Pershing, Dynasty and Envestnet gang-tackle Credit Suisse and jolt loose $1 billion duo

Breaking away from Credit Suisse has been on the minds of Hal Lambert and Jeff Wildin for several years but they had never been able to identify the landing spot that seemed suitable.

But after a year of careful study and preparation the two advisors — after having departed JPMorgan several years before — the two left the prestigious investment company on Oct. 18 to form PointBridge Capital in Dallas and Fort Worth, which advises $1 billion of assets for entrepreneurs, family offices, foundations and pensions.

The big breakaway criterion for the advisors was to be sure they were getting the same or better research and technology priced in a way that seemed to make sense. There also needed to be tremendous support, because the firm is still just two individuals handling $1 billion of assets under administration. See: How the breakaway movement is driving the outsourcing trend.

The combination of Pershing Advisor Solutions LLC, Envestnet’s Vantage analytics and Callan Associates Inc. manager research, tied neatly into a bundle by Dynasty Financial Partners turned out to be the combination that made flying the Credit Suisse coop worthwhile..

“This is a 'poster child’ deal for Pershing in my opinion,” says John Furey, principal of Phoenix-based Advisor Growth Strategies LLC. “This deal along with Waldron WM from last year provides similar advisors with confidence to move to their platform.”

Still, Pershing was just one piece of the puzzle.

Full ownership

“I’ve thought about this for a number of years,” Lambert says. “Really the technology [for independent RIAs] is a lot better and it’s a lot more cost-effective. The costs have come way down. You can partner with Envestnet for reporting and get access to great analytics for clients. You also have scale through Dynasty. You’re viewed as a $15-billion firm.”

The payout level after meeting these costs was not disclosed.

There are other firms that have offerings that mimic or can be cobbled together to approximate the Dynasty offering but many of them are roll-ups — and this was not what Lambert wanted.

“I looked at the others and there are different models; I wanted the full ownership of the firm.”

Best in class

Mindy Diamond, principal of Diamond Consultants LLC, says this breakaway is exhibit A for just how far independence has come as an option.

“The truth is that boutique firms like Credit Suisse have good enough offerings but the platforms are not as robust as what is available on a truly open architecture best in class platform like Dynasty’s,” she says. “I think we will see more of these moves. The fact that they can make this move while rebuilding their administrative team speaks volumes to the turnkey support that Dynasty provides in the transition and ongoing support to help advisors grow.”

Furey agrees that there is a different dynamic at play here than with the classic get-me-out-of-here breakaway.

“This transition provides validation that larger advisors are making transition for more strategic reasons,” he says in an email. “Hal’s transition is noteworthy given he came out of Credit Suisse, which as deep international bank orientation. These advisors have been less apt to consider RIA channel given the difficulty of transitions and inability to transition clients — sometimes the transition rate can be as low as 10%!)”

Mindy Diamond: Boutique firms like Credit
Suisse have good enough offerings but
the platforms are not as robust.

Credit Suisse declined to respond to requests for comment.

Multi-strength

One big winner in this somewhat rarefied breakaway is Pershing and its leader, Mark Tibergien. Pershing has long been the No. 4 custodian in sheer assets. But Tibergien has allowed the unit to grow by relying on big, sophisticated clients, of which there are few. See: Mark Tibergien is making Pershing an industrial strength custodian with an RIA service touch.

A win like this one helps demonstrate what his company is working to accomplish for advisors, he says.

“Competition is tough, but being singularly focused on our optimal client means we are creating a community of like-minded advisors, which they all seem to appreciate,” Tibergien says.

“Everything we’ve been investing in, from an integrated bank and brokerage custody platform, alternatives network, access to global markets, business management support and private banking is geared to professionally managed firms who serve high-net-worth and ultrahigh-net-worth clients. For example, with our private banking offering provided from BNY Mellon, our average loan to date is $20 million. Its hard for other firms to offer the combo.” See: Pershing and BNY Mellon unveil a unified, 'dream’ RIA and bank custody unit.

Indeed, Lambert says he was looking for that kind of strength in a custodian. “Pershing: They’re Bank of New York and one of the largest custodians in the world.”

White shoe pasts

Mark Tibergien: Our average loan to
date is $20 million. Its hard
for other firms to offer the
combo.

Both Lambert, 43, and Wildin, 50, have white-shoe Wall Street backgrounds. Prior to Credit Suisse, Lambert headed discretionary investment management for the Southwest region of JPMorgan Chase & Co. and served several years on the U.S. private bank investment team, setting the asset allocation policy for all of the company’s private-banking clients in the United States. See: The 10 things Morgan, Merrill, UBS and Wells Fargo could do if they really, really wanted to stem the RIA tide.

Prior to JPMorgan, he was a credit analyst for the Bass family in convertible arbitrage. Lambert also has an extensive background in trust and estate planning, having graduated from Northwestern Graduate Trust School. He has a BBA in finance from the University of Texas at Austin and an MBA from Georgetown University, and is a chartered financial analyst.

Wildin joined JP Morgan in 1999, helping establish the first office for the JP Morgan Private Bank in Texas. From there, he was asked to help establish a JP Morgan Private Bank office in Denver, and subsequently Scottsdale, Ariz. In 2005, Wildin returned to Dallas and joined Credit Suisse. where he has been advising high-net-worth and institutional clients for the past eight years.

Wildin has been active on several boards, including that of the Van Cliburn Foundation, which sponsors the Van Cliburn International Piano Competition, as well as the board of trustees for the Dallas Opera. He graduated from Principia College and earned his JD from the University of Kansas.

Real deal

Diamond says to expect to see more advisors who second as patrons of the arts as the breakaway movement puts the old days in the past.

“The 'versus five years ago’ question is simple — independence land has been legitimized by high-profile advisors and teams making the move, by thought leaders like Shirl Penney and Todd Thomson from the wirehouse world building a firm like Dynasty, and by the press itself. Its the real deal. So, five years ago even if Hal Lambert were looking for all of these things, he likely wouldn’t have made the leap because he likely wouldn’t have wanted to go it alone without a firm like Dynasty to help him every step of the way.” See: Backs to the wall, wirehouses renew legal efforts to stem team breakaways — with junior partners sparking the tension.