Steward hits $1 billion in recruited assets with new $315 million team

Year-old RIA backed by Raymond James making a splash with former Morgan Stanley brokers

Jul 8, 2014 @ 12:01 am

By Mason Braswell

ria, registered investment adviser, raymond james, steward partners, morgan stanley, aggregator, breakaway
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Just over a year after its founding, a Raymond James-backed roll-up firm has recruited advisers with more than $1 billion in assets under management after recently adding an ex-Morgan Stanley duo.

Steward Partners Global Advisory, which was founded last July by several ex-Morgan Stanley managers, has grown quickly as an aggregator mostly of former wirehouse teams. The firm has brought on 16 advisers since the first team joined in October. The advisers collectively managed more than $1.2 billion in assets at their previous firms.

Steward Partners' actual AUM is around $750 million because many of the moves are recent and not all client assets have transferred, according to the firm's chief executive, Michael Maurer.

(Advisers on the Move: See the details on Steward Partners' adviser additions)

“To me it's one of the exciting new things that is out there,” said Danny Sarch, a career consultant with Leitner-Sarch consultants. Getting to $1 billion in recruited assets “gives some credibility to their story.”

Steward Partners has brought on industry recruiters including Mr. Sarch as it looks to bring on a total of around 50 or 60 partners in the next decade.

The most recent team includes brothers Kenneth and Erik Mathieson, who together had managed around $315 million in assets and will operate out of New York. They had been with Morgan Stanley since 2009, according to records with the Financial Industry Regulatory Authority Inc.

Morgan Stanley spokeswoman Christine Jockle confirmed the Mathiesons' departure but declined to comment further.

Nine of 11 of Steward's top executives, including Mr. Maurer, were legacy Morgan Stanley Smith Barney managers or advisers and the firm has been attracting other former Morgan Stanley breakaways.

Last month, for example, the firm added a registered investment adviser team that left Morgan Stanley back in June.

Since opening its doors last year, Steward has also brought on other former Morgan Stanley managers, including, most recently, Joe Rizzo, who had been head of financial adviser development at Morgan Stanley. Mr. Rizzo left Morgan Stanley in June, according to Finra records. He is now president of Steward Partners' consulting unit, a division that helps advisers go independent under their own brand. Scott Abry, who shares a Morgan Stanley lineage, is CEO of the unit.

Teams that join Steward Partners become W-2 employees of the firm and receive equity in Steward Partners in exchange for a share of revenue. They also receive transition money in the form of an upfront and back-end bonus that is funded by Raymond James Financial Services Inc., which also provides the platform and clearing services. Steward currently reports on Raymond James' Form ADV with the Securities and Exchange Commission.

Raymond James executives have declined to specify how much the firm has invested in Steward Partners.

In an interview at Raymond James Financial Services Inc.'s conference in May, the firm's chief executive, Paul Reilly, dismissed the idea that the Steward Partners venture could compete with existing registered investment advisers on the Raymond James platform, or with its employee channel, which has around 2,400 advisers. Mr. Reilly said that most of the time the two do not cross paths, and it gives advisers more ways to affiliate with Raymond James.


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