$3.7-Million Wells Fargo Bank Team Joins LPL’s ‘Wirehouse’ Channel
LPL Financial has landed a $3.7-million duo from Wells Fargo Advisors in Red Bank, NJ, the third team to join a new affiliation model LPL has opened for brokers used to an employee rather than independent contractor culture.
Anthony “Tony” Frigoletto and his junior partner Jayeeta Choudhury left Wells on Tuesday to launch their new firm, River’s Edge Wealth Partners, within LPL’s Strategic Wealth Services (SWS) model. Frigoletto’s six-person team, which includes his wife, Nicole Adler-Frigoletto, a financial planner, managed $500 million in client assets at Wells, he said.
He also considered affiliating with Commonwealth Financial and Raymond James’ independent channel, but believes the new LPL unit offered the most efficiency in terms of payout and pricing of regulatory and other services.
“The industry has changed, and what you do for clients goes beyond investments to offer them,” Frigoletto said. “Wells Fargo Advisors had its limitations around operating more in a family office-like offering.”
A spokeswoman for Wells declined to comment.
LPL is targeting the new SWS model at wirehouse and other employee brokers managing about $200 million or more of client assets. It offers payouts of 60% to 80% of annual revenue, depending on the level of support brokers choose.
Frigoletto said he could have commanded a higher payout if he had joined LPL’s traditional platform but would have absorbed higher service fees and received less compliance and other support. He will earn more than the approximately 50% payout he says he received as a Wells employee, and avoid “handcuffs” of the full employee model, such as deferred compensation, he said.
LPL, the largest independent broker-dealer with almost 17,000 brokers, has been developing several new channels to tap into a broader hiring pool. In August, it launched its first pure employee-broker channel, as opposed to using only independent contractors. Dubbed the “independent employee advisor” model, it offers grid-based payouts of between 50% to 70%, according to LPL.
The average LPL broker generated $226,000 in annualized fees and commissions in the second quarter, lower than the average production figures of over $1 million at wirehouses such as Morgan Stanley Wealth Management and UBS Wealth Management USA.
Wells Fargo supplemented its multi-channel broker model with a registered investment advisor custody unit partnership with TradePMR in January 2019, and has attracted about 13 teams who joined from other parts of the bank.
Frigoletto said that becoming a fee-only RIA would disadvantage some clients with buy-and-hold accounts who are better served under a commission structure.
The two smaller teams that joined LPL’s SWS unit since it was unveiled also had been affiliated with Wells Fargo. The $300 million-asset team of Mike Ashworth, Steve Collie and Katheryn Gordon in Tryon, NC, moved in April. A second Wells team led by Brian Lynn, John Fessler and James Pacheco, who were managing $305 million for Wells clients in Marlton, NJ, made the shift in May.
LPL last week attracted another broker to its growing Gladstone Wealth Partners affiliate in New Jersey, also recruiting from Wells Fargo. Joe Baylouny, who had worked at various Wells branches in and around Philadelphia for 17 years of his 21-year career, joined Gladstone’s Mt. Laurel office on September 3. He was producing about $600,000 on $110 million of client assets, according to Gladstone.
Gladstone, which hired two UBS teams in New Jersey in May, is a broker-RIA hybrid that earlier this year merged into Financial Resources Group, an LPL unit servicing banks and credit unions. The firm last month hired Fort Mill, SC, advisor Owen Pardo, who had beenn with Wells Fargo Advisors and predecessor A.G. Edwards for almost 17 years of his 37-year career. Pardo produced $400,000 on $85 million of assets in his previous 12 months with Wells, according to Gladstone.
Stifel Financial also reached into Wells’ traditional private client group channel in recent weeks to recruit a team near its home base near St. Louis. Rita Mahn, who had been with Wells and predecessor firm A.G. Edwards for more than 22 years of her 27-year brokerage career, moved with associate Kyle Gowen to open a Stifel, Nicolaus office in Festus, MO, 35 miles south of St. Louis. They generated a little more than $1 million on just over $150 million of client assets, according to Mahn.
“We just didn’t want to be owned by a big bank anymore, and felt that Stifel was a good fit for our client and community needs,” she said.
Stifel, which in 2007 acquired New Jersey-based regional firm Ryan Beck & Co., two weeks ago hired a four-advisor team from Merrill Lynch in Mount Laurel, NJ, who were working with about $280 million of client assets to open an office in nearby Audubon, NJ, a Stifel spokesman confirmed.
It includes 33-year veteran broker Richard Bonnette, his sons Eric and Breton, and Edward Ellis. The group, which also includes the wives of Erc and Breton, worked with about $280 million of client assets at Merrill, according to a Stifel spokesman.
“Our entire team has resigned from Merrill,” Richard Bonnette says on a video on their new website. “You can continue to deal with the people you know and trust, and who know you..and, by the way, Stifel will be picking up the transfer fees.”
The Bonnettes did not return requests for comment.