Why a senior Merrill Lynch advisor reluctantly broke away with ultra-affluent clients from the Texas oil patch
After getting the cold shoulder from his younger team members, independence with Wells Fargo's FiNet became attractive
Craig A. Campbell didn’t intend to leave Merrill Lynch until he was ready to retire. So, when two younger partners in his office in Midland, Texas, told him they no longer wanted to work on his team in Sept. 2009, it was a tough blow.
“They told me `We respect you. We respect your market knowledge, but we feel we need to go our separate ways,” according to Midland native Campbell, 60, who started his career in 1977 and had spent 26 years with the firm, first from 1977 to 1980 and later from 1987 to 2010. A Merrill Lynch spokesman declined to comment on Campbell’s departure.
When that happened, Campbell formed his own firm, Campbell and Associates Securities, LLC. The move came after soul-searching about whether he was ready to be an entrepreneur or wanted another wirehouse job.
Bumpy and difficult
“The move has been really bumpy and difficult,” he says. “For 23 years, I’ve been in one spot.” While he didn’t have to move a large number of relationships, he says, transferring the few he took with him was extremely complicated. “It is disruptive,” he says. “But I’m glad I’m here.” See: Smith Barney broker leaves wirehouse realm after 38 years
A small but growing number of advisors leave the wirehouses after long careers in-house. Moving toward the end of a career can be one way for an advisor to realize the value of the practice they’ve spent years building, says Danny Sarch, of recruiting firm Leitner Sarch. “These guys are sophisticated.” For stories of other breakaway advisors, see the RIABiz Breakaway Stories section.
Edward Rogoff, chairman of the management department at Baruch College in New York City and author of The Second Chance Revolution: Becoming Your Own Boss after 50, says that the growing trend in financial services reflects a broader one in corporate America, as older workers who are either laid off or decide to leave decide to start their own firms.
It doesn’t surprise him that someone with a history like Campbell’s would succeed. “Here’s someone who has built a network, he has the clients, he has a reputation, he knows the system, he has expertise,” says Rogoff.
Yet – the move didn’t look easy to Campbell when he was first considering it.
None of the staffers
After the partners split, Campbell had the option of remaining in the office and operating on his own under the Merrill umbrella. But having emerged with one-third of the book and none of the staffers, Campbell decided to leave.
“It was better for me to get out of there,” he says. “It wasn’t working. It wasn’t going to work.”
He wasn’t sure if he would accept another job or go out on his own. He’d had a long career that, after his original start with Merrill Lynch, took him to E.F. Hutton & Co. and Prudential before Merrill recruited him back. “There were tempting offers from the other wirehouses,” he says. “The thought of just having an independent shop was also very tempting. I kind of wondered how do you survive? It takes a while to get it going.”
Campbell’s entrepreneurial spirit won out. He left Merrill Lynch on Oct. 1, 2010 and set up his own firm in a space adjacent to an office in Midland he maintained to manage his family’s investments, bringing his assistant and an associate with six years of experience with him from Merrill Lynch. The manager of the family office helped him get set up. “The preparation wasn’t very much,” he says. “I felt like most of my time needed to be devoted to my clients.”
Campbell weighed the option of being completely independent but ultimately decided to affiliate his full-service investment advisory firm with Wells Fargo Advisors Financial Network, known as FiNet.
Decent reputation“Wells Fargo had a decent reputation as a company that was conservatively run,” he says. “The Bernie Madoff deal hit, and I felt I needed to associate with a name.” Campbell uses Wells Fargo’s InfoMax technology platform, which, he says, is similar to the one he used at Merrill Lynch.
Currently, Campbell has six clients, with about $200 million under management – down from the 29 clients with about $500 million that he says his office at Merrill Lynch had managed. See: This Merrill Lynch team leader broke away for fear of what might happen under Bank of America
Campbell says that he built trust with clients by gravitating to an “old fashioned” approach to investing. “We kept money safe by staying with T-bills, pre-refunded munis, normally escrowed with Treasuries,” he explains.
“I doubt we’ll get over 10 clients,” he says. “I put myself between a home office and a private bank type setup.”
That means keeping himself fully available to his ultra-high net worth clients, who come from the Texas oil community and entertainment industry and often set up multiple accounts for family members and various business entities.
$1 million bond purchases
“These bigger accounts are very complex and take a lot more time,” he explains. “It’s not just a question of buying $100,000 worth of bonds. You buy $1 million worth of each bond. When you get into that larger size, it’s harder to find that amount of inventory.”
While Campbell doesn’t want to build a huge practice, he does intend to hire a couple of associates once he gets to 10 clients. “I’d like to have registered reps,” he says, inviting interested applicants to contact him at email@example.com. He’s content to add to his clientele slowly, through word of mouth built by clients, who have trusted him for many years. “I don’t ever give them any reason not to, ever,” he says. “It’s full disclosure: the good, the bad and the ugly, all the time.”
As for Campbell, he says, he’s happy with his decision. “I’m getting happier by the day,” he says. While it wasn’t easy to go independent after years in corporate America, he says, “that doesn’t mean it isn’t worthy of the effort. I definitely feel it’s been worthy of the effort.”