A group of top executives from Lockwood Advisors, the leading SMA platform provider that is a subsidiary of BNY Mellon and an affiliate of Pershing LLC, have broken away to form a new company, called Palladiem Partners, that will be led by Lockwood co-founder and former CIO Donald Robinson as CEO.
To be based in Radnor, Pa., by dint of its leadership alone the new company will be a force to be reckoned with in the separately managed account arena, and the defection may well be a blow to Pershing, which is the leading clearing firm for independent broker-dealers and a custodian to many high-end RIAs. Lockwood is a key component of Pershing’s Managed Account Solutions (MAS) service; Bank of New York acquired Lockwood in 2002, a year prior to the acquisition of Pershing by Bank of New York
Through a spokesman, Pershing declined to comment on the launch of the new firm.
In addition to Robinson, other ex-Lockwood executives joining Palladiem include:
- David Feldman, formerly director of investments at Lockwood, who will serve as president and co-chief investment officer of Palladiem;
- Joseph Scavetti, former director of trading, operations and risk management, who will serve as COO of Palladiem;
- Stephanie Mackara, former director of product development and strategic initiatives, who will serve as chief marketing officer at Palladiem.
Also joining the firm as managing director and CFO is David Gibson, former CFO of The Wilmington Trust Co.
In a statement, Robinson said the intent of “establishing ourselves as an independent firm that is nimble and takes an active approach to total risk management will differentiate us in the marketplace and best position us to serve our clients with the type of independent, best-in-class conflict-free advice they seek from their partners.”
In an interview with AdvisorOne on Tuesday, Robinson acknowledged the trove of human capital that has moved from Lockwood to Palladiem, but said “we’re not bringing assets over directly” from the Lockwood platform, though he said there had already been much interest in Palladiem from the industry. “There are people calling us from all walks of life,” he said, such as “from the wirehouses and banks.” Moreover, “we’re not
affiliated with any large financial intermediary,” which gives Palladiem the “ability to be nimble, quick and decisive.”
That will give Palladiem, Robinson said, to “focus on what we do best—the investment component,” which will take place through two levels of distribution: the financial advisor intermediary, and to act as subadvisors to some institutions, such as smaller banks or even investment management firms that want to take advantage of Palladiem’s expertise.
Robinson says that what will help set Palladiem apart will be a focus on risk management. “People might compare us to TAMPs,” he said, but while there are many companies that “manufacture product, our expertise is in portfolio management” that will be delivered through seven strategies.
Five of those strategies will be squarely in the Lockwood legacy, Robinson says, “conservative and contrarian,” but two newer strategies will focus on an income strategy, saying “we know how to manage systematic distribution.” The seventh and final strategy will be more of a go-anywhere strategy, though Robinson says he doesn’t like the term, characterizing the approach as “taking some of the risk guardrails down,” and focusing on return of capital.
Who are the advisors that will find a home at Palladiem? Robinson says that it’s the same kind of advisor—whether at a wirehouse, independent BD or RIA firm—that Lockwood traditionally attracted, who knows “they can’t be everything to everybody” but who wants to “centralize the money management process.”
The way that Lockwood had the most success in the past, says Stephanie Mackara, chief marketing officer, is how Palladiem will proceed in the future. “Advisor to advisor, explaining what we do and what our legacy is,” she said. That process will include two market web seminars that will be followed by regular such seminars every other week to “build relationships with new and existing advisors.”
Part of the legacy, Robinson says, is to distribute its investment management strategies through various BD and custodial platforms to “pure RIAs, hybrid RIAs, and financial advisors whether it’s LPL, Merrill Lynch or Envestnet. Where it happens doesn’t matter to us.”
(Wondering about the derivation of ‘Palladiem’? “Coming up with the name” joked Mackara during the interview, “was harder than coming up with a business plan,” before explaining it refers to the style created by Venetian Rennaisance architect Palladio and the Latin word for “day,” giving rise to the company’s tagline: Wealth Architects for Today’s Market.)