Million-Dollar Morgan Stanley Duo Jumps to RBC
Richard Frankel and Shawn Patt didn’t move for a better commute when they jumped from Morgan Stanley’s Wilshire Boulevard branch in Beverly Hills to RBC Wealth Management’s office three floors down in the same building a few days ago.
Now they are hoping that their clients move just as easily.
The pair produced $1.6 million in the past year and managed some $507 million of client assets, according to RBC, but Frankel said his former office-mates aren’t making the account transfers easy.
“They put on a full-court press to destabilize my 40-year business,” the 43-year brokerage industry veteran said. “They have their brokers calling our clients to offer syndicates if necessary, cut fees if necessary, anything they can do to keep our clients.”
A spokeswoman for Morgan Stanley confirmed the departure but declined to comment further.
Frankel, to be sure, has faced ACAT challenges before. After spending his early career at regional firms Bateman Eichler and Becker Paribas, he worked at Drexel Burnham Lambert in the mid-1980s, jumped amid that firm’s crisis to Donaldson, Lufkin & Jenrette where he stayed for almost 13 years, and then spent seven years apiece at UBS Financial Services and Morgan Stanley (by way of Smith Barney).
Patt, who became a broker in 2002 with SunAmerica Securities, followed along with his senior partner on the journeys from UBS to Morgan Stanley before their elevator flight down to RBC last week.
The smaller firm has some 24 brokers in the branch and about 80 in the Beverly Hills complex managed by Mike Melton, who himself worked at a Morgan Stanley San Diego branch from mid-2009 to early 2013, according to his BrokerCheck work history. In a brief phone call, Melton said he had not known the team at Morgan Stanley.
Michael Armstrong, the head of Minneapolis-based RBC Capital Markets wealth group since August, spent most of his career at Morgan Stanley. He could not be reached for comment.
The Frankel-Patt move comes amid a drought of recruiting deals as firms recalculate payment formulas in the face of restrictions on deferred pay mandated by the Department of Labor’s fiduciary rule. Even if the rule is delayed or retracted under a Trump administration, many firms appear to be embracing its prohibition on production incentive goals in retirement accounts, several recruiters said.
Frankel said RBC made some last-minute changes in the team’s deal, but declined to elaborate. An RBC spokeswoman said only that the firm has reviewed its practices to ensure compliance with the guidance that the Labor Department has issued.
The veteran broker said a strong allure of RBC was its willingness to be more flexible and service-oriented than larger wirehouses. Morgan Stanley restricted his ability to buy attractively priced bonds that were trading away from its own desk, he said.
Constance Johnson, the team’s senior client associate at Morgan Stanley, joined them in the move.