From the January 2013 issue of Research Magazine • Subscribe!

Wirehouses, Others Actively Attract Reps

In the final months of 2012, the wirehouse firms continued to recruit advisors from each other and from other broker-dealers. At the same time, some national and independent firms shared news about their recruiting success stories.

Wells Fargo, for instance, said in mid-November that it had recruited 24 advisors with $2.2 billion in assets this fall for its traditional Private Client Group channel; the new reps came from Merrill Lynch, Morgan Stanley, UBS and several other firms. Its independent-advisor channel, FiNet, said it added seven advisors with about $1.3 billion in assets in November.

One group coming on board Wells Fargo’s employee advisor channel over the past few months is the ESH Group, which includes Robert Evans, Walt Shinault and Richard Hastings in Oxford, Miss. They joined from Bank of America-Merrill Lynch. The team has a total of 76 years of industry experience and prior client assets of $250 million.

The independent-advisor channel of Wells Fargo picked up the KBT Group in Westlake Village, Calif., comprised of financial advisors Michael Kazmer, Larry Bernstein and Abby Dinkins. The team joined FiNET from Merrill Lynch with about $620 million in assets.

Morgan Stanley said one of its recent recruits was Bryan Schon in Bloomfield Hills, Mich., formerly with Chase Investment Services. The advisor has produced close to $1.5 million in yearly fees and commissions and has managed about $205 million in client assets.

Bank of America-Merrill Lynch said it added a team led by former-Morgan Stanley advisor Rebecca Rothstein to its Private Banking and Investments Group office in Beverly Hills, Calif. The team includes five advisors and six other staff members. It manages about $2.5 billion in client assets.

Raymond James also recruited an ex-Morgan Stanley broker over the past few weeks: John N. Dorsey, who previously managed about $215 million in client assets and had more than $800,000 in yearly fees and commissions. He is now a senior vice president of investments and branch manager of a new Huntington, W.Va.-based branch office of Raymond James & Associates, the traditional employee broker-dealer..

Two weeks before this announcement, Raymond James said it recruited a Morgan Stanley team with about $80 million in assets and $1 million in yearly fees & commissions in Scottsdale, Ariz., to join RJA.

Barclays’ Boost

Barclays said it recruited 18 new advisors over the past few weeks from Merrill Lynch, Morgan Stanley, UBS, Credit Suisse, JPMorgan Chase and SunTrust. The advisors now work in eight Barclays offices across the country.

They have a total of nearly $40 million in yearly production and $9.4 billion in assets under management. Thus, the reps each have an average of $2.2 million in yearly production and $522 million in average client assets under management.

“We are pleased to welcome these talented advisors to Barclays,” said Mitch Cox, head of Wealth Management-Americas for Barclays, in a statement. “These hires underscore our commitment to attracting top-performing professionals who seek Barclays’ unique, in-depth approach, of guiding clients to customized solutions that extend far beyond their investment portfolio.”

Barclays has some 250 advisors in the United States and $287 billion in client assets worldwide in its Wealth and Investment Management division.

LPL Momentum

Meanwhile, LPL Financial-affiliated Legacy Wealth Planning recruited a team led by former-Wells Fargo advisor Mark Elston, which manages about $185 million in assets. The team has managed more than $185 million in assets for about 1,100 clients in the Reno-Sparks area of Nevada.

Level Four Group, based in Plano, Texas, recently affiliated with LPL Financial to take advantage of LPL’s broker-dealer and RIA platforms. Level Four, which was previously affiliated with Lincoln Financial, has close to $1 billion in client assets and includes about 50 licensed independent financial advisors, about half of whom are accountants with Series 7 or 66 licenses. Its four retail offices are in the Dallas-Fort Worth area; Austin, Texas; and Irvine, Calif.

“We had a wonderful, close relationship with Lincoln Financial,” said Jake Tomes, CEO of Level Four, in an interview. The decision to move to LPL’s hybrid platform, he says, stemmed from the group’s “desire to grow and attract the most talented investment advisors in the industry.”

The group was formed to help CPAs and CPA firms add wealth management as a core strategy, according to Tomes. “Today’s landscape is changing, and advisors are acting more as fiduciaries for clients,” Tomes explained. “As this shift continues, advisors need to position themselves more for fee-for-service and fee-for-advice business. We want to capitalize in this trend.”

“We are really excited that Level Four is aligning with LPL Financial,” said Bill Morrissey, executive vice president of business development at LPL Financial, in an interview.

“This is a large talented group of advisors that provides sophisticated wealth management services to clients and fits well with our hybrid platform,” Morrissey explained. “They do transaction- and fee-based work in a single sweep and take advantage of our practice management support.”

LPL Financial also recently recruited a team with $650 million in assets formerly with SII Investments, part of National Planning Holdings, a network of independent broker-dealers affiliated with Jackson National Life.

Credit-Union Push

MACRO Consulting Group, based in Parsippany, N.J., includes five financial advisors and is led by Mark Cortazzo. The wealth-management team has its own asset-management program which includes wrap portfolios based on ETFs.

In related news, LPL Financial added Alliant Credit Union to its institutions-services platform. Based in Chicago, Alliant Credit Union is the sixth-largest U.S. credit union with $8.2 billion in assets.

“LPL Financial is an industry leader in helping banks and credit unions expand their capabilities, discover new avenues for revenue growth and become more profitable. We are especially pleased to offer our services to so prominent and well-established an institution as Alliant Credit Union,” said Andy Kalbaugh, managing director at LPL Financial Institution Services, in a press release.

In total, LPL Financial, which is led by Mark Casady says it serves over 685 banks and credit unions with brokerage, trust and wealth management services. (The unit provides third-party brokerage, wealth management and trust services to investment programs of banks and credit unions.)

“We also believe that our new partnership with Alliant reflects a larger industry trend, as we have increasingly seen a migration of credit unions toward service providers whose more robust capabilities can translate into more opportunities for growth,” Kalbaugh explained.

Alliant Credit Union has 270,000-plus members that access its services online and in 14 branches across the country. Founded in 1935 to serve United Airlines employees, the organization now has an investment program that includes nine financial advisors. •

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