Sarah Berry, managing partner, The Berry Group
This past September, Sarah Berry packed up her practice at Wells Fargo Advisors, where, throughout two rapid acquisitions she'd been a financial advisor for more than three decades, and opened an RIA two blocks away. In an interview, she tells ThinkAdvisor how Wells Fargo facilitated her move.
The bank's wealth unit has lost 1,118 advisors, as of Dec. 30, 2018, precipitated mainly by Wells' fake-account scandal that hit the headlines in fall 2016.
But that debacle didn't prompt Berry and partner Michael Machnowski to leave, even though client referrals had dwindled to a precious few; and in some situations, they "got painted with the headline news," managing partner Berry says. That, despite clients' awareness that WFA wasn't part of the fraud issue.
The Berry Group, in Worcester, Massachusetts, simply left because they yearned to be independent.
The perfect opportunity arrived in January 2019 when Wells launched an RIA channel with a program to attract add-on RIAs as well as existing Wells Fargo advisors.
The Berry Group, with about $580 million in assets under management, applied and became one of the first dozen practices and the only one in New England to be selected, according to Berry.
Under the program, Wells Fargo's Clearing Services, known as First Clearing, provides custody for the RIAs, and broker-dealer TradePMR, an outside firm, supplies back-office support.
About 97% of Berry's clients moved with her group of four, which includes three FAs. Clientele is mostly high-net-worth individuals, plus some endowments for nonprofits and a few pension plans.
What Berry was looking for was a work environment more in the model of A.G. Edwards, where she'd begun her career in 1978. Originally family-owned, it was, for one, far less bureaucratic than Wells. But in 2007, Wachovia acquired Edwards, and the following year, Wells Fargo bought the merged firm.
At Edwards, Berry built her practice on 300 seminars and without a single cold call. She stayed at the firm as an FA and manager, throughout both disruptive acquisitions and looked for the silver lining.
Then came Wells' RIA offer, too well timed to pass up.
ThinkAdvisor recently interviewed Berry, who was on the phone from her office in Worcester. The Bennington College graduate is on a mission to teach clients to be financially competent. That calling may have been inspired by her teacher dad: When she was 10 years old, he sat her down and taught her about the stock market.
Here are highlights of our interview:
THINKADVISOR: What appealed to you about becoming an RIA?
SARAH BERRY: Going independent. It's more like the model of A.G. Edwards that we had when my partner Michael Machnowski and I were there. The RIA gives us flexibility on how to plan our future and allows us to attract people into our practice that we might not have been able to at Wells Fargo.
Why wouldn't you?
We're located near Boston, where there's a huge amount of RIAs. When we were feeling out this idea earlier, some people we talked to weren't interested in working for Wells Fargo because of how the bank side had dealt with issues — which we all know a great deal about.
What impact did the Wells Fargo account-fraud scandal, to which you allude, have on your practice?
Though the client relationships were with us, the ethics of that whole situation certainly colored some people's [thinking]: A couple of nonprofit endowments had a lot of questions for us. None of our clients left, however. But we think that referrals pretty much stopped because of [the ongoing scandal].
What aspect of that made you decide to leave and start your own RIA?
