Two teams split Morgan Stanley to go independent

Focus hires $250 million team on the heels of the departure of $550 million team to Raymond James

Jan 21, 2014 @ 1:51 pm

By Trevor Hunnicutt

Morgan Stanley's loss is the independents' gain.

A set of departing teams from the largest U.S. brokerage firm by financial adviser head count has joined the independent space this month.

On Tuesday, Focus Financial Partners said that one of its affiliated firms has hired a team from Morgan Stanley, in the year's latest major announced departure of a wirehouse team.

Milford, Conn.-based Beirne Wealth Consulting hired advisers Christopher Englebert and Daniel Reitz, Focus CEO Ruediger “Rudy” Adolf said.

Mr. Englebert and Mr. Reitz, who managed a total of about $250 million for clients at Morgan Stanley, will be based in a new satellite office in Allentown, Pa., according to Mr. Adolf.

“2014 will be a very significant year from an independent perspective, where brokers will be leaving the wirehouses,” Mr. Adolf said. “We believe this has a lot to do with the ongoing challenges that wirehouses have.”

Mr. Adolf said the business models of those firms, which include Morgan Stanley Wealth Management, Bank of America Merrill Lynch, Wells Fargo Advisers and UBS Wealth Management Americas, are not sustainable, given a range of financial and regulatory pressures.

In an e-mail, Morgan Stanley spokeswoman Christine Jockle described Mr. Adolf’s comment as “a little bit of wishful thinking,” adding that attrition at the wirehouse has been “steadily declining” each quarter for more than a year and that when the firm does lose productive advisers, it is “most often” to other wirehouses. She noted the firm set records last quarter for net revenue, pretax profit margin and client assets.

The Beirne team also includes Jamie Englebert and Elizabeth Garnto, who consult on defined-benefit and defined-contribution plans as well as specialized financial planning topics.

In the year's largest announced move to date to the independent space, another Morgan Stanley broker team, now called the Winter Park Wealth Group, affiliated with broker-dealer Raymond James Financial Services Inc.

Raymond James' deal with the team's Winter Park, Fla.-based advisory firm was announced last week.

Those advisers managed $550 million for clients and generated annual revenue of more than $2.3 million, according to Raymond James.

Raymond James' employee-broker-dealer channel also said that it added a Portland, Ore., team, Saunders Kelly Acheson Wealth Management, from Morgan Stanley.

And LPL Financial added two advisers, Thomas J. Dornoff and Ellen M. Duhamel, who managed $130 million at Morgan Stanley, the firm said.

And Highline Wealth Management, a fast-growing Bethesda, Md.-based advisory practice with $1.3 billion in assets under management, said last week that it was hiring former Morgan Stanley adviser Michael Moriarty in a so-called tuck-in deal.

Mr. Moriarty's asset figure wasn't announced, but company spokesman Jason Lahita said that is in the tens of millions of dollars.

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