Wealth-management upstart sets up in lucrative South Florida. Top advisor Curtis Lyman Jr. has left Lehman Brothers’ Palm Beach, Fla., office to establish an advisory outlet for US Fiduciary in nearby Palm Beach Gardens. The appointment marks US Fiduciary’s second high-profile hire in four months as the fledgling firm emerges as a destination for “breakaway” brokers with significant high-net-worth practices.

“Curtis is an outstanding advisor, but more importantly, an outstanding individual,” says Steven Graubart CEO of US Fiduciary. “He represents the exact type of professional we strive to attract at US Fiduciary.”

In July Philadelphia-based advisor Mary Ann Lambert left Smith Barney to found US Fiduciary’s first office in the Northeast. In addition to Lyman and Lambert, US Fiduciary supports advisors at New Century Bank in Chicago and Palo Alto, Calif.-based Addison Avenue Financial Partners.

Overtime

Lyman, who left Lehman less than two weeks ago after a tenure of about three years, says he has already brought approximately 90% of a $250-million high-net-worth and small-institutional book of business to US Fiduciary. “The retention exceeds my most optimistic expectations,” he says. “I’m humbled by it.”

A broker typically takes around 65% of his book to a new firm, according to Allan Starkie of Knightsbridge Advisors, a New York-based executive recruiter to wealth-management firms. That’s down from around 85% a few years ago – the result, says Starkie, of changes in the way full-service brokerages are handling their high-net-worth clientele. “Clients have become more sophisticated and demanding, as a result brokerages have become less purely asset-management oriented,” he says. “As you bring more advisors into the relationship, clients become more ‘institutionalized.’” In other words, brokerage-based advisory teams are keeping some clients from bolting when one of their principal advisor jumps ship.

Lyman, a 20-year veteran of the advisory business and founding president of Raymond James Trust Companies, credits US Fiduciary for his unusually high retention rate. “I resigned at about 10 o’clock in the morning on [the] Thursday [before last] and Matt Reynolds and his team had me re-registered in time for a client meeting at five o’clock that afternoon,” he says. “They worked incredibly hard all through the weekend, and last week and weekend too. They’ve been absolutely amazing.”

Reynolds, US Fiduciary’s chief compliance officer and head of the firm’s transition team, says he and his colleagues, responding to inquiries from prospective clients, supported Lyman through the transition process. Reynolds stresses US Fiduciary’s strict adherence to applicable rules and regulations.

More support

And, though Reynolds says the task of moving clients from one firm to another is never effortless, the job was a bit simpler in this case because of the strong bonds between Lyman and his clients. “When clients are loyal to their financial advisor, our mission to support a smooth transition is easier,” says Reynolds.

Lyman says he left Lehman, a New York-based investment bank and brokerage with a proprietary asset-management unit, because he wanted “a higher level of support for delivering advice that’s free of conflict.” He chose US Fiduciary, an advisor-support and investment-platform provider that launched late last summer, over better-known independent advisory platforms because it impressed him as “a firm that really wants to engage and work with advisors who focus on providing clients advice that is fundamentally rooted in asset allocation.”

That commitment shows up in a couple of ways, according to Lyman. “For one thing [US Fiduciary] has National Financial to provide custody and clearing, a proven technology platform,” he says. On the investment side he points to US Fiduciary’s partnership with CRA RogersCasey, a Darien, Conn.-based institutional investment consultant that provides research and manager oversight for US Fiduciary’s managed account platform. “RogersCasey brings the industrial-strength asset allocation you need for high-net-worth individuals and small to mid-size institutions.”

One thing that didn’t faze Lyman was the newness of US Fiduciary. “I’m very supportive of entrepreneurship,” he says. “I started the trust business at Raymond James with an empty desk and a half-finished charter application.”

Background

Another unusual characteristic of US Fiduciary that Lyman mentions is its ability to support private-client consultants who are registered both as 1934-Act brokers and 1940-Act investment advisors (RIAs). In point of fact though, the firm doesn’t much like the term broker. “Our reps are not brokers per se,” says Reynolds. “We’re for letting advisors build their own businesses; having a brokerage supports that.”

Though only 14 months out of the gate, US Fiduciary is the product of several years of planning. The idea for it came to now-CEO Graubart soon after his father Donald Graubart invited him to join Post Oak Capital Advisors, the senior Graubart’s Houston-based investment advisory. The younger Graubart – who used to be the biggest franchisee of Sylvan Learning Systems – quickly saw an opportunity to provide advisory-support and investment services to fee-based advisors keen to offer conflict-free advice to their high-net-worth clients.

To get the investment platform going Graubart raised capital and bought two third-party investment platforms, Chicago-based mutual-fund-wrap platform West Hills Institutional and Houston-based managed-account platform Vista Analytics. Those formed the basis of USF Services, an investment platform headed by Scott MacKillop, a former industry consultant and a founder of Portfolio Management Consultants, a managed-account platform that subsequently merged with EnvestNet.

Elliot Weissbluth runs the advisor side of US Fiduciary through USF Advisors, an RIA, and USF Securities, a broker-dealer. He’s a former director of marketing at CRA RogersCasey. –FWR

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