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Career moves

Commonwealth Financial Network, LPL Financial, SEC enforcement, M&A dealmaking and other news of the week

ByEditorial Staff
July 16, 2021 6:51 PM

The U.S. economy is on pace for its best year of growth in GDP in decades, according to LPL Financial’s midyear outlook. The SEC hired a team of new policy officials, and barred a jailed Morgan Stanley advisor who pleaded guilty to defrauding clients out of $6 million. Wealth management mergers and acquisitions are at record levels in the first half of 2021, with RIA consolidators making 40% of the purchases, DeVoe & Co. found. And advisors moved to LPL, Commonwealth Financial Network, Summit Trail Advisors and Advisor Group, among other news, career moves, and quick takes.

Scroll through to see more of the week's news from the world of financial advice.

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Financial advisor Alan Kodama of Honolulu-based Pacstar Financial Group dropped Ameriprise to affiliate with LPL Financial and its corporate RIA. The team includes three other advisors, Thomas Lodico, John Araki and Rose Antonio, and three other offices in Kauai, Pearl City and Maui. They managed $420 million in client assets with their prior firm after Kodama’s practice acquired seven others during its 34-year history. Pacstar picked LPL after speaking with five firms over two years as part of their due diligence. “Ultimately, it came down to what was best for our clients,” Kodama said in a statement. “With LPL, we believe we will be able to offer additional resources and investment options to clients at lower costs.”
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Nearly a year after ex-Morgan Stanley representative Michael B. Carter pleaded guilty to defrauding clients for more than $6 million and three months after a federal judge sentenced the former advisor to five months in prison, the SEC barred him from the industry. The final consent order in Maryland federal court also requires disgorgement of $4.2 million, but that amount is included in the restitution order in Carter’s sentencing. For a dozen years, Carter misappropriated client money through unauthorized wire transfers, spending it on a home mortgage, a luxury car, Ponzi-like payments and other uses, according to investigators. Many of the victims were older adults.
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Commonwealth Financial Network added a wirehouse breakaway practice led by former UBS broker Klaudia Conradt. Having managed $132 million in client assets with UBS, Conradt joined an existing Commonwealth affiliate in Gig Harbor, Washington, called Conestoga Wealth Partners. “The flexibility of the independent business model will serve my clients and my business very well, and choosing independence at a firm with Commonwealth’s reputation among my peers was important to me,” Conradt said in a statement. “Not only am I able to offer unlimited solutions to the clients I want to work with, I also have more control over my schedule and how I run my practice.”  
Despite the pressure from inflation, the U.S. economy is on pace for its best year of growth in GDP in decades, according to LPL Financial’s midyear outlook. The wealth manager’s research team is projecting expansion of between 6.25% and 6.75%, with a range on the 10-year U.S. Treasury yield expected to finish the year at 1.75% to 2%. Federal coronavirus relief and rising stock values will help to fuel the growth, LPL’s research team says. “Demand is strong, but labor shortages and supply chain issues could lead to increased prices,” Chief Market Strategist Ryan Detrick said in a statement. “It is our goal to help investors understand these market challenges and encourage them to focus on staying the course to reach their long-term investment goals.”
Summit Trail Advisors, an RIA using the Dynasty Financial Partners platform with $12 billion in assets under management, hired an 11-member planning team formerly of Heritage Strategies and led by Alex Shapses. The group includes four advisors and seven planning professionals who will serve Summit’s multi-family office with locations in Boston, Chicago, Harrisburg, PA, New York, San Francisco and Seattle. “They offer a highly differentiated financial planning capability that will enhance our clients’ experience,” Jack Petersen, managing partner of Summit, said in a statement. “This expansion represents an important step toward delivering the full suite of family office services that many of our families have been seeking.”
The Bahnsen Group, with $3 billion in assets under management, hired Minneapolis-based Story Capital. Family-led Story Capital has $60 million assets under management. Co-founder Phillip Barnhill will serve as senior wealth advisor and the director of risk management and Michele Barnhill, his wife, will serve as office manager. Their son Stoddard Barnhill will be a lead advisor in the firm's Private Wealth Advisor Group. ''While Michele and I have been in the business as practitioners for decades, our re-charged focus on the C-suite ideally matches up with The Bahnsen Group," said Phillip Barnhill in the statement. Joining them are Sarah Leitzke in the services and planning department and Reid Gustafson in the operations department.
Despite some slowdown in the second quarter, the number of M&A deals reached 101 at the end of the first half of the year, according to the latest quarterly report from consulting firm DeVoe & Company. The volume is 51% above the first half of 2020 and appears likely to surpass the record of 159 set last year. Sales of firms with $500 million to $1 billion in AUM more than doubled in the first half compared to the same span last year. And RIA consolidators were the buyers in more than 40% of the transactions. “Year-to-date activity speaks to a broader trend of accelerating M&A momentum,” according to the DeVoe & Company RIA M&A Dealbook. “In no other year was the important, albeit psychological, century milestone for transactions reached in a shorter time span.”
