November 23, 2020

First Republic Launches In Florida

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First-Republic-Bank-LogoEliane Chavagnon Family Wealth Report

New York-listed First Republic Bank has opened a new office in Palm Beach, FL, bringing its total number of US offices to 70.

The branch is located at 241 Royal Palm Way and provides private banking and wealth management services.

Florida proved an attractive place for wealth managers to launch offices and hire staff last year and so far 2013 looks like it’s heading down the same route. Earlier this month, for example, the Private Client Reserve, a unit of US Bank that targets high net worth clients with over $1 million in investable assets, relocated its Naples, FL, office as part of a strategic move to target high net worth clients in Florida. Similarly, in the same week Tampa, FL-based Beacon Asset Management opened an advisory office in Naples, FL.

The following is a feature article published in July 2012 that examines how and why many firms launched operations or added new staff in Florida in early 2012.

Florida is proving an attractive place for wealth managers to launch offices and hire staff so far this year.

Harriet Davies Editor – Family Wealth Report

So far in 2012…

Starting with developments in Miami, Lowenhaupt Global Advisors opened an office in Miami to expand its coverage of South Florida and Latin America. Erik Halvorssen was appointed to lead the operation. Previously, Halvorssen, a native Venezuelan, founded PAX Advisors, an independent wealth manager based in Miami.

Meanwhile, International Planning Group hired Diego Polenghi in May to lead expansion in Latin America, based in the heart of Miami’s financial district. Polenghi joined from Private Bank of Standard Chartered Bank in Miami, where he was head of sales for the Americas.

In April, RBC Wealth Management appointed Rodrigo Buller Souto as director of its international solutions team. Based in Miami, Buller Souto will head the team’s extension into Florida and select Latin American markets.

Just this week, Morgan Stanley Private Wealth Management nabbed a duo from Citi for its private banking operation in Miami.

Mora Wealth Management launched an office in Miami in June, in light of “a growing Latin American affluent investor market,” which the firm noted has grown by 18.1 per cent in millionaire wealth since 2007. The Miami office is led by chief executive Eli Butnaru, who said the new location “positions it geographically” to manage capital flows and clients across Europe, Latin America and North America.

In developments outside of Miami, one of the giants of financial services, BNY Mellon, expanded its Tampa team in Florida this year, hiring Susan Kubar and Scott Givens. Kubar was latterly a family wealth advisor at GenSpring Family Offices; Givens joined BNY Mellon from Raymond James Trust.

“Since we opened our Tampa office in 2008, our business has experienced double-digit growth every year,” regional director Ray Ifert said at the time.

Meanwhile, Wilmington Trust said earlier this year that it is making a push into “dynamic markets” such as Florida and Washington, DC. It took on Robert Bauchman as president of its Florida market in May, to oversee wealth advisory operations in the region. The firm opened its first Florida office in Stuart in 1983 and now has offices in Palm Beach, North Palm Beach, Stuart, and Vero Beach.

Neuberger Berman appointed Patrick Kenefick as a wealth advisor in its Tampa, FL, office, in May. Kenefick rejoined Neuberger Berman from  Merrill Lynch Trust Company in the Tampa Bay area.

Baird launched an office in Sarasota, FL, with an 11-strong team, including six financial advisors with over $825 million in client assets, in April. In total, Baird now has 29 associates operating in the Sarasota market.

Why Florida?

The list of moves, launches and acquisitions in the state is much longer – these are just a few examples – but, more importantly, why has the market been so active for wealth managers this year?

For a start, the tax regime in the state is friendly. “From a tax point of view, the number one state is probably Florida, because there is no state income tax,” David Nave, tax director at the multi-family office Pitcairn, told Family Wealth Report last year. “Many of my clients establish second homes in Florida. Then you have to stay there for 181 days a year, you need to vote there, and have your driver’s license there.”

