Merrill and Morgan Stanley Part Ways with Midwestern Brokers
Wirehouses are working hard to retain experienced brokers at a time when they have reined in their recruiting but it’s not stopping them from booting out advisors who they believe have crossed compliance lines.
Merrill Lynch on Friday showed the door to Jason R. Hostetler, a Canton, Ohio broker who spent his entire 13-year brokerage career at the firm, according to sources familiar with his departure. Reached on a personal phone, the advisor declined to discuss the reason behind his abrupt departure.
A Merrill spokesman confirmed Hostetler’s departure but declined to comment on the circumstances.
In Grand Rapids, Michigan, in late March, Morgan Stanley terminated Alan Supp, a senior vice president with a specialty in “institutional” fixed income. The 22-year brokerage veteran in January got the plum assignment of addressing the Michigan Association of County Treasurers at its winter conference at a ski resort, but he made the presentation—titled “Pump Up the Returns: What Can a Treasurer Do Beyond CDs and Cash Accounts”—without approval from the firm, according to two people briefed on his departure.
Supp, who had been with Morgan Stanley for more than four years, had sought permission for the speech but, frustrated with a lack of response from compliance, went ahead with the presentation, said one of the sources.
Karen Coffman, the treasurer of Jackson County, Michigan, and a moderator for Supp’s presentation, said the talk was a standard presentation that members of her state group regularly receive. “There was nothing out of the ordinary,” she said.
Another source close to Morgan Stanley said there were additional issues that appear to have affected Supp’s departure, but declined to elaborate.
Reached at his personal phone number, Supp declined to comment other than to say that he is consulting with lawyers. A Morgan Stanley spokesman also declined to comment.
Neither Supp nor Hostetler’s U-5 termination notices have been filed with regulators to date, according to their BrokerCheck records.
Hostetler’s Merrill website had listed him as “senior financial advisor” with the five-person, two-broker PHH Wealth Management group. His name and photograph have been removed from the website. Kirk M. Hunter, a 20-year Merrill lifer and Hostetler’s partner on the team, referred requests for comment to his office’s compliance officer and to complex manager Edward Luecke. Neither returned calls for comment.
Hostetler is at least the second allegedly big producer to have departed the Canton office in the past six months. Veteran Merrill broker Richard Croasdaile and his daughter left the firm in September to join Morgan Stanley, citing issues related to transitioning of his book.
The dismissals continue a theme of brokerage firms sharpening their compliance oversight knives at a time when regulators are increasing their own scrutiny of sales, supervisory and disclosure issues.
Firms that were once inclined to give a pass to productive and/or long-serving advisors for even minor violations have also become much more sensitive to personal issues that could create reputational damage, according to brokers, lawyers and headhunters.
The only mark on Hostetler’s current BrokerCheck report reflected a 2001 impaired driving conviction. The adviser at Merrill Lynch in January 2005, according to BrokerCheck.
Supp, who began his career at the former McDonald & Co. Securities in 1996 and also has worked at RBC Dain Rauscher and, for a decade, at UBS Financial Services has a single mark on his record. It was a 16-year-old complaint from a customer seeking $9,100 that was denied, according to his BrokerCheck record.