Vice President Harris Addresses Generation Equality Forum
Vice President Kamala Harris speaks during the Generation Equality Forum in Washington, D.C., on June 30, 2021.
Ken Cedeno/Bloomberg News
Last week, the UN held one of the largest gender equality meetings in decades with the Generation Equality Forum in Paris. Governments, private companies and nonprofits pledged a commitment of $40 billion towards gender equality organizations and programs, with Vice President Kamala Harris on hand to deliver remarks. In a similar vein, Fidelity Investments and Invesco are launching ETFs that focus on gender equality, with the June opening of the Fidelity Women’s Leadership ETF and the pending rollout of the Invesco Racial and Gender Diversity ETF, according to a monthly report from gender lens investment research firm Parallelle Finance.
Fund manager VanEck has launched the VanEck Environmental Sustainability Fund, which focuses on global companies in fields like renewable energy, agriculture and water with a mission of aligning investments with the UN’s sustainable development goals. VanEck designed a strategy it calls “Claws,” for climate, land, air and water to guide the holdings in the fund. “By taking a comprehensive approach across various sectors with this fund, we’re able to identify a broad range of companies that are purposely focused on critical land and water factors, as well as greenhouse gas emissions,” Portfolio Manager Shawn Reynolds said in a statement. “Our goal is to provide investors with a means through which they can invest in and support publicly traded companies that are measurably addressing climate change by developing innovative solutions to environmental issues for the long term.”
The Securities and Exchange Commission flag flies in front of a building.
Bloomberg News
New regulators at the SEC: Attorneys Corey Klemmer, Adam Large, Mika Morse, Sirimal Mukerjee and Sai Rao have all joined the policy staff under Policy Director Heather Slavkin Corzo.
Insurance will play a larger role at Lincoln Financial Network’s broker-dealer, Lincoln Financial Securities, as insurance marketing organization Aimcor Eig launches a strategic distribution partnership to “deploy a focused group of our collective 120+ point-of-sale professionals into the local offices of the LFS OSJs through a centrally coordinated engagement driven by our EIG national account team,” Aimcor Managing Director Marc Verbos said in a statement. The firms designed the partnership in an effort to integrate more insurance products into a holistic financial plan. “With heightened regulations, we see an opportunity to improve the resources available to our financial professionals,” Wendy Boyd, co-head of LFS, said in a statement. Aimcor’s “comprehensive technology capabilities enhance the user experience by delivering industry-leading market intelligence software, end-to-end e-processing, compliance, suitability review and more.”
Wealth Enhancement Group acquired a Houston-based practice with $513 million in client assets and called Fitzgerald Wealth Management. The team includes advisors Michael Fitzgerald, Richard Heard, Rachel Garza and Derek Platt. With the June 30 deal for an undisclosed price, private equity-backed Wealth Enhancement has completed eight deals this year and reached nearly $38 billion in client assets. 
Advisors Frank Chiodi and Russell Pinto of Scarsdale, New York-based Precision Wealth Solutions left Voya Financial Group for Advisor Group’s Royal Alliance Associates. The practice catering to police and firefighter clients managed $121 million in client assets with their prior firm, and the duo joined Affiliated Advisors as the firm’s office of supervisory jurisdiction. “Many of our clients are first responders who, over their careers, have sacrificed so much to keep us all safe,” Chiodi said in a statement. “They deserve a great service experience. For us to serve them better, it was imperative to upgrade our digital platforms and solutions and have access to experts that can help us best leverage technology in all aspects of our business.”
A Cetera Financial Specialists-affiliated enterprise called Farpointe Wealth Partners added three offices in Los Angeles and Syracuse, New York, with the addition of teams that managed a combined $250 million in client assets with their former firm, Avantax Wealth Management. In Los Angeles, the tax-focused enterprise added David and Ryan Richardson of Richardson Financial Group and Jennifer deSpain of Canyon Oak Financial. In New York, Shelly and Ed Terzolo of Terzolo Financial Group joined Farpointe.  
LPL Financial Building
Bloomberg News
LPL Financial’s outsourced business services for advisors added another layer with the firm’s newly launched Resilience Plan to provide administrative and account support during short-term leaves of absence for medical, family or other reasons. “More than ever, we see a critical need to support the ongoing health and well-being of our advisors,” Matt Enyedi, LPL’s managing director of business solutions, said in a statement. “Through our Resilience Plan, we aim to do exactly that: provide advisors with access to LPL’s dedicated team of professionals, who can offer interim support to help ensure advisors have a strong practice to return to following a family or medical leave.”
BNY Mellon Wealth Management has a new tool to give high-net-worth investors more customized advice in their wealth planning strategy. Clients answer a set of questions and the tool, called the Active Wealth Accelerator, recommends how the investor can improve borrowing, spending, investing, asset protection and ongoing management. Optimizing these five factors can increase wealth accumulation up to 5.2% on an annualized basis, according to BNY Mellon’s website. 
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