If former E.F. Hutton execs run their new brokerage as effectively as their famous ad campaign of decades past, a host of financial advice teams and experts will certainly be paying attention and trying to break into that firm’s new ranks.
Before it was absorbed through mergers, E.F. Hutton once had 19,000 employees and was known by one of the most successful ad slogans on Wall Street: "When E.F. Hutton talks, people listen."
Now that former Hutton execs—including Frank Campanale, a former E.F. Hutton and Smith Barney manager—are talking about resurrecting the Hutton name as a boutique investment advisory firm, those with Separately Managed Account (SMA) expertise and other fee-based advice experience could be among the most attractive hires.
This is according to Alois Pirker, an Aite Group research director focusing on wealth management.
Pirker tells eFinancialCareers that while at E.F. Hutton, Campanale was a pioneer in fee-based models for SMAs and Rapid Portfolio Management (Rapid PM) products, and that in his former role at Smith Barney, Campanale helped the firm transition from commission-based to fee-focused business.
Hutton was a pioneer of the SMA, and whereas these products began as the province of institutions, Campanale helped to convert them into something that could work for individuals with as little as $1 million to $2 million in investable assets, Pirker says.
As for the structure of the new brokerage firm, Pirker notes that Campanale is simply seeking rights to the Hutton name, and that he and the other executives in his group are essentially starting from scratch with the new firm they’ve announced they’re starting.
"We're trying to create a great firm with great culture, something E.F. Hutton had," he told Reuters. "We have a clean slate."
Pirker previously told the Wall Street Journal that the firm will have in its favor the fact that the E.F. Hutton name has a "certain legacy and heritage" and wasn't one of the firms "tarnished during the financial crisis."
But starting an altogether new advisory boutique will probably require hiring either teams of brokers or an entire property as opposed to hiring one advisor at a time, Pirker tells eFinancialCareers, observing that there are currently brokerage franchises out there which are “lacking in scale and under stress,” that Campanale’s group may wish to tap private equity funds to purchase such entities as Cetera has done with Genworth.
Campanale has said the new firm will announce the hiring of financial advisers and other executives over the next few weeks.
Campanale also now says that Stanley Hutton Rumbough, a grandson of founder Edward Francis Hutton, will be involved in the relaunch of the advisory firm.