Indie Firm with Northwestern Mutual Roots Eyes Wirehouses
(Updates throughout with additional information, corrects the date that Mara joined Northwestern and the number of advisers at Bleakley originally with Northwestern Mutual.)
Bleakley Financial Group, a young New Jersey independent advisory firm managing some $4.5 billion of customer assets from seven locations, opened its first Boston office two weeks ago with a two-person team overseeing some $200 million.
Like most of their 29 Bleakley colleagues, John R. Mara and Shaun Feldeisen had spent their entire careers as wealth managers affiliated with Northwestern Mutual Investment Services, the insurance giant’s broker-dealer.
“Making a change of this magnitude was not a decision we made lightly,” Mara, who joined Northwestern in 1998, said in a prepared statement. “Ultimately, we had to step back and really evaluate the service offering we were able to provide and compare that against our goal of being the best advisors possible.”
He did not return several requests for comment but Bleakley co-founder and principal, Andy Schwartz, said that large firms can’t help but push certain proprietary products and in-house services.
“Northwestern is a great company but its business model is an insurance company, with all that entails,” said Schwartz, who led a 45-employee, 25-advisor team that broke away from the company in December 2014. Schwartz, who had been with the insurer since the start of his brokerage career in 1985, said he was its broker-dealer’s biggest producer at the time, and his practice—then known as Bleakley, Schwartz, Cooney and Finney—was its top producing district office.
The insurance company, whose broker-dealer is not a member of the Protocol for Broker Recruiting that smoothes departing brokers’ ability to call former clients, declined to comment beyond confirming the departures, a spokeswoman said.
Bleakley, primarily a fee-based financial planning firm that does a small commission brokerage business through LPL Financial, is hoping to expand from its Northwestern roots.
“We’re talking to wirehouse guys, who are always under pressure because they are employees,” said Schwartz, adding that he has not to date signed up a big-firm emigrant. “The biggest reason they want to move is to find a culture where they can best represent their clients and get much greater payouts.”
Bleakley, whose payouts range from 80-92% of revenue produced, is not offering upfront money to ease transitions. “LPL will offer some, but it’s really de minimis,” he said.
LPL, to be sure, recently began providing brokers who join from selected direct rivals upfront forgivable loans as high as 50 basis points on assets they are managing if they use its corporate registered investment adviser. Bleakley, whose namesake adviser Garrett Bleakley is a longtime Northwestern agent who did not move with Schwartz and his three partners (including his twin brother), uses Private Advisor Group as its RIA for regulatory filing purposes. PAG is an LPL “hybrid” firm and one of the independent broker-dealer’s largest Offices of Supervisory Jurisdiction.
The lure of moving to a small independent firm with Bleakley’s resources is the support team of easily accessible analysts and planners that it has mobilized, Schwartz asserted, along with the “plug-in” platform support and low trading fees from custodians that many competitors market to prospective advisers. Customers of Bleakley’s advisers keep their assets with, and have trades executed through, Charles Schwab Corp., Bank of New York’s Pershing, TD Ameritrade, Fidelity Investments and LPL.
Last year Bleakley hired Peter Boockvar, a CNBC commentator who briefly worked with former Bush White House economic adviser Lawrence Lindsey, as its chief investment officer after a career as an analyst at Miller Tabak & Co. Boockvar also manages a fund through the firm.
Two members of his team are among the ten advisers Bleakley has attracted in the last 20 months. Three of those came from Northwestern, and the remainder from other independent broker-dealers.
Separately, LPL said on Monday that Beacon Wealth Management, a New Jersey certified public accounting firm affiliate with about $150 million of client brokerage and advisory assets, has partnered with Wealthcare Advisory Partners LLC, another of its OSJs. The firm had previously worked with 1st Global, which specializes in helping accounting firms with wealth management services.