April 23 (Reuters) - Former executives of famed brokerage E.F. Hutton & Co. are launching a boutique investment advisory firm that revives the old name, hoping that memories of the firm can attract brokers and customers two decades after Hutton faded from view.
Before being swallowed up through mergers, E.F. Hutton once had 19,000 employees and employed one of Wall Street’s most memorable advertising campaigns: “When E.F. Hutton talks, people listen.”
Now some former executives are building a new version of the firm, as first reported in The Wall Street Journal. The new firm will announce the hiring of financial advisers and other executives over the next few weeks, said Frank Campanale, a former E.F. Hutton and Smith Barney executive who will be chief executive of the new Hutton.
Campanale, until recently a wealth management executive at independent broker-dealer network First Allied Securities, said he sees an opportunity to fill a void in the wealth management marketplace.
“We’re trying to create a great firm with great culture, something E.F. Hutton had,” he said in a brief interview. “We have a clean slate.”
Campanale declined to elaborate on his plans.
Campanale ran the consulting groups at Hutton and later at Smith Barney, where he helped develop a number of successful fee-based asset management programs now common across Wall Street. Campanale left Smith Barney in 2004.
Several former executives and employees say the E.F. Hutton name gives the new firm a leg up against other new wealth management firms.
“The chances of it succeeding as a boutique are good,” said George Ball, former E.F. Hutton president who co-heads Edelman Financial Group. “It’s a start-up with a better chance of survival because of the lingering E.F. Hutton association.”
The original E.F. Hutton was sold to Shearson Lehman Brothers for about $1 billion in 1987 after the firm was caught kiting checks - writing new checks to repay previous checks to essentially get interest-free loans. Other issues, including debt and 1987 stock market crash, humbled the firm and spurred the firm’s decision to sell.
The name faded as Hutton became part of Citigroup and its Smith Barney brokerage, which became part of Morgan Stanley Smith Barney through a 2009 deal with Morgan Stanley.
“There are names that still have some cache and certainly E.F. Hutton is one of them,” said Robert Rittereiser, a 27-year Merrill Lynch veteran named chief executive of Hutton after the check-kiting scandal. “In the end you have to be good at what you do.”
Rittereiser, at 73 a consultant with Guidepost Partners LLC, said people want to identify with successful names. There are also former employees still in the brokerage business who have positive memories of the old Hutton.
Campanale said Christopher Daniels, a former Hutton investment banker, is helping launch the firm, as is John Lohr, former general counsel at Hutton’s consulting group. Stanley Hutton Rumbough, a grandson of the firm’s original founder, is also involved.
It remains to be seen, though, if the right names can win over customers.
Campanale’s group registered the Hutton brand name this month, he said. The Hutton name and logo had been held by Retriever Brands, a New Jersey firm that has a portfolio of abandoned brands.