Merrill team jumps ship, signs with Focus Financial
A team of Merrill Lynch Wealth Management advisers, frustrated with new rules at Mother Merrill preventing them from…
A team of Merrill Lynch Wealth Management advisers, frustrated with new rules at Mother Merrill preventing them from signing up new institutional accounts, has launched an independent registered investment adviser with the help of Focus Financial Partners LLC.
John Beirne Jr. and three other Merrill Lynch financial advisers operating as the Beirne Wealth Management Group in Milford, Conn., opened up shop as an RIA firm last Monday. Three support staff members also are joining the team, which manages nearly $2 billion in assets.
The move was prompted by Merrill Lynch’s move to stop advisers from signing up new accounts managing money for government agencies, cities and states.
“About 60% to 70% of our revenues come from that space,” said Mr. Beirne, a 33-year veteran of Merrill Lynch. “[Merrill Lynch] basically told us we can’t grow in that market.”
New rules at Merrill Lynch prohibiting the use of some alternative investment vehicles also cramped his team’s investing style, Mr. Beirne said.”This change would have interfered with an investment process we’ve been using for 35 years. We would have lost accounts,” he said.
“Either we had to change our process or change firms,”Mr. Beirne said. “We decided to change firms.”
Merrill Lynch said that the changes were needed because of new compliance regulations in the Dodd-Frank Act, according to Mr. Beirne.
Other large wirehouses, however, told him they hadn’t instituted similar rules.
Merrill Lynch spokeswoman Selena Morris confirmed the departure of the advisers but declined to comment further.
The new firm, Beirne Wealth Consulting LLC, will continue to manage money for institutions, as well as for high-net-worth individuals and families. It will use Fidelity Institutional Wealth Services as its primary custodian for client assets.
The move represents another coup for Focus Financial, whose affiliated firms now manage more than $45 billion in assets.
“Over the last year, we’ve seen an accelerating trend of sophisticated adviser teams’ looking to make the move toward an independent, fiduciary-based business model,” Ruediger “Rudy” Adolf, chief executive of Focus Financial, said in a statement. “The BWC deal further demonstrates the trend.”
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