Despite First Citizens BancShares agreeing to buy Silicon Valley Bank on Monday, the future remains murky for SVB's wealth management division and its advisors, according to Alois Pirker, CEO and founder of wealth management research firm Pirker Partners.
"We could see possibly a lot of [advisor] attrition" from now until the deal is finalized, he said in an interview with ThinkAdvisor, adding that some attrition happened already at SVB. "More attrition might happen at First Republic," Pirker predicted. Clients may flee also, he noted.
Overall, Pirker said, it's too soon to gauge how large the merged firm and its wealth management business will end up being.
The latest regulatory records for SVB show this wealth unit — acquired from Boston Private in 2021 — had close to $16 billion of client assets under management in 2022. About $14 billion of these assets were owned by high-net-worth clients.
It also had 190 employees. Of these individuals, 108 were registered with one or more state securities authorities as investment advisor representatives.
"It's so hard to get your arms around what really will be transitioned over" to the merged company, Pirker said. It will be "weeks or months at least to have a final tally" on what First Citizens will actually end up getting from SVB, he added.
Falling Tide
In a LinkedIn post earlier on Monday, Pirker quoted Warren Buffett, saying: "Only when the tide goes out do you discover who's been swimming naked."
"First Citizens Bank's takeover of Silicon Valley Bank is a great example of that," he noted.
"In comparison to Silicon Valley Bank, First Citizens Bank has always been flying much more under the radar [as the 36th largest bank in the U.S. by assets], despite having pulled off two dozen acquisitions during the last 15 years," Pirker said. "The SVB acquisition could very well change that and bring it much closer to the top league" of U.S. financial services firms.
