REPRINTED FROM
Q&A
Leaving Merrill
Lynch to start ‘truly
independent’ wealth
management firm
really gained a lot of respect for
one another. So when the opportunity presented itself and
we decided that being independent was the best move for us
and our clients, we decided to
leave together and create Corient.
To answer your question ‘why
BY RABIA ARIF
OCTOBER 5, 2015
now,’ there are probably two
main reasons. One is, there is a
Several private bankers recently left Bank of America
movement around the country
Corp.’s Merrill Lynch to start Corient Capital Partners, a
to go to independence. It just
privately owned, independent wealth management firm
provides a much better, more Darren Henderson,
with more than $3.3 billion in assets under management.
flexible platform, to address the founding partner of Corient
Capital Partners
Darren Henderson, Christopher Copps, Gordon Hasneeds of our clients. Any benefit
Source: Corient Capital Partners
senplug, Michael Phelps, Alexander Stimpson, Jonathan
that we receive at a big broker
Tenney and Gregory Walters announced the launch of their
firm, we can now get in the independent world.
new firm on Sept. 29. All seven advisers currently serve as
And I would say that in decades past that may not have
founding partners and created the firm after leaving Merbeen true, but with the advent of technology and the comrill Lynch’s private banking and
plete opening up of the archiinvestment group.
tecture of investment firms,
For clients that really resonates
Headquartered in Newport
we can now do everything
... When we told them we have gone
Beach, Calif., Corient offers
here at Corient that we have
independent,
we
own
our
company,
portfolio management, estate
ever done before plus some
they said that we totally get it, it’s wonplanning, tax strategies and inmore. And so, we felt like the
derful and we understand the benefits
vestment banking services to
time was right that we could
of owning your own business and not
ultra-high-net-worth individunow make this move. We
being beholden to a large bureaucratic
als and families, nonprofit orhave a great client base with
ganizations and corporations
wonderful clients, we are also
institution”
across the U.S.
young enough that we can
- Darren Henderson, founding partner
Corient partnered with Dydo this and have a very long
at Corient Capital Partners
nasty Financial Partners to lecareer and build something
verage its wealth management services and technology
that we can really be proud of.
platform. Dynasty offers institutional research from Callan
Corient founding partner Gordon Hassenplug said
Associates and Wilshire Associates. Corient will also have
in a statement that the team will be able to access a
access to Dynasty’s adviser desktop, in-house specialists
dramatically wider selection of investment capabilities
and home office support.
and products for clients now that it is “truly indepenSNL spoke to Corient founding partner Darren Henderdent.” What does “truly independent” mean?
son about leaving a big brokerage to start an independent
Truly independent is that we, the seven partners, own
firm. What follows is an edited transcript of that conversa100% of the firm. We can do whatever we need to do to
tion.
address the needs of clients, obviously within the confines
SNL Financial: Why leave BofA now to start this comof the rules and regulations of the industry. We don’t have
pany?
anyone telling us what products that we have to sell and
Darren Henderson: All seven of us worked together at
we don’t have anybody dictating to us what client portfolios
Merrill Lynch. Five on one team and two on a different; but
need to look like.
we collaborated together on a lot of clients, a lot of things,
For clients that really resonates ... When we told them
we sat near each other and we talked a lot of investments,
we have gone independent, we own our company, they
h t t p : / / w w w. s n l . c o m
One SNL Plaza, P.O. Box 2124, Charlottesville, VA 22902 Phone: 434.977.1600 News fax: 434.293.0407 www.snl.com
© 2015, SNL Financial LC. All Rights Reserved. Proprietary and Confidential. Use limited and subject to SNL license.
said that we totally get it, it’s wonderful and we understand
the benefits of owning your own business and not being
beholden to a large bureaucratic institution.
Were there any repercussions from so many advisers
leaving BofA to create this firm? For example, are there
any noncompete agreements in place?
As you know, it’s called the ‘broker protocol,’ which
means that if we follow certain rules and do certain things
at Merrill Lynch, we have the ability to leave the firm and
to talk to the clients. So, we have endeavored to do everything in our power to follow that protocol and we are very
comfortable with the way the future looks.
What is Corient’s goal and how does the firm plan to
differentiate itself from the competition?
We are a group of 12 people; seven senior financial
advisers, two financial analysts and three client service associates, all of whom have worked many years together, at
prior firms of Goldman Sachs and Merrill Lynch. Our entire
careers have been spent advising very wealthy families
and individuals and companies and non-profits. The idea
behind our firm is that we want to create a platform that is
truly differentiated to serve all the needs of [ultra-high-networth] investors; everything from investments to planning,
which would include trust and estate planning, commercial
[planning], credit and mortgages, through third-party advisers.
What type of clients does the firm hope to serve? Any
targeted markets?
We look for anybody that is running a business and might
have complicated financial needs we can address that
aren’t addressed by a firm. In terms of the industries, geographies, and those kinds of [things] we are not constrained.
We don’t target a particular industry or source of wealth. It
almost doesn’t matter to us how a client has attained their
wealth, as much as it does what are their values, what are
their objectives, what their core needs are, and how do we
address this.
Your startup has partnered with Dynasty Financial
Partners. What kind of benefits is the firm hoping to
gain from this partnership?
If you look at what the alternative would have been,
other than not using Dynasty, it would have been for us
to go out and try to build vendor relationships with 30 to
40 different companies and people that would bring to us
technology, research, investment products and real estate,
all those kind of things that we needed to be what we call
our middle office. By partnering with Dynasty ... they have
gone out and put together a platform that allows us from
day one to provide the service, support and technology
for our clients that we need to serve them in the best way
possible.
The second, equally important thing is that they expand
our already somewhat expansive network of people. So, for
instance, if a client needs credit, whether it’s a loan against
a portfolio, or a mortgage, or a yacht loan, or an aircraft
loan, we already have some relationships mostly in the
Southwestern United States to bring those resources to our
clients. But, with Dynasty, we now tap into a network across
the country that is exceptional. What that means for our clients is they get the best possible solution for the best price.
Do you expect to face a lot of competition from
startup boutiques similar to Corient?
In our target market, we compete against everybody,
we compete against other boutiques, we compete against
other brokerage firms, the trust companies — it’s a very
fragmented market. Over time, the answer is yes. We do
expect to face more competition from boutiques like us because there are going to be more startups. There are more
and more firms leaving the big brokerage firms, every week
and every month and we expect that trend to continue.
However, we are comfortable with our service model and
we have strong relationships with clients and we feel our
message resonates. We are not concerned by the model of
the competition as we are making sure that we just address
the needs of our clients.
h t t p : / / w w w. s n l . c o m
One SNL Plaza, P.O. Box 2124, Charlottesville, VA 22902 Phone: 434.977.1600 News fax: 434.293.0407 www.snl.com
© 2015, SNL Financial LC. All Rights Reserved. Proprietary and Confidential. Use limited and subject to SNL license.