There are also clear links to Latin America. The state has a population of just over 19 million; around 23 per cent are of Hispanic or Latino origin, according to US Census data for 2011. This community also represents around 22 per cent of businesses in Florida, according to the latest data (2007).

The latest annual wealth report from the Boston Consulting Group highlighted the divergence in growth between “new” and “old world” economies last year. Latin America is also home to an unusually high number of UHNW individuals relative to its wealthy population. It has a HNW population of around 0.5 million, according to the Merrill Lynch/Capgemini World Wealth Report 2011, but around 2.4 per cent of these count as ultra wealthy, compared to a global average of 0.9 per cent.

However, many view Florida as a place from which to serve truly “global” clients, despite the strong Latin links.

“Latin families in Miami are global in perspective and comfortable with the US and US-style thinking,” said Charles Lowenhaupt, chief executive of Lowenhaupt Global Advisors. “Unlike many purely domestic US wealth holders, these Latin families see themselves as global, with children living on either side of the border and businesses around the world.”

Butnaru, of Mora Wealth Management, agrees, saying the firm has “hybrid clients” in Florida, such as the children of wealthy Latin American families who are educated in the US and spend a lot of time in Europe and Latin America, for example. They are “extremely complex, multiple jurisdiction” individuals who tend to be “very well educated,” he says.

“For whatever reason, in Miami, the system has grown with them [hybrid clients],” says Butnaru. “I don’t know if there’s any city in the world that is as diverse as Miami these days.”

It is perhaps this vibrancy, in a world where the “old economies” are stagnating somewhat, that has boosted the private wealth industry in the state.

A recent report from the National Association of Realtors showed that property deals involving international buyers are heavily concentrated in four states: Florida, California, Texas and Arizona, accounting for 51 per cent of international purchases. Florida has been the fastest growing destination of choice, accounting for over a quarter of international sales.

“If you ask why Miami real estate has recuperated so fast, faster than anywhere else – unfortunately, or fortunately, because there are no bargains anymore – one of the reasons is because people have flooded the market, mostly foreigners,” says Butnaru.

And, anecdotally, he says these tend to be international buyers who are “familiar” with Miami – from Europe and Latin America. “We have very few clients that don’t have a situation where someone [a relative] is already living here, either going to school here or college,” for example.

Highly specialist skills

While there may be rich pickings client-wise, it’s not an easy market to serve, wealth executives stress. Particularly, the combination of language skills, broad global experience with clients, and highly technical skills on the wealth planning side are hard to find in one person.

“We realized that the only way we should try to work with these families is by having an experienced director from the region and living in Miami who speaks Spanish. Although there are many such people in Miami, few have the background we needed,” said Lowenhaupt, whose firm went onto select Halvorssen for his experience.

Conor Hourigan, partner and head of wealth management at David Barret Partners in the Americas, an executive search firm, explained that the wealth management market in Florida “is really two very different markets with two defined hubs. Palm Beach is the hub for domestic US UHNW clients and Miami for UHNW International (largely Latin American) clients. They tend not to overlap.”

Demand for wealth management services is high in both areas, he said, but many firms now view Palm Beach as overcrowded. “As such they are looking at new centers where snowbirds are moving to” like Naples and Tampa, as well as the traditional centers of Boca Raton and domestic-focused Miami, according to Hourigan.

Another aspect to this market – where clients tend to arrive rather than be born there – is that firms can struggle with conflict between the local advisor and the advisor who worked with the client in the city/region where the wealth originated, such as the Northeast or Midwest, he explained.

Meanwhile, regarding the international market, “Miami continues to grow with Brazil leading from an offshore perspective,” says Hourigan. However, he said the best firms are also forging onshore presences in Sao Paulo and Rio de Janeiro. For Spanish speaking advisors – who tend to see Miami as the hub – he advised that there’s also a big opportunity in Houston and San Diego, where the Mexican market is “gaining ground.” “Demand for advisors in those cities can be even higher,” he said.

For more on both stories go to:


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