Morgan Stanley, Wells Fargo Lose Teams to Independent Firms
A team of four brokers on Long Island who had been managing about $260 million of assets within the private client brokerage network of Wells Fargo Advisors bolted last week to join an independent registered investment advisor, while a Morgan Stanley broker and a J.P. Morgan Securities broker on the West Coast managing about $100 million and $90 million, respectively, made similar moves to another RIA.
The East Coast brokers—cousins Ian and Jonathan Millman, Mario Veneroso and Alan Yakuboff—opened a new office with a client associate in Woodbury, New York on Friday affiliated with Kingsview Asset Management. Kingsview, a nine-year-old RIA founded by commodities trader Josh Lewis in 2008, supports about 40 advisors managing some $800 million of client assets, according to its most recent ADV filing with regulators.
Its recruiters have been cold-calling wirehouse brokers on the East and West Coasts with a deal that includes a 60% payout, potential equity as the RIA shifts to a tax-advantaged corporate structure and operational and transitional support that includes building new quarters, rent support and access to four broker-dealers for customer trades and custody, several brokers said.
“The politics and red tape are increasing, and we never considered another wirehouse,” said Ian Millman, criticizing the bureaucracy and compliance strictures of all big firms, and issues with Wells Fargo’s account scandals, in particular. “We went to Wells in 2012 for the brand name and we left, in part, to escape the brand name.”
A spokeswoman at Wells Fargo Advisors, which last week reorganized its sales force leadership and reported a net loss of more than 900 brokers over the previous two years, declined to comment on the remarks of Millman, who had worked in the firm’s Garden City office.
The Millmans, who are 44, and Veneroso, 33, joined Wells in 2012 from Merrill Lynch. Yakuboff, 63, who began his brokerage career with Shearson Lehman in 1981, had been with Wells for eight years. Ian Millman said the group looked at many full independent broker-dealers where the payout would have been higher, but gravitated to the operational support and business support products Kingsview was offering (including Orion financial planning software that he claims is an upgrade from Wells’ Envision planning product).
In California, Cypress Wealth Services, LLC, said it recruited Morgan Stanley broker Greg Frech to its home office in Palm Desert—its 15th advisor, and the fourth to join its headquarters in the past nine months. Cypress last week also added J.P. Morgan Securities broker Brad Arave, who opened a new branch for the RIA in Tustin, Calif.
Cypress was managing $552.7 million of assets in just under 1,160 customer accounts, according to its most recent ADV filing.
“I was looking for the ability to provide conflict-free advice to my clients without having to pursue specific agendas,” Frech said in a brief interview, noting Morgan Stanley’s “hard-core push to sell banking and lending services” when he wanted to remain focused on providing investment advice.”
Morgan Stanley’s investment platform and products are substantial and nothing in particular prompted his move, he said. But he also looks forward to being able to offer products from Dimensional Fund Advisors, a low-cost index manager favored by many RIAs but is not carried on large firms’ platforms that require “shelf-space” fees.
A Morgan Stanley spokeswoman confirmed Frech’s exit, but declined further comment.
Thomas Caffery, Frech’s teammate who has spent his entire 35-year career with Morgan Stanley and its Dean witter predecessor, remains at the wirehouse.
“I started here and I’m finishing here,” he said, adding that he was surprised by Frech’s departure. “I’m very happy.”
Frech began his brokerage career at WMA Securities in late 1997 and jumped to Merrill in indian Wells, Calif. in July 1998. He affiliated with Morgan Stanley in Pal Desert six months later, according to his BrokerCheck record.
Arave, a certified financial planner who opened Cypress’s first Orange County (Tustin) office last week, began his brokerage career at Merrill Lynch in 2008, and has been a bank-based broker with Chase Investment Services and successor J.P. Morgan Securities since May 2011, according to his BrokerCheck history.