The move is just one example of advisers looking to distance themselves from Wall Street brokerages, which have undergone heavy losses and tarnished reputations during the financial crisis. It isn't a new trend for brokers to set up independent practices, but the number who are choosing that route has increased. Among brokers leaving major firms, also known as wirehouses, the percentage who set up independent businesses climbed to 18% in July, more than tripling from 5% in January, according to Discovery Database, a firm that tracks adviser moves each month.

Discovery also said less than 30% of those brokers who left a wirehouse joined another one in July, compared with nearly 70% in January. Others went to regional firms, changed to an institutional focus, or went to banks, insurers or other types of financial firms.

Grist said the "intangible glue" at major brokerages has softened due to a host a factors, including lack of faith in senior management, management changes, plunging deferred compensation, and bad headlines from the firms.

He said more than 75% of those advisers going independent through Schwab came from wirehouses.

Over the past year, mergers in the industry have created large brokerage forces at Bank of America Corp.'s (BAC) Merrill Lynch, Morgan Stanley Smith Barney, and Wells Fargo & Co. (WFC), which purchased Wachovia Securities.


-Brett Philbin, Dow Jones Newswires; 212-416-2173; brett.philbin@dowjones.com (Kristen McNamara contributed to this report.)


To be sure, the major brokerages are still a dominant force within the industry. According to Cerulli Associates, wirehouses still controlled nearly half of all U.S. adviser-managed assets at the end of 2008 - about $3.9 trillion, Independent broker-dealers and investment advisory firms oversaw about a third of adviser-managed assets - approximately $2.7 trillion.

Barnaby Grist, managing director of Schwab Advisor Services, said the firm had almost no large teams who moved in the first four or five months of the year. However, he said Schwab has seen more interest from $1 million-producing teams since June.

Bob Ellis, principal at research firm Novarica, says broker moves now still reflect the "fallout from the economic crisis" and financial meltdown. Leaving a wirehouse to become independent isn't a quick process, as brokers must settle licensing and compliance issues as well as find office space.

The Three Bridge team said clients didn't mind, or even welcomed, the move. "One of the things we found was that there was a significant lack of confidence in the banks and it goes back to their focus on short term profitability," Thurber said in an interview.

"We have had a resoundingly positive response from our clients in understanding why we decided to (move) and leave fairly significant retention bonuses and offers from other wirehouses on the table to take our practice elsewhere," he said.

A Morgan Stanley Smith Barney spokeswoman confirmed the team had left the
firm, but declined to comment on their production or prior asset figures.

Schwab has attracted many such teams in 2009, who have either chosen to set up their own independent registered investment advisory shops or join an RIA firm. In the first half of 2009 through July, Schwab's Advisor Services segment has helped 86 adviser teams set up independent practices, up from 62, a year ago.

Other companies performing such custodial services for advisers leaving wirehouses include Fidelity Investments, Pershing LLC, and TD Ameritrade Holding Corp. (AMTD).

"What we have seen is a lot of the bonds" connecting advisers to "the wirehouses have just fallen away," Grist said.

Another team of registered representatives who work with wealthy clients has turned its back on Wall Street to become independent registered investment advisers.

The team, Eric Thurber, Fred Molfino and Brett Sharkey, left the Menlo Park, Calif., office of Morgan Stanley Smith Barney on Aug. 14 to create a new advisory firm, Three Bridge Wealth Advisors.

Schwab Institutional of San Francisco will be the custodian for the firm's advisory and wealth management business.

The advisers said they had $740 million in client assets before leaving to start their own firm, also in Menlo Park.

The three advisers said they were "frustrated" with working for a wirehouse for a number of reasons, including the emphasis on short-term goals and quarterly profits, and being both a producer and distributor of financial products. Many of their clients work in the venture capital and private-equity businesses, they said.

After looking at other wirehouses and contemplating taking a giant bonus to move to a competitor, the advisers decided to strike out on their own.

"We couldn't explain to clients how things would be better" at another wirehouse, said Mr. Sharkey, who along with Mr. Thurber and Mr. Molfino, is a managing director at Three Bridge.

Many of their clients are in the process of moving assets to the new firm, the advisers said.

Christine Pollak, a Morgan Stanley Smith Barney spokeswoman, declined to comment about the team's departure. She added that turnover among top brokers at the firm has been extremely limited.

As an SEC-Registered Independent Advisory firm, we strive to provide a level of service that we believe brokerage houses simply cannot afford. Some brokerage firms focus on short-term, firm-wide profitability. This leads to the following general problems: (1) Conflicts of interest, as the best product for the firm may not be the best product for the individual client; (2) Bureaucracy that constantly impedes an advisor's ability to provide world class service; and (3) Limited access to services, products, and research.

Many brokerage firms serve the masses. As such, the size of the assets they manage make it difficult to access certain opportunities for outperformance. In other words, an affluent client's needs may be subordinated to the needs of the brokerage and its collective client base. Independence affords us the opportunity to serve the individual needs of the affluent.

