Another Merrill New York Team Walks, This One to Janney
A three-member Merrill Lynch team bolted Monday to join a duo of veteran brokers at Janney Montgomery Scott, continuing a steady trickle out of Merrill’s home base in New York City.
Advisors Noah Doyle, Charles Princiotto and Sean Martin, who were based at a midtown Manhattan Merrill office on Lexington Avenue, set up shop downtown with Stanley Hochhauser and his longtime partner, Alice Coraggio, who have been with Janney since 2001. The combined team, which is dubbing itself Battery Park Financial Partners, will be overseen by Doyle.
The move is a succession play for Hochhauser, a 51-year veteran of the brokerage industry who began his career in 1965 with Shearson, Hammill & Co., and an opportunity to add some financial planning expertise, said Jerry Lombard, president of Philadelphia-based Janney’s private client group of 770 brokers.
Lombard, who said the teams have been discussing the arrangement for about half a year, declined to discuss recruiting and succession packages or other aspects of compensation.
The Merrill brokers were managing about $150 million of client assets, while Hochhauser and Coraggio oversee about $200 million, Janney said.
Following its promotion of Washington, DC complex manager Jeff Smith last May to run recruiting, Janney ended 2016 with its most successful hiring year since 2009, when scores of advisors fled mortgage securities-scarred banks for for smaller firms, according to Lombard.
It recruited 46 advisors in 2016 with average production of around $700,000 and average client assets under management of $100 million, he said.
Recruitment packages have been tightening at Merrill Lynch, Morgan Stanley and UBS Financial Services, helping regional firms such as Janney narrow the gap with their larger national rivals.In October, Janney hired its biggest new team by production in three years from Merrill.
Some of the pressure on hiring bonuses at the big firm has come from the Department of Labor, which has said that its forthcoming fiduciary rule prohibits so-called back-end bonuses to brokers who hit certain retirement account production and account-transfer targets in future years. Top brokers who in recent years could expect multi-million-dollar bonuses as high as 350% of the revenue they generated in the previous 12 months if they hit their targets, are now seeing deals that are topping off at closer to 250%, according to outside recruiters.
Large brokerage firm executives who chafed against the big recruiting deals that they said were hard to ever recover had quietly welcomed the DOL rule constraints, which are meant to constrict conflicts of interest between brokers and customers. Now that the rule has been postponed by the Trump administration and may be potentially eliminated, it is unclear if the big firms will resume their expensive packages.
Merrill executives have said that they plan to stick with a DOL rule-influenced policy of ending commission-based retirement accounts, something that has motivated a spur of recent departures to less restrictive firms. The DOL rule would permit retirement commission accounts that could tilt brokers to sell more expensive retirement products if brokers sign contracts promising to act in their customers’ best interests. Merrill and other firms are concerned over legal liability such contracts could create.
The Merrill no-commission policy was slated to take effect April 10 but executives have told brokers it could be delayed pending outcome of the Trump administration’s new deliberations on the fiduciary rule. Two Merrill veterans, nevertheless, left last week for Morgan Stanley, which has said it will permit commission-based retirement accounts offered under the best-interest contracts.