A young advisory pair escaped wirehouse cost cuts to land at Wells Fargo

John Choudhary paced back and forth in front of his manager’s office, white folder in hand.

He had hoped to deliver the news that he was breaking away from UBS to his manager between 10 and 11 a.m. but two clients had called with sudden emergencies. One client was closing on a house. Another’s mother had just died.

Now, by mid-afternoon, both situations were dealt with. Then, just as he walked over to deliver the news that he and his partner, Anne-Day McCabe were invoking the Broker Protocol, someone else slipped into the office ahead of him.

So, he was pacing. Finally, as the minutes ticked by, he decided to interrupt the meeting.

After all, Choudhary had a lot still on his to-do list. After he and McCabe finally succeeded in delivering the resignation, they called their new custodian, Wells Fargo Advisors Financial Network. Once their licenses were transferred and their web site was up and running, they began with a series of calls and e-mails to inform clients.

Wells Fargo’s name bubbled up

McCabe and Choudhary established CAM Private Wealth Services on March 19 and are now reaching out to clients. They managed about $115 million at UBS; so far, 60% of their clients have completed the paperwork to transfer their accounts.

The firm, which is a broker operating through Well’s Fargo’s corporate RIA, has two offices, the main one in Reston, Va., and a meeting location in Tysons Corner, Va.
It has two employees: a client services associate and a part-time office administrator.

Wells Fargo, a growing player in the advisory world since its acquisition of Wachovia, has three channels for advisors: A private client group that includes about 12,000 advisors with Wells Fargo Advisors; the bank brokerage channel, which includes 2,900 financial advisors and 6,000 licensed financial specialists; and the independent brokerage group, which includes Wells Fargo Advisors Financial Network. The latter has about 1,000 advisors. For more about the company, watch next week for an RIABiz interview with the head of the independent brokerage group, John Peluso.

CAM Wealth Management was drawn to Wells Fargo by the combination of a big-company platform and the family feel of a regional firm. As the advisors spoke to other people, the company’s name kept bubbling up to the surface.

It didn’t hurt, either, that the company has one of the oldest and strongest brands in the business.

Fundamentally, both Choudhary and McCabe wanted to start their own business. Choudhary, in particular, had grown frustrated with the wirehouse environment and not being able to make his own decisions. Cost-cutting during the financial crisis made conditions worse, he said.

“It was getting harder to serve clients,” Choudhary said.

Choudhary said he had trouble reaching people at the home office “The phone would ring for 10 minutes on the bond desk,” he said. Though his assets under management had grown in 2008, he was not permitted to hire another assistant.

Recruiter Mindy Diamond, president of Diamond Consultants, said she spoke yesterday morning to a UBS broker who manages about $120 million and expressed similar frustrations.

“Merrill and Morgan and Wells have the money and scale to invest back into the things that matter to advisors, UBS does not. So, advisors have been unhappy about less than stellar technology for a long time. ... If you combine the cost cutting with the negative press surrounding the firm and the question marks that surround it in terms of what the final chapter will look like for them (will it be sold, to whom, when??), there isn’t a whole lot of reason for UBS advisors to stay put,” she said in an e-mail.

UBS declined to comment.

Young team aims for organic growth

The team at the heart of CAM Wealth Management is in some ways an unlikely pair.

Choudhary, now 34, began his career in Hackensack, N.J., in an office of 60 advisors, and built his practice the old-fashioned way, through plenty of cold-calling and attending seminars.

That was in 2000.

“A year later, it was like the world came to an end,” he said.

The events of 2001, from the NASDAQ crash to Sept. 11, brought home the importance of his role as a planner.

His experience in that downturn led to a conservative, goal-oriented approach through the next decade. He gathered clients, many of them nearing retirement, who were willing to commit to a plan of growth and asset distribution. Many were not in the position that they wanted to take risks and beat benchmarks.

Because he was able to protect his clients from the downside risk in the market, assets under management grew in 2008 as clients consolidated their accounts with him.
On average, assets under management have grown 15-20% a year.

Choudhary met McCabe through an associate. She had fallen into advising when, after graduating from college, she received a recruiting call from Ameriprise in 2006.
In her training, she liked the concept, “You need the mind of a capitalist with the heart of a social worker.”

Named 7th best producing rookie out of a nationwide class of 700 in her first year at Ameriprise, McCabe built a $10 million book of business. Most of that came with her in June of 2009 when she moved to UBS to join Choudhary’s team.

McCabe is the networking, relationship-growth half of the team.

“Meanwhile, you like to be behind your big screen watching the market,” she jokes to Choudhary.

The two intend to build the practice organically, through client referrals and by working with the second generation of families already in the practice.