Another Merrill team decamps to UBS

The exodus of Merrill teams to UBS continued late last week, with four advisors overseeing $1.3 billion in client assets on the East Coast making what's becoming a common transition.

UBS Wealth Management USA announced on Friday that The Hart Team, based in Albany, New York, had decamped from Merrill. The four-person advisory group specializes in helping athletes and entertainers manage their wealth, fitting in with one of UBS's priority markets.

"Athletes and entertainers frequently face unique challenges such as sudden wealth and complicated family financial dynamics that require specialized advice and guidance," Wale Ogunleye, the head of UBS's athletes and entertainers client segment, said in a statement.

The ex-Merrill team's move comes as the latest in a series of recruiting coups for UBS. The Swiss banking giant, with nearly $3 trillion in invested assets in its Global Wealth Management unit, announced on Jan. 12 that it had brought on a 10-person team, GKB & Associates, that had formerly managed $2 billion for Merrill in New York City. A little over a week later, UBS said it had welcomed an eight-person former Merrill team, managing $1.6 billion, to its offices in Northbrook, Illinois.

A Merrill spokesperson declined to comment for this article.

Phil Waxelbaum, a longtime industry recruiter and the founder of Masada Consulting, said the latest move reflects less on UBS's recruiting abilities and more on Merrill's struggles to hold on to its advisory teams. Waxelbaum said a firm looking to leave Merrill in Albany had few choices beyond UBS and Morgan Stanley.

"That is the limitation of being associated with a smaller city," Waxelbaum said.

The Hart Team will be joining UBS's Greater New England Market, led by managing director and market executive William Cholawa. UBS's Albany office is overseen by market director Gabriel D'Amica. A source familiar with the practice said it generates about $4 million a year in revenue.

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Waxelbaum said the best way for Merrill to stem the outflow of advisory teams would be to start showing results from its own plans to revive its recruiting efforts. In a fourth-quarter earnings call on Jan. 12, executives at the firm said they were looking again to offer generous sign-on deals to bring in select wealth management groups.

"You're not going to get anybody's attention anymore in any other way," Waxelbaum said. "If I'm sitting at Merrill Lynch, and everybody's going out and nobody's coming in, then there's nothing that's giving me pause. Nothing's changed."

Eric Schimpf, the co-head of Merrill Wealth Management, did say on the recent earnings call that the firm's attrition rate — the percentage of wealth managers who leave annually — had hovered around the average of 4% in 2023 and even showed signs of improving toward the end of the year. But such assurances have not quelled concerns that the replacement advisors being brought in are not nearly as productive as those who are leaving.

Rick Rummage, another industry recruiter and the CEO of The Rummage Group, estimated that Merrill has probably brought in a few thousand new advisors who have to start from scratch building a book of business. And if the industry's history with newcomers is any indication, a majority of those inexperienced wealth managers will eventually decide financial planning isn't for them and seek out another career.

Rummage agreed that Merrill made the right decision to revive its recruiting efforts. It will just take a while, he said, for results to appear.

Rummage compared the firm's change in direction to trying to "turn around an aircraft carrier."

"They'll get back into it," he said. "They have one of the most powerful names on the Street."

The leader of The Hart Team, James Patrick Hart, has 38 years in the industry and a work history with 10 firms — including various businesses eventually incorporated into Wells Fargo advisors — before joining UBS. His BrokerCheck record shows two disclosures.

One, in 2003, resulted in a roughly $61,000 arbitration award, plus interest, after clients alleged he had directed them to unsuitable investments. The other, from 1994, resulted in a $1,000 fine after Hart admitted to breaching registration requirements in Idaho. Attempts to reach Hart through UBS were not successful.

The three other advisors on the team are: Emily Hoag, Natalie Squillace and Nolan Hart, James Hart's son. Hoag started her career at Merrill in 2017; Squillace joined Merrill in 2022 after three years at Fidelity Investments, and Hart joined Merrill in 2023 after six years at Alliance Bernstein. None of them has any disclosures on their BrokerCheck records.