Barnaby Grist, senior managing director of strategic business development at
Charles Schwab Corp.'s investment advisor group, is leaving to join Cetera Financial Group, a new independent brokerage venture controlled by Lightyear Capital LLC.
His exit follows a
reorganization announced earlier this weekthat elevated Bernard Clark, head of sales and relationship management at Schwab Advisor Services, to run the entire unit that services independent registered investment advisers. Mr. Clark, who had been senior vice president of sales and relationship management at the unit, said in published interviews that Jon Beatty will assume his previous role managing sales for the RIA group.
Mr. Grist, who has been with Schwab's San Francisco-based RIA unit since 2003, will join Cetera on Monday as executive vice president of wealth management, focusing on recruiting adviser. He will move to Los Angeles, and report to Cetera chief executive Valerie Brown. Cetera is the new name for three independent broker-dealer firms that ING Groep NV sold earlier this week to a fund run by Lightyear and its founder, former PaineWebber Group CEO Donald Marron.
“It's unfortunate that he's leaving,” said Shannon Eusey, president of Beacon Pointe Advisors, an RIA firm that uses Schwab and other custodians for more than $4 billion of client assets. “They've been losing a lot of top talent.”
Besides Mr. Grist, Ms. Eusey said she was referring the departures of Charles Goldman and Deb McWhinney, previous heads of Schwab's RIA business unit. Mr. Goldman, who replaced Ms. McWhinney in 2007, was edged out in late 2008 when Schwab combined its RIA and retirement services businesses into a single unit led by Jim McCool, head of the retirement business. Until Mr. Clark's elevation last week, Mr. McCool had not delegated a single manager to oversee the RIA business.
Mr. Grist, a former consultant at Boston Consulting Group, has most recently oveseen Schwab's effort to help brokers leave wirehouses and create or join RIA firms. He also has responsibility for sales and relationship management with large national RIAs and with independent broker-dealers, turnkey asset manager, and consolidators, according to Schwab's website.
An Oxford University graduate with an MBA from Stanford University, Mr. Grist previously was in charge of relationship management for RIAs managing more than $1billion in assets.
A person familiar with Mr. Grist's move said he has been talking with executives of the ING brokerage units — which include Financial Network Investment Corp., Multi-Financial Securities Corp. and Primevest Financial Services Inc.— for about three months and found it fortuitous to leave with Schwab's reorganization in place.
“Barnaby has taken an exciting new job, and we wish him the best,” Schwab spokeswoman Lindsay Tiles said in an e-mail. She did not respond to questions about whether Mr. Grist will be replaced as strategy head and chief of the breakaway broker campaign.
In recent interviews, Mr. Grist said Schwab was in fairly serious talks with 300 to 400 teams of brokers at wirehouses and other firms who oversee some $30 billion of client asset.
Schwab has been competing with rivals such as TD Ameritrade Holdings Corp.'s institutional unit,
Fidelity Investments' Institutional Wealth Services group and Pershing LLC's Advisor Solutions group, not only for breakaway brokers but also for so-called hybrid advisers at independent broker-dealers such as Cetera. Hybrid advisers earn commissions for product sales and fees for advisory services.
Firms such as Pershing and Fidelity own correspondent-clearing businesses that service small broker-dealers, giving them an advantage in luring hybrid brokers already familiar with their operations and services, according to consultants.
Despite the breakaway broker phenomenon, custodians compete most fiercely to attract new assets from RIAs, who increasingly use several custodians. Schwab continues to be the largest custodian, overseeing about $590 billion of assets for clients of almost 6,000 RIAs. That compares with about $390 billion of assets Fidelity holds for more than 3,000 RIAs and about $100 billion that 4,000 RIAs store with TD Ameritrade.
Custodians make much of their money by selling investment products and brokerage services to clients of RIAs, and also by collecting interest on idle cash of some of those clients.
