A team of three San Diego-based advisors with about $300 million of assets and $2 million in yearly fees and commissions left Morgan Stanley (MS) on Friday to affiliate with independent broker-dealer LPL Financial (LPLA) using a hybrid model, LPL said Monday.
The former-Morgan Stanley Smith Barney team includes Neil McNeil, Robert Meyer and Ryan Clive-Smith, who previously did business as the La Jolla Group (named for the suburb where they are located). The group, considered to be one of the largest in the greater San Diego area based on assets under management, is now operating as Ibis Capital, an independent wealth-management firm, which plans to retain about 80 client relationships with current and retired middle-market business owners.
"We’ve been thinking about establishing our own firm since ’06-’07," when the group was a Smith Barney team, said McNeil (left), the group’s chief investment officer, in an interview with AdvisorOne.
One catalyst for the move, he says, was Morgan Stanley’s purchase of Smith Barney. And the second was the financial crisis of ’08. “Firms like LPL, Fidelity and other came to the forefront when it comes to putting clients first, which is where we felt more comfortable,” McNeil explained.
Ibis Capital is partnering with Stratos Wealth Partners, which serves as the team's RIA and is a national network of reps affiliated with LPL. The group has also chosen Fidelity Institutional as its custodian.
The team initially wanted to go fully independent, but then decided working with a broker-dealer and an RIA “offered the best of both worlds,” in terms of the tools available for both investing and financial planning, the advisor says.
"We find this [new structure] changes the dynamic of relations with our clients. We can speak at their level as business owners, and they have a true understanding of what we want to accomplish and that we operate are at same level with them -- autonomously," McNeil said.
In addition, the open architecture, fee-based structure, performance reporting and retirement-planning options available to the team are now greatly enhanced, McNeil shares.
The group can now “draw upon a broader scope of tools and software from the ‘best in class’ providers and is no longer tied to proprietary software,” according to Meyer, director of strategic and financial planning, in a statement. “Our clients demand sophisticated and high-end planning solutions and we are now able to offer that,” he explained in a statement.
“Our new venture represents a deeply personal opportunity for us to shape our own culture and to establish a higher standard of service and performance within our industry,” shared Clive-Smith, director of business development, in a press release.
Industry experts, like executive-search consultant Mark Elzweig (right), say this is "a trailblazing deal."
"Here we have a team of high-end wirehouse advisors establishing their new firm within a multi-custodial framework," explained Elzweig (right), in an interview. "Many RIAs and independent firms pride themselves on their multi-custodial capabilities. This enables them to offer advice to clients with a truly objective, 'best of breed' approach."
According to Elzweig, there should be more high-end teams opt for this model in the future. "We probably just at the beginning of the curve now," he added.