Leaving the wirehouse was made easier by a truism of the folksy state: clients would be offended not to be asked to follow

April 28, 2010 — 6:09 AM UTC by Brooke Southall

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Brooke’s note: I had a hell of a good time interviewing Bill Whitney for this article. He asked me in his southern drawl where I was calling him from and I braced myself after letting him know I was in San Francisco. He deadpanned that the difference between where I lived and where he lived was that people in Mississippi wear shoes. The United States is a pretty homogeneous country these days but Mississippi comes as close to anywhere to holding on to its own culture. So it was interesting to hear about how the breakaway movement is unfolding in that state. The answer: very energetically.

Bill Whitney has helped plan retirements back to his days in the early 1960s as a Merrill Lynch broker when he helped people invest their nest eggs. He carefully planned his own retirement five years ago.

Whitney’s basic plan for himself: Wile away the years hunting and fishing on his 250-acre spread outside Jackson, Miss.

Sometimes, you just can’t plan for everything, like the economic crisis of 2008. Whitney, 73, hadn’t realized how much he would miss his clients, or how much they would miss him.

Mistook a two-week vacation

“I was getting calls from some of my old clients,” he says. Not to mention that retirement wasn’t as comfortable as he thought it would be. He “mistook a two-week vacation for a retirement,” he says.

Even as it became clear that he wanted to get back in the game, Whitney decided he wasn’t interested in rejoining UBS after seeing the erosion of the brand at his old wirehouse. Since leaving in 2004, he remained in constant contact with the advisors who had taken over his old book of business at UBS, and he asked them whether they’d break away and form a new RIA with him. There was no resistance.

For a New York City-based Merrill broker’s tale, see: Merrill Lynch breakaway runs gauntlet to set up his business.

“I didn’t have to sell them on it,” he says. “UBS was going through bad publicity over tax shelters and the IRS.”

Whitney’s goal was to establish the atmosphere of collegiality and putting clients first that he recalls from his earliest days at Merrill Lynch.

“In the 1960s, Merrill Lynch was formed on individuals and it didn’t sell mutual funds as a matter of principle – feeling investors could do as well without the fees,” he says. “The individual no longer occupies the place it once did at the wirehouses.

Goldman Sachs envy

“All the wirehouses are afflicted with Goldman Sachs envy – wanting to make money by trading for their own accounts. They all tried to be Goldman Sachs and clearly they weren’t able to be.”

Tom Bertaut and Chris Carrico, the advisors who had taken away his book of business, broke away from the Jackson branch of UBS on Jan. 29 and moved their assets under management to Pershing Advisor Solutions. Whitney chose the Jersey City, N.J., custodian for its business-to-business orientation.

For the story of another UBS breakaway, see: Two senior UBS brokers pass on retirement to pursue aggressive breakaway plan.

“They weren’t competitive in the business the way Schwab Advisor Services might be and BNY Mellon has soundness in an uncertain world,” he says.

Mississippi Investment Management Co., LLC, which manages about $100 million of assets, provides services to the professional investment community, including institutional investors, corporations, endowments, family groups and individuals. The company also includes Forbes Watson, who joined as a portfolio manager.

“The MIMCO team represents exactly the kind of growth-oriented firm Pershing Advisor Solutions’ comprehensive suite of tools and technology was designed to serve,” said Mark Tibergien, CEO of Pershing Advisor Solutions, in a release.

One aspect of the breakaway that didn’t concern Whitney: getting clients to leave UBS.

Mississippi power elite

“This is a state of 3 million people and the power elite is 50,000 people,” he says. “They all know each other or they know each other’s cousins. This is a village. Your reputation is passed by word of mouth. These clients talk to us about what kind of car they want to buy.”

The upshot of the down-home quality of these relationships was that “it wasn’t a question of which clients would come,” he says. “They would have been offended if we hadn’t asked them to come.”

Yet he allows that – despite its small size and reputation for being less than affluent — there is plenty of competition in Jackson, Miss. Not only are the wirehouses ubiquitous in town, but Morgan Keenan and LPL Financial both have a big presence. He adds that Jackson is also a place where breakaways have been quite common so there are a substantial number of RIAs practicing in town.

After only three months, the breakaway is already a clear success, according to Carrico.

“Pleasant doesn’t begin to describe the change,” he says. “I had drinks with some old UBS friends last night, and it just reinforced that we made the right decision.”

Wirehouse brokers on the whole are fed up, Whitney adds.

Gag threshold

“Everybody at a wirehouse has reached a gag threshold and is looking for an exit with few exceptions,” he says.

One symbol of the baggage shed by the team is the radical reduction in the number of junky e-mails.

“Tom hasn’t deleted a single e-mail since the inception [of MIMCO] because he’s received 113 of them,” Carrico says. “He was getting 60 a day at UBS” that were largely related to products.

E-mail flow

Though e-mail flow is down, the pipeline of new customers is climbing rapidly, he adds. “It’s the fact we’re receiving new business and referrals without us seeking them that has us pretty excited,” he says. “We thought it would be next fall [before interest heated up], and we had to scurry to get brochures.”

One reason that there is so much business is that there is actually more wealth in Mississippi than people realize, according to Carrico.

“There’s a lot of millionaires next door,” he says. “There’s the stereotype of Mississippi [as a poor state], but there are actually a lot of successful entrepreneurs that get ignored because of this address.”


Mentioned in this article:

Pershing Advisor Solutions
Asset Custodian
Top Executive: Mark Tibergien



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Yvonne Lee Anderson said:

April 30, 2010 — 1:42 AM UTC

Hooray Hooray Hooray!

We’ll watch out for the volcanos: You guys stay out of the way of those tornados!


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