As an independent adviser, we are committed to delivering the standard of service only a boutique firm can offer. Our primary focus is providing:
- Preservation of client wealth
- Truly comprehensive wealth advisory services for the affluent
- Fully customized solutions that reflect our clients' particular values, interests, and goals
- Security of client assets
- Transparency of fees and costs
- Meticulous, diligent execution
- Access to the best managers and professional service providers

OUR VALUES-BASED PHILOSOPHY
At Three Bridge, we are continuing the investment philosophy that has always driven us. We begin with our value-driven process in which we work with select successful families and individuals. This process affords us the time necessary to learn about you - your family, your goals and interests, your vision and values. Based on in-depth discussions, we seek to craft comprehensive solutions that align your wealth with your values.


THE ADVANTAGES OF INDEPENDENCE
Greater Access to Money Managers, Products, and Services
Many brokerage houses limit the scope of products and services they offer according to two criteria: (1) What's best for the firm; and (2) What works for every client - that is, products and services must serve the vast client base of the brokerage firms. As an independent adviser, we do not know such limitations.

We have extensive experience vetting professional money managers, hedge funds, and alternative managers. We believe that in order to optimize returns, many top performing investment managers must limit the capital they manage and therefore choose not to work with large brokerage firms.
As an independent adviser, we will have broad access to these top tier managers.

We also have the ability to establish multiple relationships on Wall Street for certain structured transactions which we believe will allow for more competitive pricing of instruments such as derivatives, insurance, and capital markets trading.


Greater Breadth of Objective Research
Being independent, we are not tethered to a single research source. We have wider access to expert opinion and information, as well as knowledge and tools that enable us to be more intelligent about global capital markets.

We are not limited by the legacy technology systems of the brokerage firms. Our systems allow for real time access to portfolio information which helps us better manage risk exposure for our clients.


SAFETY AND SECURITY OF ASSETS
Client assets will not be held by Three Bridge but custodied at Charles Schwab Institutional. Three Bridge will continue to be your wealth advisor and have your granted authority to manage assets, but no authority to remove assets from your accounts except per your authorization to debit fees.

After completing thorough due diligence on the top custodians, we have decided to custody assets at Schwab Institutional because of the level of service, integrity, and security that we believe is unsurpassed in the industry. Schwab Institutional is the leading custodian of investment adviser assets.*

We understand what it means to put your trust in us to manage your assets and help with your affairs. As an independent adviser, we are required by law to assume the role of fiduciary and to always put your best interests ahead of our own. This is not a standard required by a traditional broker. Most importantly, we are committed ethically as a firm to always act in our clients' best interest.

THREE BRIDGE IS NEW. WE ARE NOT.
We are the same team who has worked closely with you and your family over the years, the same team who knows you and understands your financial goals, your needs and interests. This ensures a continuity of service and, more importantly, of trust.

The creation of Three Bridge is an elevation, an optimization, of the service we have always provided.

As always, we believe in our collaborative approach. Our boutique structure allows us to truly foster this collaborative practice as every employee of Three Bridge is personally vested in providing the best possible client experience.

INSTITUTIONAL SERVICES
In addition to our wealth advisory practice, we provide specific services that support the venture capital and private equity community. We bring extensive experience and a focused dedication to providing diligent, meticulous service.

As an independent firm, we deliver thorough service without the bureaucracy that tends to hinder brokerage houses.

We provide:
Distribution Management
Restricted Stock Sales and Settlement
10b5-1 Plans
Hedging and Monetization
Retirement Plan Services: Defined Contribution and Defined Benefit Plans

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Three Bridge represents our uncompromising commitment to offering the highest possible standard of service. It is the realization of our philosophy, our personal passion, and our unwavering dedication to serving you and your family.

Welcome to A Life Well Lived. Welcome to Three Bridge.

We are excited about this change and look forward to working with you and your family for many years to come.

Eric T. Thurber
Fred Molfino Jr.
Brett Sharkey
Jonathan H. Porter
William G. Hains
Ivan Chan

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Three Bridge Wealth Advisors
2180 Sand Hill Road, Suite 400
Menlo Park, CA 94025
T 650 433 3500
F 650 433 3501
www.threebridgewa.com

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*Schwab Institutional is the leading custodian of investment adviser assets with $589 billion. Fidelity is second with $210 billion; TD Waterhouse third, with $78 billion. (As of June 30, 2009; for more information: visit http://www.schwabinstitutional.com.)

Three Bridge Wealth Advisors, LLC ("Three Bridge") is an SEC registered investment adviser with its principal place of business in the State of California. Three Bridge and its representatives are in compliance with the current registration and notice filing requirements imposed upon registered investment advisers by those states in which Three Bridge maintains clients. Three Bridge may only transact business in those states in which it is noticed filed, or qualifies for an exemption or exclusion from notice filing requirements. This brochure is limited to general information about our investment advisory services. Any subsequent, direct communication by Three Bridge with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of Three Bridge, please contact Three Bridge or refer to the Investment Adviser Public Disclosure web site (www.adviserinfo.sec.gov). For additional information about Three Bridge, including fees and services, send for our disclosure statement as set forth on Form ADV using the contact information herein. Please read the disclosure statement carefully before you invest or send money.

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