Waddell & Reed Bleeds Two More Top Teams
Waddell & Reed Financial Advisors continues to experience exits of independent brokers as two of the firm’s largest teams—including its third-largest by production—left in the past week
Gary Bouch, who said his five-person team achieved its high ranking by generating around $2.2 million in annual revenue and overseeing some $225 million of client assets, set up as an independent registered investment advisory firm called Oxinas Partners Wealth Management last Wednesday.
Based in Jeffersonville, Indiana, Oxinas also includes advisors Brian Coxon, Matthew Wagner and two associates, according to Bouch, a 17-year brokerage veteran who joined Waddell in 2013 from Ameriprise Financial. Bouch is 49 and Coxon and Wagner are each 31.
The move came one day after another large Waddell team bolted last Tuesday in Kansas City, Missouri.
Led by brokers Jennifer Malone, Andrew Rogers, Adam Hawley, and Steve Minshull, the team that was managing $232 million and generating around $1.4 million, joined LPL Financial in Kansas City, Missouri, according to a person familiar with their practice.
Waddell’s independent broker headcount has fallen by 28.5% to 1,130 advisors as of the end of June from 12 months earlier, according to parent Waddell & Reed Financial Inc.’s quarterly earnings report. Highlighting the significance of last week’s departures, the average advisor at the Kansas-based broker-dealer was producing $314,000 annually, the company said.
Bouch attributed his team’s move in part to frustration over Waddell’s technology and investment platforms. In particular, he said his team wanted to offer leveraged and inverse exchange traded funds—instruments that regulators have warned are complex and that Waddell has not been offering. Bouch said he believes the products can help clients hedge themselves at what may be the height of a bull market.
“We stayed as long as we could,” said Bouch, who has chosen Schwab Advisor Services as custodian for his new firm’s customer accounts. “It’s not difficult to move somewhere that gives you more advantages.”
A spokesman for Waddell & Reed did not return a call for comment.
The firm has fueled revenue through sales of proprietary, actively managed mutual funds—an increasingly unpopular classification at a time when index funds and a fiduciary standard of care that clashes with proprietary sales have been in the ascendancy.
Waddell last November named Shawn Mihal, its chief operating officer and chief compliance officer of its Ivy Funds unit, as president of the broker-dealer, replacing Thomas Butch. In April, Waddell hired Elizabeth Hansen from Ameriprise Financial to take Mihal’s former positions.
Bouch said he began due diligence on alternatives to Waddell & Reed about a year ago. He was impressed with independent broker-dealer Cambridge Investment Research, but opted for the RIA model because of economic incentives offered by Schwab. His younger partners Coxon and Wagner are retaining their brokerage licenses through Finra member firm M.S. Howells & Co.
Fusion Financial Partners, an independent RIA recruiting and consulting firm run by former HighTower Advisors recruiter Michael Papedis, advised the Bouch team on their move.
The new LPL team led by Malone is operating as BMG Advisors, according to her LinkedIn profile. Malone and Rogers had spent their entire brokerage careers with Waddell, with Malone first registering in 2007 and Rogers in 2014, according to their BrokerCheck records.
Hawley, who had been with Waddell since 2013 and had formerly been a district branch manager for the firm, began his brokerage career in December 2005 at American Family Securities, according to BrokerCheck. Minshull joined Waddell in 2015 after short stints at Morgan Stanley Smith Barney and Merrill Lynch.
The departures at Waddell come on the heels of its loss on August 16 of the husband-wife team of Elaine and Scott Manley in San Jose, California, who had been with the firm since 1986 and 2000, respectively. They have set up as registered investment advisors through Mutual Advisors, and are maintaining their brokerage licenses through Mutual Securities Inc., according to BrokerCheck.
The pair had generated $1.4 million in production and ranked #11 among Waddell teams, according to “Investment News,” which earlier reported their move.