Giant Indiana RIA is the latest to take a bite out of Wells Fargo's UHNW unit

One of the nation’s largest RIAs, Oxford Financial Group Ltd, has just snagged five veteran advisors from Lowry Hill, the Minneapolis-based wealth management business unit owned by Wells Fargo.

A number of RIAs have fled Lowry Hill since January, when Wells Fargo announced it was merging its corporate family office business, Wells Fargo Family Wealth, with its $26 billion in assets, with Lowry Hill, which manages about $5 billion in assets from four offices. See: Evercore feasts on veterans of an elite Wells Fargo wealth management unit.

“These people have really sort of fallen into our lap because of all of the change happening at Lowry Hill,” says Mark Green, Oxford’s chief investment officer.

The addition of these advisors allowed Oxford to open its first Minneapolis office on Sept. 7, says Green. The firm is headquartered in Carmel, Ind. and also has offices in Chicago; Cincinnati; and Grand Rapids, Mich.

“We have been strategically and quietly working in Minneapolis and the Twin City markets for a few years,” Green says. “We’re thrilled to have these people join us. We were hoping we could find people with similar philosophies regarding independence.”

New faces

Oxford’s new team is composed of Thomas A. Gunderson, who logged five years at Lowry Hill; Cameron R. Johnson, a nine-year veteran; Kristine J. Merta, an attorney who has been with the firm for 14 years; Kathleen L. Kuehl, an attorney who rejoins the team after leaving Lowry Hill in April, after nearly 11 years, for JP Morgan’s Private Wealth Management Group in Minneapolis; and Laura J. Clark, who spent five years at Lowry Hill.

Gunderson and Johnson will serve as senior investment strategists in Oxford’s Minneapolis office with Kuehl and Merta acting as directors. Clark will serve as a director in the firm’s Chicago office.

Kristine Merta: We felt like Oxford
was a stable firm that wouldn’t
go away. They’re not going to
be sold or merged and it’s
not a big bank.

Oxford was founded in 1981 by Jeffrey Thomasson, the company’s CEO and managing director, and the multi-family office now works with more than 500 families and has $5 million in net worth in 35 states. Oxford has grown from $12 billion in assets under advisement in 2009 to more than $16 billion in assets under advisement currently. Of that, about $10 billion is under management. The firm has 125 employees of whom 21 are advisors 16 are shareholders. Oxford was ranked No.4 in Financial Advisor' s top RIAs of 2011. Bloomberg Markets ranked the firm No. 3 in top firms by asset growth in 2010.

A race for assets

In an unusual twist, the team is bringing no promised assets to Oxford. That’s because in Lowry Hill’s business model, all clients are served by at least two advisors, so it’s common for one advisor to be working with different advisors throughout the organization. It also means that at least one of a client’s advisors may still be working at Lowry Hill.

“It was… a collaborative environment,” Clark says. “It’s a double-edged sword because now so many people are leaving and everyone is talking to the clients.”

The former Lowry Hill advisors are now contacting clients and trying to bring over assets, according to Clark. Oxford declined to say how many assets these advisors oversaw while at Lowry Hill.

Not fade away

Merta says she was attracted to Oxford by the firm’s size and stability combined with its independent approach.

“We felt like Oxford was a stable firm that wouldn’t go away,” she says. “They’re not going to be sold or merged and it’s not a big bank. I think they’re very creative, innovative people.

Merta declines to disparage her old firm but acknowledges that the changes at Lowry Hill prompted the move. She says the advisors made their decisions independently but also consulted with one another. “We knew we were going over as a group [but] we were each attracted to Oxford Financial for various reasons.”

Clark was also unsettled by Lowry Hill’s merger with Wells Fargo Family Wealth. “When these small successful boutiques get rolled into big banks things change and it’s difficult to continue to do things the same way we were doing them,” she says.

Looking to grow

Oxford wants to expand and is keeping a close eye on underserved Midwestern markets, Green says.

In January of this year, the firm acquired the remaining 50% of Crowe Wealth Management. The company had already owned 50% of the Oakbrook, Ill.-based firm. Crowe Wealth Management was formed in 2003 as a joint venture between Oxford and Crowe Horwath LLP, and all personnel and clients merged into Oxford’s Indianapolis and Chicago locations. In addition, Oxford kept open a Grand Rapids office where Crowe Wealth Management’s personnel had worked.

The merger brought an additional $1 billion in assets and an additional 60 individual, family and institutional clients to Oxford.

“We want our clients to be qualified purchasers,” Green says. “That’s where scale really can kick in for the services we can provide. I fully expect us to grow in a number of years.”

Carrying on

Commenting on the latest defections, a Wells Fargo spokeswoman Julie Andrews said: “We have a deep bench of experienced professionals at Lowry Hill, including 18 principals with an average of 26 years of experience. Our clients are our primary focus, and we will continue to provide them with the high-touch service they have come to expect. We will continue to serve the same clients as we do today.”

Lowry Hill has a minimum account size of $10 million while Wells Fargo Wealth requires $50 million per account. However, as the two units merge, Lowry Hill clients will not be turned away even if their assets are below $50 million, says Andrews.