Exclusive: Cantor Fitzgerald to start wealth management business
By Jed Horowitz
NEW YORK (Reuters) - New York firm Cantor Fitzgerald, which is branching out from its core business of electronically trading bonds with other brokers, plans to start managing assets for wealthy individuals around the end of the year, a company spokeswoman confirmed.
Cantor Chief Executive Howard Lutnick has amassed a wide range of new businesses to offset lower income from trading commissions that have fallen due to technology and declining volume.
Cantor Fitzgerald Wealth Partners will cater to people with at least $5 million to invest, with an emphasis on those with $50 million, said Stan Gregor, co-chief executive of the new unit, in an e-mailed statement.
Gregor, a former private banking executive at Wells Fargo & Co. (WFC.N: Quote) joined Cantor earlier this year.
The new business would be Cantor's first to work directly with individuals.
Wealth management is becoming more popular with Wall Street firms eager for steady fees to offset more volatile investment banking and trading revenues. Most wealth management firms get paid a percentage of the assets clients entrust to them.
Cantor will be entering a highly competitive area populated by large and small broker-dealers, asset managers and consultants offering different models to successful financial advisers. Many brokers are shedding licenses that let them collect commissions on stock, bond and fund sales to become fee-based registered investment advisers, a transition they say lets them be more objective about their advice.