News, Vision & Voice for the Advisory Community


Citigroup share plunge triggers elite Smith Barney team to consider breakaway

Three Bridge Wealth Advisors go RIA route after competitor provides help

Thursday, August 27, 2009 – 7:54 PM by Brooke Southall
no description available
Eric Thurber, Fred Molfino and Brett Sharkey: Have a niche with VCs on Sand Hill Road

Eric Thurber, 39, Fred Molfino, 40, and Brett Sharkey, 37, left Smith Barney 11 days ago to form Three Bridge Wealth Advisors in Menlo Park, Calif.

The three partners have spent years serving the elite of Silicon Valley’s venture capital community from Sand Hill Road and their revenues are split between wealthy families and the institutional business from VC firms themselves. Though they have been ensconced in the richest of deal-making cultures, it took a momentous event to decide to put themselves in play.

“Last October Citigroup [shares] went to under a dollar a share and we realized our custodian was at risk,” says Thurber, a managing director of the firm. The partners were fielding calls from clients asking if their assets were safe, he adds. Now they have decided to move their book of business of more than $740 million to Charles Schwab Advisors Services.

This concern about financial stability of custodians has been a major boon to Schwab’s efforts to bring aboard teams from wirehouses, according to Barnaby Grist, managing director of strategic business development for Schwab.

“We get a lot of calls around here asking about the strength of The Charles Schwab Corp.,” he says. “We love getting those calls.”

Yet before committing to go the RIA route, the advisors decided to vet all the opportunities of joining another Wall Street firm. They were aware of the big signing bonuses they could command from a competitor.

After considering those offers, however, they came to a realization that the offers wouldn’t solve their clients’ concerns.

“No one was clean,” Thurber says.

They looked a little further afield at JP Morgan and other Wall Street firms but found they didn’t have what that they were accustomed to.

They gave cursory consideration to joining an independent broker dealer but they decided they wanted a clean break from “legacy” models and the notion was quickly dismissed.

Right moral compass

“If we were going to do this, we wanted complete control,” Molfino says in response to a question about joining an IBD. “[By becoming an RIA] we can build the right moral compass. We can put our brand on it.”

They spent months doing due diligence on the custody platforms of Fidelity Investments and Pershing LLC before deciding to go with Charles Schwab Advisor Services. A visit to a Schwab service center in Scottsdale, Ariz. made a big impression on them, they say.

Service and support were the keys. They had seen steady erosion in back office support at Smith Barney because the staff at their branch was slashed to a skeleton crew. These were employees they relied upon to assist them with a multitude of tasks like wire transfers and various paperwork.

The principals are ebullient in their new offices on Sand Hill Road.

“People want to share with us and it’s different from where we just came,” says Molfino, managing director of Three Bridge. “I’m happy; this is fun.”

They were surprised to find such a level of support from other breakaway advisors. The Three Bridge partners received important mentoring from advisors at Luminous Capital of Los Angeles and Menlo Park. The two firms share some clients in common.

There was only one note of regret mentioned by Thurber about his firm’s breakaway.

“If I had known we would be this successful [in bringing over clients], I would have done this sooner,” he says.

Editor’s Note: If you want to try an alternative to caffeine in your mid-afternoon lull, try calling an advisor who recently broke away to independence. Call it what you like: entrepreneurial fervor, evangelical passion or the zeal of the converted. It’s high voltage positive energy. Breakaways suddenly realize that they are part of a great club of support from fellow independents and people in general who appreciate a good leap of faith. Thurber and Molfino expressed this contagious excitement as strongly as anyone I’ve spoken to in a while.

Related Moves

Fidelity Investments loses Kathleen Murphy who largely caught up Fido to Schwab (near $4T) on the retail side by reversing net promoter scores

The 'no whining allowed' leader of the Boston giant's retail business, who oversaw $2 trillion in net new assets, was ready to exit but hung in through a year dominated by COVID-19 challenges

January 23, 2021 – 2:02 AM

Fidelity Institutional looks like a big TAMP after Mike Durbin removes last internal walls between products and advisors after 'meteoric' 2019 leap; two Fido RIA sales legends depart amid the shift

Rich Policastro and Tom Valverde are out after Fidelity Custody & Clearing assets leap to $2.6 trillion AUA, restructuring gets the credit -- and so restructuring gets extended.

March 13, 2020 – 10:36 PM

Behind the scenes, Ben Harrison's rise to replace Mark Tibergien at Pershing was more shock and awe than a symphonic succession

Harrison's appointment was baked in the cake -- or not -- and Tibergien departed with Swiss-watch precision in Moss Adams-style--or not.

March 13, 2020 – 7:22 AM

Mark Tibergien sets up Ben Harrison to challenge Schwabitrade with a $150 million cut to Pershing's minimum and millions more to develop Veo-busting technology

The CEO suite hand-off in Jersey City pulls a trigger on a plan to bypass Fidelity's and eventually Schwab's custody units by luring disaffected RIAs.

March 11, 2020 – 7:58 AM

See more related moves

RIABiz Directory

The Industry Sourcebook for RIAs

   |    LISTING

RIABiz Directory sponsored by:

Directory Sponsor Logo