Breakaway Partners Claim Most of Hutchinson/Ifrah Assets

by Gwen Moritz  on Monday, Nov. 6, 2006 12:00 am  

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Recent filings with the Securities & Exchange Commission indicate that Patrick Ifrah and the colleagues who left Hutchinson/Ifrah Financial Services Inc. of Little Rock in January took three-quarters of the managed assets with them.
In March 2005, Hutchinson/Ifrah reported $345.8 million in assets under management. It is not known exactly how much was under management when Ifrah, Stephen DeSalvo, Micah Brown and Bobby Harris split with Hutchinson/Ifrah founder Eric Hutchinson in late January to form Ifrah Financial Services. By Aug. 23, however, Hutchinson's renamed Hutchinson Financial Inc. claimed $80.1 million under management; on Sept. 21, Ifrah Financial Services claimed $268.4 million.
Curiously, Ifrah Financial claimed only a few more accounts than Hutchinson Financial: 817 to 748.
DeSalvo, chairman of Ifrah Financial, explained the numbers by saying that Ifrah's wealth advisers "have some very loyal clients. And for wealth advisers that are very skillful, they tend to have larger client relationships."
Ifrah also has a lot more of them than Hutchinson. Ifrah's staff includes seven certified financial advisers and two more who are close to receiving certification, DeSalvo said. Hutchinson retained only himself and three other planners during the sudden corporate divorce in January.
There appears to have been relatively little client attrition — the total of the two firms is about 1 percent greater than the last known figure for the Hutchinson/Ifrah firm. DeSalvo described the Ifrah group's client retention rate as "outstanding."
"Our clients are very happy with our new offerings, with being a team approach, and we're really excited about it because we have a great base going forward," he said.
Hutchinson/Ifrah ranked third on Arkansas Business' inaugural list of the state's largest money managers when it was published in November 2005. After the acrimonious split, Ifrah Financial is No. 4 behind Stephens Capital Management, Foundation Resource Management and Forest Hill Capital, all of Little Rock. Hutchinson Financial came in at No. 17.
The list ranks Arkansas-based registered investment advisers by the value of assets under management claimed in their most recent Form ADV filings with the SEC, provided the ADVs are not more than 15 months old. Some money managers, including Legacy Capital Group and Delta Trust Investments, work through other RIAs and are not listed, though their presence in the market is larger than many of those that are on the list. (Legacy, for instance, manages some $135 million, according to principal Matt Jones.)
Stephens Capital Management, which is headed by Warren Simpson, increased its assets under management by more than $300 million between September 2005 and September 2006 — growth of more than 10 percent. With $3.1 billion under management, it is three times the size of its nearest Arkansas-registered competitor, Founda-tion Resource Management. But, on a percentage basis, Foundation Resource grew by almost 20 percent, from $880 million to $1.05 billion.
Foundation Resource Management specializes in investment management for insurance companies, charitable foundations, hospitals, retirement plans and some very high net-worth individuals. Its $1 billion in assets are divided among only 92 accounts, according to its Jan. 1 ADV filing. (Stephens Capital, by contrast, claimed more than 2,000 accounts.)
Stephens Tops List
Stephens Inc., the broker dealer side of the Stephens financial empire, also tops this week's list of the state's largest stock brokerage firms, which are ranked by the number of registered brokers working in the state.
Stephens' cadre of 305 registered representatives is nearly twice that of its nearest competitor, the Edward Jones organization, based in St. Louis.
Last year's list of broker dealers credited Stephens with 494 brokers, but that count included all who are licensed to sell in Arkansas, not just those who are actually based here.



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