University of Iowa Community Credit Union headquarters in North Liberty. CREDIT DESIGN ENGINEERS
By Katharine Carlon
In a surprise move, the wealth management team at the University of Iowa Community Credit Union left the financial institution en masse on April 26, announcing plans to launch their own firm and taking their clients’ business with them.
In all, 15 former UICCU officers and wealth advisors decamped to form United Iowa Financial, which will have offices in Cedar Rapids at 1120 Depot Lane SE and in Iowa City at 2345 Mormon Trek Blvd.
According to an email sent to clients and obtained by the CBJ, Eli Wynes, the former managing director of UICCU’s Wealth Management division, will serve as CEO of the new firm. Among other executives, Mark Law will serve as chief investment officer, Michael Lehman will be chief planning officer and Mollie Thomsen will serve as Chief Operations Officer.
Mr. Wynes declined to comment on the decision to leave UICCU. Jim Kelly, UICCU’s chief marketing officer, said in an interview that the group’s departure was “not completely unprecedented,” but acknowledged that “it did catch us a little off guard.”
The same team previously left MidWestOne Bank to join UICCU about a decade ago. Mr. Kelly said the former employees had not signed non-competes and could, in theory, take their roster of clients – and their business – with them to the new enterprise.
Mr. Kelly emphasized that all wealth management accounts remain unchanged and will be managed by the same advisors on the same platform, but would no longer be under the umbrella of UICCU.
“Everything is intact. The only change is [the team] is operating at a different location,” he said.
In a follow-up statement, UICCU CEO Jeff Disterhoft recast the group’s departure as an opportunity to review and restructure the credit union’s wealth management operations for the benefit of its members.
“While unexpected and unfortunate, this will give UICCU the opportunity to further develop its Wealth Management division to better serve its members throughout the region going forward. We have already heard from a number of members expressing their trust and confidence in the credit union who are eager to move their accounts back to the cooperative.”
The institution noted that it will be communicating with members soon on “how they can bring the management of their funds back to UICCU,” and that it will cover the fees that might be charged for bringing funds back.
UICCU’s former wealth management team managed $851 million in custodied assets as of February, according to a Forbes ranking of best wealth advisors by state. Mr. Wynes ranked No. 21 on the list, which is based on a combination of qualitative and quantitative criteria, according to the publication.
Mass defections are not uncommon in the financial world. Last week, a Texas-based Morgan Stanley team that managed more than $6 billion quit to go independent with help from Dynasty Financial Partners in one of the largest advisor moves of the year so far.
But the news comes as UICCU is grappling with a major rebranding and name change prompted by state legislation banning credit unions from using the names of Iowa’s public universities in their own names. It also comes amid pressure from the banking industry to end the tax benefits nonprofit credit unions enjoy. With 19 office locations, UICCU has grown to become the largest credit union in Iowa, with more than $5 billion in assets and 195,000 members.
As of CBJ press time, a link to the UICCU Wealth Management page notifies members it “is currently not accepting new clients,” and directs existing clients to an Investor360° page to view their accounts. CBJ