Goldman Sachs Wealth Team Jumps Ship To Credit Suisse

A team of high-producing financial advisers left Goldman Sachs Group Inc. (GS) to join Credit Suisse Group's (CS) U.S. private banking unit.

The advisers--Frank Hogan, David Andrew and David Searls--together generated about $3 million in fees and commissions and managed more than $300 million in client assets, according to people familiar with the team.

A Credit Suisse spokesman confirmed the adviser team had joined the firm, but declined to comment on its production. A Goldman Sachs spokeswoman declined to comment.

The Houston-based team, which left Goldman in July, is the second recent departure of a private wealth team at the firm. On Friday, Citigroup Inc. (C) announced that it recruited Robert Blais and Hoyt Gier from Goldman's Seattle office.

Goldman is generally tight-lipped about its wealth business, which has roughly 400 financial advisers in the U.S. who provide investment and wealth advisory services to high-net-worth families, family offices, and institutions that include foundations and endowments.

The private-wealth business, part of Goldman's $802 billion asset-management unit, has received extra attention from Chairman and Chief Executive Lloyd Blankfein, in the wake of the investment bank's fight over a lawsuit filed against it by the Securities and Exchange Commission.

In May, Blankfein defended the firm's reputation in a roughly 30-minute phone call with wealthy clients of that business.

In the SEC case, regulators alleged that Goldman Sachs didn't disclose the role of hedge fund Paulson & Co. to investors in a collateralized debt obligation called Abacus 2007-AC1. Goldman later settled the civil fraud complaint by agreeing to pay $550 million.

The public and political scrutiny from that case has damaged the Goldman brand and given recruiters a reason to reach out to potential candidates at the firm, though many employees are still likely to remain given the investment bank's reputation and ability to highly compensate them.

Courtney Raymond Waldman, chief executive of a Houston-based financial services search firm, said, "The ongoing challenges at Goldman Sachs have filtered down to the adviser side of the business, and we expect to see more movement out of the firm."

-By Brett Philbin, Dow Jones Newswires; 212-416-2173; brett.philbin@dowjones.com

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