Lebenthal, a firm with an iconic 89-year old Wall Street brand and a year-old wealth management division, is on a recruiting mission.
So far Lebenthal has recruited a $1.2 billion Morgan Stanley team and a $600 million team from BNY Mellon. This week Lebenthal expanded to the oil fields of North Dakota, picking up a former Morgan Stanley branch manager and two independent advisors.
Frank Campanale, CEO of Lebenthal Wealth Advisors and a former executive at Smith Barney and E.F. Hutton, says the firm aims to have about $25 billion in assets in five years, which he asserts is a conservative estimate.
"I think we are going to blow past it."
Campanale recently sat down with On Wall Street to talk about the firm's growth plans, the importance of an equity stake for advisors, and why contagious passion is key to building a new business.
What was the motivation to start Lebenthal Wealth Advisors?
I think there is a sweet spot for a firm that is focused not on huge heights with thousands of advisors, but one that is focused on being a boutique – and I know that is a cliché – but a boutique firm that is focused on having high quality advisors.
"The good of the client isn't just important, it's everything." We have that motto on every table.
Clients will welcome that and advisors will welcome the opportunity to be part of something that is more driven by the client than the shareholder.
I think it's really hard for a big firm that is publically traded, trying to meet quarterly estimates, to provide that high level of service to the clients without putting a lot of pressures on advisors that they don't necessarily want.
You've pulled over a few big teams this year. What was appealing for them to join Lebenthal?
The advisors we bring in we bring in as partners.
Not only do they have an opportunity to grow their practice, they have a much more open model to provide what they believe to be the best possible service, and to use the best technology – we have a modular approach that lets us plug in what's best.
We're looking at marketing firms, and I have some say, but it's not what is most important – it's what will help them promote themselves in their marketing niche.
The advisors that join us, have a voice in what services we offer because it provides the opportunity for them to provide better service to their clients. Think about what that would mean to an advisor to have that kind of proximity to management.
They can also do better financially here because we have a better payout. We're not as greedy about what the firm should keep.
How important is the brand?
It matters a lot. If you don't have that brand equity out there, you're pushing on a string. If they don't let you in the place because they don't recognize you, then it's a harder road.
Brand is a big deal. It takes time and it's important to advisors.
Does offering an equity stake help when recruiting?
We have found that it is very important. You're going to see that in every case, and especially with what we call these founding partner advisors, that we are providing them with equity and the ability to earn more equity in their practice.
I'm doing it for the equity in the firm, and I really believe that we are going to create shareholder value. When we meet with advisors, they recognize how passionate we are about doing this and about doing it right. They find the equity position very attractive.
You moved into new offices on Park Ave. in Manhattan earlier this year after a long search. Why this location?
When we were looking at office space around here, the real estate agent kept taking me to mahogany, wood-paneled offices and I said to the real estate agent, "This isn't it. I want something like Google or Facebook."
I want a firm that pays attention to where the money is going which is to the millennial generation, a firm that understands that generation and is thinking about how to serve them.
When the real estate guy brought us to this office, and I saw the marble columns in the lobby, I thought, 'This is going to be the same thing.' But I saw the [modern] furniture and glass walls, and Alex [Lebenthal] and I were like, "This is it."
How big do you want to grow?
We don't need thousands of advisors to be a great firm. If we had two really great teams in every state, it'd be fabulous. It'd be profitable. We have a goal that we would like to be at $25 billion in assets in five years, and I think that is a conservative number. I think we are going to blow past it. It's really more about quality than quantity for us.
If you talk to the teams that we have brought over, then I think a lot of people would be very impressed. They are very smart. Carrie [Gallaway] and Andrew [Stern], from Morgan Stanley originally, are in their mid-30s. They are fabulous and I would put them up against the best of the best from any firm.
What are you looking for in future advisors?
Ethics. Quality service, obviously. You want talent, intelligence, curiosity and passion for the business. As weird as this sounds, it's not typical.
Passion is really contagious. When someone is really passionate about something, it spreads to the people around them. I'm 64 years old, and I haven't lost my passion for this business. I look for that in advisors, that they want to do more and better for their clients, that they come in and beat the c---p out of you for something they want in order to do better for their clients.
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