Merrill Teams in Texas, Ohio and Georgia Shift to Competitors
The winds blew cold over the long weekend at Merrill Lynch offices in Atlanta, Ohio, and Texas.
Morgan Stanley landed two teams—11-year Merrill veteran James Sophia, Jr., and his junior adviser Rachel Jose in Pepper Pike, Ohio, branch and 21-year Merrill adviser Hyunwoo “Preston” Cho in Atlanta on Friday.
One day earlier, Matt ‘Toby’ Ardoyno and Toni Rose, who were overseeing about $1.05 billion of assets for Merrill clients, joined Stifel Financial to open a Stifel, Nicolaus branch in Fort Worth. Ardoyno, 45, had spent his entire 19-year brokerage career with Merrill.
The departures paralleled the exit of two large Merrill teams in Atlanta on Friday to Greg Fleming’s Rockefeller Capital.
Stifel’s Ardoyno, whose team was producing about $4.6 million of compensable revenue, according to a source, said he was frustrated by growing bureaucracy at Merrill under its Bank of America ownership, persistent pressure to sell banking products and the firm’s new “growth grid” that requires advisors and teams to hit new-household account and asset-growth targets to qualify for higher payouts and avoid payout penalties.
“I’m a financial advisor, and I manage high net-worth money,” Ardoyno said. “I don’t want to hand out toasters.”
A Merrill spokeswoman did not immediately respond to requests for comment on the departures or on comments from the departing advisors. The exits came days after Merrill executives lauded their success in incentivizing household account growth among its almost 15,000 brokers and its near-record low attrition rate.
Ardoyno said he and Rose, 35, who began her brokerage career at USAA Financial Advisors in 2007 and joined him at Merrill in 2014, expect to enjoy fewer restrictions on their practices at Stifel, get paid for 100% of their production, and respected their new firm’s stock research. He also knew Robert Johnson, the former head of Merrill Private Banking and Investment Group’s southwest region, who moved to St. Louis-based Stifel last year to build its southwestern profile.
In Ohio, Sophia was similarly frustrated by compensation policies at Merrill that were cutting into his payout and by the bank-product push, said a person familiar with his concerns.
Though he joined another wirehouse that also has been promoting loans and regularly changes its compensation incentives, he believes that Morgan Stanley’s strong reliance on wealth management—which fueled 48% of its fourth-quarter revenue compared with about 22% at Bank of America—makes it more conducive to his practice, the source said.
Sophia also knew Merrill’s former Northeast Ohio manager Jon Lawrence, who joined Morgan Stanley’s Pepper Pike branch as a producer in 2016.
The Sophia team was managing about $125 million of customer assets. Details of Cho’s practice in Atlanta could not be determined.
A Morgan Stanley spokeswoman confirmed the arrivals of Sophia, Jose and Cho, but declined to comment on their specific practices.
Merrill Lynch remains a member of the Protocol for Broker Recruiting, which permits advisors to take some client-contact information with them if they join another signatory to the pact. Morgan Stanley dropped out of the Protocol in 2017.