by 4% year over year to 12,011, an improvement from the year-ago quarter when headcount fell by 9%, Financial Planning reported.