Exclusive Content:

Easy Homemade Apple Pie Granola Recipe

This yummy homemade apple pie granola recipe is perfect...

Surprised by Blackstone’s limit on REIT withdrawals? Advisors shouldn’t be

If advisors who directed clients to put money into...

It’s time to counsel clients on critical year-end tax considerations

It's time to schedule year-end tax conversations with clients...

Fieldpoint to sell brokerage for $2M, shift to private banking for RIAs

A bank that had two agreements to sell its brokerage fall apart is selling the unit to a third suitor for $2 million and focusing on private banking services for registered investment advisors.

Fieldpoint Private, a Greenwich, Connecticut-based bank with $1.4 billion in customer assets, launched Fieldpoint Private Advisor Banking Services on Dec. 7, which is about three months after the firm agreed to sell its brokerage to a new financial services holding company called Dominari Financial. At one time, Fieldpoint’s brokerage, Fieldpoint Private Securities, spanned 28 financial advisors managing $3.4 billion in wealth client assets among teams it recruited from private banks and wirehouses. The company made a “strategic decision” to shift its business toward providing the private banking services to advisory practices, CEO Russ Holland said.

“The secret sauce is in that relationship between the wealth advisor and the banker,” he said in an interview. “Most banks don’t think like that. Most banks were not built by advisors for advisors.”

More than 30 former executives from Merrill Lynch, The Home Depot, TD Ameritrade, Gillette and Time launched Fieldpoint Private as a bank and boutique wealth management firm in 2008. The bank and previous potential buyers Summit Financial and tru Independence “amicably agreed” to part ways from respective purchase agreements the parties struck in January and April, according to Fieldpoint’s most recent Form ADV filings with the Securities and Exchange Commission. A CEO and an interim CEO left Fieldpoint in May and August, too. Fieldpoint and Dominari, which biotechnology company AIkido Pharma formed in June, reached an agreement for the new firm to purchase the bank’s brokerage on Sept. 9 for a price of $2 million, the buyer’s SEC filings show. The deal awaits FINRA’s final approval.

“Our goal has always been to move swiftly to execute a roll-up strategy of wealth management firms that cater to ultrahigh net worth investors,” Dominari President Carlos Aldavero, who left a position as a Morgan Stanley associate complex manager in July to join the new firm, said in a statement. “This transformative purchase not only accelerates our timetable, but also gives us the organizational infrastructure and technology needed to scale Dominari into a financial services powerhouse.”

Industry news outlet AdvisorHub first reported the new agreement with Dominari.

The deal reflects how new incoming investors are helping to fuel continuing records in the volume of M&A transactions, as well as the complexity of selling brokerage firms. Summit CEO Stan Gregor said earlier this year that it and Fieldpoint mutually pulled out of their agreement “after an extensive due diligence process” but retained a private banking relationship. As for tru Independence, President Amit Dogra said the RIA platform didn’t need to buy a brokerage because it’s already “rather well-established” at about 75 advisors with $9 billion in client assets.

“You want to do your due diligence and make sure it makes economic sense and it’s a viable business for you,” Dogra said. “We have nothing but respect for the Fieldpoint team. It just wasn’t the right fit for us.”

Brokerage firms often prove more difficult to sell than RIAs because they usually have fewer contract provisions and other ties guaranteeing advisors will stay with the firm under new ownership, according to John Eubanks, a managing director with investment bank and consulting firm Park Sutton Advisors.

“Broker-dealers have become less profitable,” Eubanks said. “It’s almost not worth having one in many cases. You have to have a lot of assets and a lot of advisors to make it economically possible anymore.”

Bill Hamm’s team at Tampa, Florida-based Independent Financial Partners considered buying an existing brokerage before it broke away from LPL Financial in 2019, Hamm said in an interview. The firm picked a “clean slate” by starting its own brokerage rather than going through a “re-registration process” for any existing ones with FINRA, he said. Independent Financial has also since turned down a potential buyer who was offering a “decent” purchase price for the firm, due to concerns about retaining the advisors after the deal, according to Hamm.

“You have to convince them that this is in their best interests to do,” he said. “A lot of times, the broker-dealer that’s buying, they’ll only give their advisors 30 to 45 days to make a decision. If it’s something that you don’t want to do or you’re leery about, your timeline has been condensed.”

Fieldpoint’s advisors have been moving over the past year to firms that eagerly recruited them, such as Snowden Lane Partners, RBC, UBS, Wells Fargo Advisors and Rockefeller Capital Management. The firm has been actively “working with our advisors to try to find homes for them” where they can still use Fieldpoint’s banking and its technology, which the planners helped the company develop in 2020 before their departures, Holland said.

“The advisor has the banking on their desktop, just like they did when they were here,” he said. “It’s our own technology.”

He declined to state many details about the negotiations with the previous suitors for the brokerage, citing limitations about what he can discuss publicly. The former CEOs found new opportunities, and the mutual decision with Summit turned into a “win-win” because the advisors chose their own paths while Fieldpoint expanded its banking relationships, Holland said.

“At that point, then we realized we were just going to let our advisors find where they wanted to go and let them transition there,” he said. “They are mostly all banking with us.”

Fieldpoint is currently onboarding about a dozen firms in varying stages of moving their clients to its bank, with the expectation of reaching about $3 billion in assets over the next four years. The services include Fieldpoint Private Trust for estate planning and other trust needs, as well as personal and commercial banking and lending. Former Merrill Lynch Chairman Emeritus Daniel Tully and other onetime executives with the wirehouse are among Fieldpoint’s founders and stakeholders, according to Holland.

The firm seeks to help high net worth and ultrahigh net worth advisors at RIAs find one single source for services like secured lending and mortgages like a wirehouse or private bank team rather than needing to go to several different banks for them, he said.

“We realized that, to continue to grow the bank, we needed to have a bigger market, a bigger base,” Holland said. “We also realized that what we had is very unique. We were a bank that was advisor-centric, and that really doesn’t exist in many places.”


Easy Homemade Apple Pie Granola Recipe

This yummy homemade apple pie granola recipe is perfect...

Surprised by Blackstone’s limit on REIT withdrawals? Advisors shouldn’t be

If advisors who directed clients to put money into...

It’s time to counsel clients on critical year-end tax considerations

It's time to schedule year-end tax conversations with clients...

Don't Miss

One of the world’s richest families is building an investment firm

The Mills family, which ascended to the ranks of...

Espresso Tonic

Espresso tonic is the hot drink this year. I...

Loans and hardship withdrawals from 401(k)s are rising

More Americans are tapping their 401(k)s for financial emergencies,...

How to run a family office like an Agnelli

John Elkann, head of the Agnelli dynasty that owns shares in Stellantis, Ferrari and The Economist, has built a reputation as a paragon for...

Ex-LPL financial advisor charged with 23 felonies in elder fraud case

A barred former LPL Financial advisor accused of defrauding a widow in her 90s is facing nearly two dozen felony counts in a criminal...

Should I Buy a Peloton? 5 Reasons to Give It a Spin

If you’re familiar with Midwest winters, you know how hard it can be to motivate yourself to get exercise outdoors. When there’s ice everywhere,...