Star adviser Garth Hu makes an awkward landing after his Morgan Stanley exit

Kieran Berry during the Covid-19 pandemic at the time touting his since collapsed fitness equipment manufacturing side business. Picture: Richard Dobson

Garth Hu has topped Barron’s Top 150 Financial Advisers list for the past five years with Morgan Stanley.

So why is he now operating out of the offices of a far smaller Sydney advisory shop which is currently under investigation by ASIC?

Hu and long-term offsider Cathy Ding quit Morgan Stanley Wealth Management last month to set up their own show, ending 15 years bringing in billions of dollars for the bank’s wealth management arm – mostly from Chinese clients.

Both, along with a small team they took with them from Morgan Stanley, are now operating under the auspices of Kieran Berry’s RiverX Financial Services.

ASIC records show Hu, Ding and Gloryhouse Wealth Management – a company set up by Hu in September shortly after he left Morgan Stanley – were added as authorised representatives of RiverX earlier this month.

That’s not an uncommon arrangement. It takes a fair while to set up your own financial services licence, and you’re taking a risk if you start the process while you’re working for one of the big banks.

Still, it seems an odd decision by Hu. His own portfolio with Morgan Stanley, estimated at around $4bn, outweighs that of RiverX by a wide margin.

Former top Morgan Stanley adviser Garth Hu. Picture: Jesse Marlow

And then there are the newly launched ASIC investigations into RiverX over allegations – vehemently denied by Berry – that the company’s advisers preyed on victims of the $500m First Guardian collapse, charged clients fees for no service and then got rid of staff who called out the bad behaviour.

Those allegations include acquiring a database of United Global Capital client files in mid-2024 from a now-banned former adviser for UGC, then setting the RiverX boiler room on to the job of contacting them and bringing them over – despite the fact many had most of their retirement savings locked up in the collapse of First Guardian.

Berry told The Australian that it was former UGC clients who approached RiverX – but UGC was so concerned about the issue it complained to the Office of the Australian Information Commissioner over the alleged client privacy breach.

Then there are the latest allegations, again denied by Berry, that RiverX approached multiple fund managers offering to swap its retail investors into wholesale funds in exchange for leads on potential new clients for the firm.

None of this is anything to do with Hu, even if the allegations are true.

But they’re probably not something you’d want hanging around when you’re trying to set up your own shop.

Ding confirmed on Friday that the pair were working out of RiverX’s offices, and under the advisory firm’s licence “while transitioning to our own premises and licence”, but didn’t respond to a question about whether they were concerned about the ASIC investigations.

It’s all probably a major fillip for Berry and RiverX – even if everyone was staying quiet about it until Margin Call started asking questions.

Whatever Berry is charging Hu and his colleagues for use of the RiverX licence, you can bet it’s going to be a nice little earner.

Former Morgan Stanley Wealth Management adviser Cathy Ding. Picture: John Feder

Hu’s exit will also have put a nasty little dent in Morgan Stanley’s revenue line, on top of a few other recent departures from the wealth-management business. But they can hardly say they weren’t warned.

Hu is notoriously media shy, but did give an interview in March to Barron’s – which puts together the annual Australian list of top advisers in association with The Australian.

In it, he noted how “sticky” his Chinese client base had been, given he was offering not just options where to put their spare cash but a range of other services – starting with help to get an Australian visa on the back of their investments.

“We try to build up a multi-family office type of service because they’re new immigrants. We build up a sort of team of tax accountants for estate planning, philanthropy, education, commercial property, or luxury real estate property,” he said.

“We are the centre of the influence of the trusted people for our clients. When clients need any sort of value add, we will refer our clients to these people. This will make the relationship very sticky.”

We’re guessing Morgan Stanley is currently finding out exactly how “sticky” those relationships are …