Recruiter: an increasing number of older advisors are leaving wirehouses to be sure their books of business go to someone they trust

July 27, 2010 — 1:52 AM UTC by Brooke Southall

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Add one more reason that a career wirehouse advisor would take his book of business to a local independent firm – so he could bring on one highly trusted assistant again: his wife.

William O. Webster, Jr., joined Westport Resources Management, based on Westport, Conn., from Morgan Stanley Smith Barney in June. He left the wirehouse for many of the same reasons that other brokers cite in their breakaways. At the top of Webster’s list of reasons is how wirehouses – including his Smith Barney – have been swallowed up. He also mentioned Merrill Lynch’s acquisition by Bank of America.

“I’ve seen a lot of firms lose their significance,” he says. This contrasts with life at Westport. “You can walk down the hall; you don’t have to go through layers and hoops.”

Westport Resources is a 25-person firm that brings advisors aboard as tuck-in RIAs, employee-brokers and IBD reps. It uses Pershing LLC as the backbone of its transactional business. Webster joined as an employee.

Webster, whose career included a stint – from 1985 to 1991 — as branch manager of Paine Webber’s Bridgeport, Conn., office, which was New England’s largest producing branch at the time, says that the some of the advisors in his Morgan Stanley office were “going in a different direction” from what he wanted. He didn’t specify the circumstances. But he likes what he sees from his late-career change. See:Why Smith Barney is now the most target-rich environment for recruiters of breakaways

“I’ve never had the opportunity to have concurrent access to a trading platform, portfolio management teams, and top management all under one roof,” he says. “This is a unique and invaluable capability that not too many firms possess.”

Webster is 67.

It’s not unusual to see advisors in their 60s leave wirehouses nowadays, according to Fred St. Laurent, managing director of SCI Partners of Atlanta, Ga., a firm that recruits brokers to independence. See UBS brokers break away Mississippi style and a bass-fishing ex-Merrill broker comes out of retirement and Two senior UBS brokers pass on retirement to pursue aggressive breakaway plan.

Exit strategy

“The trend is toward an exit strategy of older brokers who don’t want to ride it out at the wirehouse and hand off clients to someone they [don’t know and trust],” he says. “You don’t want to hand off the money to someone you don’t know” and get little payment for it relative to monetizing a book through independence.

Webster says he’s still working to get clients to follow him. Some of them need convincing because they are accustomed to dealing with an advisory company with a national brand, he adds.

Capabilities aside, a different twist to his story is that his move to an independent RIA and broker-dealer has given him the flexibility to bring on a partner that he really trusts – his wife, Susanne.

A window to re-form the team

About that aspect of his new venture he deadpans: “So far, so good.”

Susanne Webster also speaks with some reserve about the new arrangement but she believes that she can be helpful to her husband. She has been instrumental during the past six weeks in helping to be sure his transition from Smith Barney goes smoothly.

“I’m more detail-oriented than he is,” she says.

But she allows that her husband’s strengths complement hers. “I’m not a salesperson,” she says. “I’m more of a support person.”

She previously held her Series 7 license before concentrating more on motherhood; her youngest child is entering college this year.

What gives her confidence in working with her husband is that she worked for him 35 years ago at Blyth Eastman Dillon Union Securities, which was acquired in 1979 by Paine Webber. She was his sales assistant there for three years and the couple was married about eight years after that, Mr. Webster says.

His decision to join Westport opened the window for her to jump back into the business. “I probably wouldn’t have joined him” at Smith Barney, she says. “This provided the opportunity.”

Webster began his career in 1972 at Blyth Eastman Dillon Union Securities. He earned a bachelor of arts from Dartmouth College and an MBA from New York University Stern School of Business.

The Websters and two children reside both in Wilton and Old Saybrook, Conn.

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Frederick Van Den Abbeel said:

July 27, 2010 — 3:30 PM UTC

Good article Brooke. I wish Mr. Webster the best of success in his new venture. His feelings on “why” he left are echoed by other advisors I also speak with going RIA Independent.


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