Whale Tales Of The First Quarter: Leading Advisors Change Firms
By Cyril Tuohy
It’s been a busy first quarter for some of the nation’s financial advisors as small advisory shops leave one broker/dealer for another in search of better client service or more support to sustain their growth, but the final day of the quarter delivered the biggest whopper of them all.
That was when Wells Fargo Advisors Financial Network announced March 31 that it had landed one hell of an account operating out of Birmingham, Mich.: Jeffrey M. Fratarcangeli and his $424 million in assets under management (AUM).
“Our supported model of independence helped draw Fratarcangeli, the largest individual financial advisor in terms of AUM to choose us,” Kent Christian, president of Wells Fargo Advisors Financial Network, said in a statement.
Reeling in Fratarcangeli was the big catch. Fratarcangeli, with offices in New York and Florida, was in the top 1 percent of all advisors for 12 years running at his former broker/dealer Merrill Lynch, Wells Fargo said.
A perennial “top 40 under 40” standout, the industry is curious to see how his independent practice thrives under the Wells Fargo Advisors Financial network umbrella.
The financial services industry refers to big-money types as whales – as in “the London Whale,” the JPMorgan Chase trader who lost $6 billion dollars two years ago on credit default swaps, and almost cost chief executive officer Jamie Dimon his job.
For an independent financial advisor, $424 million in AUM is a big number, even if the new wirehouse affiliations they join are measured in the tens of billions of dollars or trillions of dollars in assets under management.
The other major “get” in the first quarter went to Raymond James, which added the independent advisory firm Winter Park Wealth Group headed by Ben Weiner, Michael James Hlavek, Lawrence Marsh III and Daniel Iosue, according to media reports.
Winter Park Wealth Group, located near Orlando, Fla., manages more than $550 million in assets under management. Winter Park Wealth Group was previously with Morgan Stanley.
LPL Financial, which recently settled fines with the Financial Industry Regulatory Authority (FINRA) over compliance issues, upgraded its computer systems.
The improvements appear to have benefited the company, which competes for bragging rights with Bank of America’s global wealth and investment management unit (Merrill Lynch), Wells Fargo Advisors and Morgan Stanley Wealth Management.
In the first three months alone, LPL brought on three advisory practices representing more than $500 million in assets under management.
January saw Brookfield, Wis.-based Granite Financial Group join LPL, from Morgan Stanley Wealth Management. Granite, dubbed an “award-winning wirehouse breakaway team,” brings more than $130 million of client advisor and brokerage assets to LPL, a top-five broker dealer measured by the number of advisors.
Veteran financial advisors Ellen M. Duhamel and Thomas J. Dornoff, both Certified Financial Advisors, lead Granite Financial.
Dornoff and Duhamel said the move to LPL “will give us the freedom to provide the unbiased financial advice that we believe is in the best interests of our clients and to do so at a lower cost structure than we have been able to do until now.”
On Feb. 3, LPL announced that Minnetonka, Minn.-based 360 Financial, an advisory shop with $150 million in brokerage and fee-based accounts, and $120 million in retirement planning assets, had come aboard.
Later that month, Matawan, N.J.-based Atlas Private Wealth Advisors, with $125 million in brokerage and fee-based client assets, also joined LPL. Atlas is the new name for a team of five professionals led by veteran financial advisors Vladislav Krubich and Tony Mayo, LPL said.
Krubich and Mayo said LPL’s “product-agnostic” orientation and LPL’s support of a “truly independent advisory model,” will help Atlas better serve its core client base of mass-affluent baby boomers. Atlas’ fee-based services are offered through the independent registered investment advisor Flagship Harbor Advisors.
LPL has more than 13,000 financial advisors on its platform.
Advisors, who routinely jump from one network to another, leave large wirehouses for independent broker/dealer platforms. The independents offer more flexibility, and some advisors also see independence as a way to improve service to clients and collect more profit.
Wirehouses, on the other hand, offer a robust national network and infrastructure. Small advisory practices with three to four advisors, for example, can “scale up” easily since wirehouses offer many administrative and record-keeping functions, in addition to their recognizable brands.
In January, advisors Michael Cott and Donald Nejedly joined Morgan Stanley Wealth Management from RBC Wealth Management, bringing with them $250 million in assets under management, according to media reports.
J. Patrick Kearns, an advisor with $185 million in assets under management, also joined Morgan Stanley in January from Fulcrum Securities.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
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