It what may be a case of serendipitous timing, a leading UBS Wealth Management Americas broker announced today he is moving his practice to HighTower Advisors. Jeff Leventhal (right) of The Leventhal Group, in Bethesda, Md., has been fielding calls for much of today from some of the 200 families and former clients who he says are eager to move over with him. The transition comes less than a week after his former brokerage’s parent, UBS AG, announced that a “rogue trader” in London had left the financial giant with $2 billion loss from unauthorized trading, raising new questions over the bank’s risk management practices three years after the global financial crisis erupted.
“I think what happened to UBS is not an indictment on UBS; it’s really just an indictment on the industry,” Leventhal, 41, said. “I wanted to be at a firm that was just an advisory wealth management firm, free of an investment bank. At the end of the day, I wanted to feel comfortable that I was at a place that was in the best interests of my clients. An open source independent model is, by far, what I think is not only the best thing for clients today, but the future of our business.”
Leventhal said he had about $400 million in assets at UBS, where he had worked since 2003. HighTower, a Chicago-based hybrid registered investment advisor, has been busy recruiting from wirehouses. Leventhal Group is the eighth practice it has signed up so far this year, and the first this year from UBS. Joining Leventhal from his practice is Evan Nowack, who specializes in asset allocation modeling, investment strategy and financial planning, and three staff. Leventhal, who worked at Merrill Lynch for eight years before going to UBS, said his average account size at UBS was $2 million.
Leventhal, whose title at HighTower will be partner and managing director, said he found the firm’s open architecture appealing. He expects to custody primarily with Charles Schwab, but said many of his clients want to keep assets with other custodians as well. Leventhal said he had considered independence for years, but the 2008 crisis provided more impetus.
The latest financial scandal was not uppermost on his clients’ minds today, he said.
“When I talked to my clients, the main focus was, “What is HighTower, who is HighTower, and why is it better?’” Leventhal said. “In this case, having a multicustodial platform…being able to shop for the best price for clients, is much more interesting to them than the news of UBS last week.”