The custodial firm TradePMR Inc. has signed on with First Clearing LLC.
The conversion to First Clearing from TradePMR's current clearing firm, Sterne Agee Clearing, will be completed by August, according to Robb Baldwin, chief executive of TradePMR.
Mr. Baldwin said his growing firm needed a larger clearing firm that offers banking and trust services.
“We wanted on-demand [automated clearinghouse] capability,” which lets customers transfer funds, he said, “and we felt it was a real edge to have a national trust presence.”
First Clearing, a unit of Wells Fargo & Co., also will provide access to lending services, Mr. Baldwin said.
He indicated that Sterne Agee lacks those banking capabilities.
“I think First Clearing will help us attract some of the larger advisers” from wirehouses, Mr. Baldwin said. These brokers are more comfortable with a larger clearing firm, and are used to having trust and lending products, he said.
TradePMR, which holds assets in custody for about 840 advisers, caters to RIA firms with smaller asset bases.
The firm's advisers manage “a bit under $10 billion” in total, Mr. Baldwin said.
A spokesman for Sterne Agee was not available to comment.
Mr. Baldwin said First Clearing is a “great fit” because it didn't compete with TradePMR's advisers for clients.
“They don't have a "talk to Chuck' message,” he said, referring to The
Charles Schwab Corp.'s tagline directed at investors.
The new partnership is not seen as a means by which Wells Fargo will get into the RIA custody business.
TradePMR can't recruit or accept advisers from Wells Fargo Advisors, Mr. Baldwin said. Broker-dealer clients of First Clearing have a similar restriction.
Advisory firms that use Trade-PMR as their platform are free to go after Wells Fargo advisers, however.
“We have so many [RIAs], they're free to do what they want,” Mr. Baldwin said.
Wells Fargo has about 14,000 brokers who work as employees of Wells Fargo Advisors LLC, and another 1,000 independent contractors with Wells Fargo Advisors Financial Network LLC.
First Clearing has a recruiting division that will team up with TradePMR, Mr. Baldwin said.
“They'll help us build [by referring] the [adviser] calls they get,” he said. “They don't have an independent adviser channel.”
But at some point, TradePMR could help Wells Fargo offer an RIA platform, said Ryan Shanks, chief executive of Finetooth Consulting LLC, which advises investment firms on strategy.
“I would think Wells [Fargo] would look at this [TradePMR deal] as a way to [offer] a platform for those advisers” who want their own RIA firm, he said.
If Wells Fargo advisers join TradePMR, their assets will remain with First Clearing, he said.
E-mail Dan Jamieson at [email protected].
