Despite JPMorgan's recount, dozens of advisors have fled First Republic

JPMorgan Chase & Co.'s revised advisor head count for its First Republic Bank acquisition — 229 financial advisors on May 1, up from the previously reported 150 — is out of step with industry information about the wealth management unit of the defunct bank, which was acquired Monday by JPMorgan Chase after a two-month spiral downward triggered by the March run on regional banks.

Dozens of financial advisors have left First Republic's wealth management group in the past two months. InvestmentNews reported in March that First Republic had a net gain of 233 financial advisor hires since 2010, then earlier this week, after the news of JPMorgan Chase's acquisition, that the financial advisor head count had dropped by as much as one-third. Other industry publications have recently reported that close to 25% of First Republic's financial advisors have left the firm.

One industry recruiter, Casey Knight, executive vice president of ESP Financial Search, said that wealth management executives at First Republic had told him last September that there were 240 financial advisors at the firm. "Between 20 and 40 financial advisors leaving First Republic since March is a very realistic estimate, and that’s even being conservative," Knight said.

JPMorgan Chase & Co. announced Monday that it had won the bidding to acquire First Republic Bank in a government-led intervention after private rescue efforts failed to fill a hole on the troubled lender’s balance sheet and customers yanked their deposits.

The confusion over financial advisor head count at First Republic stems from a statement by JPMorgan Chase's chief financial officer, Jeremy Barnum, who said during a conference call with analysts Monday that there were "still nearly 150 financial advisors with" First Republic.

After InvestmentNews and others reported that information, a JPMorgan spokesperson said that number was incorrect. On Wednesday, JPMorgan revised that number up significantly to 229.

A spokesperson blamed the disparity on financial advisor head count to the swiftness of JPMorgan's acquisition of First Republic. "We had less than 48 hours to dig into First Republic’s books over the weekend," the spokesperson wrote in an email. "We’re looking forward to welcoming our new colleagues."

Regardless of how they're tallied, financial advisors continue to leave First Republic. RBC Wealth Management said Thursday that it had hired another pair of financial advisors, Mark R. Nickel and Michael B. Cox, from First Republic, with the duo managing $452 million in client assets. They had worked at First Republic in San Francisco since 2016, according to their BrokerCheck profiles.

InvestmentNews and other industry websites have reported on dozens of advisors leaving First Republic since early March.

Last month, a First Republic team of New York City-based financial advisors led by Adam Zipper and Joseph Duarte jumped to Morgan Stanley; the team works with $10.8 billion in total client assets. Also in April, Rockefeller Global Family Office said it had hired Liberty Wealth Partners, previously a First Republic Bank, which manages $2.3 billion of client assets.

Knight, the recruiter, said First Republic's acquisition by JPMorgan Chase could bring a needed dose of stability to its financial advisors, who often work in teams of four and produce on average $2 million in annual revenue, or almost twice what a desired producer at a wirehouse generates each year in fees and commissions.

[More on First Republic News: Crack appears in First Republic wealth management business]

"The advisors seem somewhat comfortable with JPMorgan," Knight said. "Many want stability and are trying to keep their clients calm."

"The majority of advisors will explore their work options, and that's rare," he added. "But that’s what you get with this class of advisor. They’re not going to let anyone make the decision for them."

First Republic’s private wealth management platform will become part of J.P. Morgan Advisors, and certain First Republic branches will be converted into new J.P. Morgan wealth centers, according to the bank.