I should start out by saying this is a major tragedy for the Zier family and all of the innocent clients and employees at Convergent. In no way do I want to make light of what happened in October or cause any more harm than has already been done. They have it tough enough as it is.
That said, the rabbit hole goes deeper and all of the cards are not on the table.
Until December 2nd, the trail had gone quiet on Convergent. A release came out stating that a former director at Convergent landed a new gig elsewhere.
The next day, December 3rd, a piece at Investment News came out announcing the news that Douglas Wolford, formerly COO at Convergent, had been named as the internal successor to David Zier at CEO.
Wolford does everything possible in the Investment News story to convey that everything at Convergent is A-OK and the squeaky clean RIA was about to enter a new era - even comparing the firm to Apple after Steve Jobs departed. Note to Wolford: Jobs didn't commit suicide via cancer.
While painting his rosy picture of Convergent, I can't help but notice a glaring inconsistency in Wolford's story. First, Wolford says none of the 45 advisors at Convergent have left. What about the December 2nd story linked above? The former director's new job title is "senior client advisor." I have to think this qualifies as an advisor leaving Convergent to be an advisor elsewhere, but maybe I'm a little confused. Maybe Doug can clear that up.
Second, I have a source who indicates at least FOUR advisors (nearly 10% of the "roughly 45 advisors") have already left Convergent and that the situation is much worse than depicted by leadership. If true, then Wolford is lying to the press in order to suppress possibly important information about the firm he now supervises as CEO. That would not be a very good start.
Wolford also states assets under management (AUM) lossses have been minimal. Let's say that's also a fib - what do we have? We'd have a wealth management firm bleeding not only crucial points of contact in advisors, but also the clients who provide the firm's top and bottom line. Client assets are notoriously "sticky" in that they are typically retained because of a trusting relationship, and not necessarily because of the name on the logo of their statements. If advisors are heading out the door because they don't want "Convergent Wealth Advisors" on their resume, and clients are exiting because they are losing trust, we have what could be a pretty ugly spiral.
City National has clearly not put its foot down here, as allowing the promotion of an internal successor does nothing to wipe the slate clean, so to speak. What was festering below the surface was allowed to continue. An outside CEO would have a chance to clean house.
Where is City National in all of this? Why won't they put their foot down?
More to come, I'm sure. I'll keep you posted.