J.P. Morgan, Raymond James, plus who made a diversity index, and awards and scholarships

September 17, 2021 12:51 PM

As usual, advisors were on the move, breaking away from wirehouses and switching firms. But we also have news of an unregistered Boston advisor getting jail time, Fidelity offering third-party cybersecurity to its clients, the FPA’s Heart of Financial Planning Award and CFP Board scholarships for diverse CFPs. Scroll through to find what you might have missed this week in financial planning news.

The CFP Board’s Center for Financial Planning unveiled two new partnership scholarships with major RIAs and a new reference book about entering the planning profession called the “Guide to Careers in Financial Planning.” The textbook covers planning career development across the profession through interviews with 77 executives, recruiters and advisors at 42 different firms. In addition, Ballentine Partners and Aspiriant launched scholarship programs aimed at supporting prospective CFPs of diverse backgrounds. Ballentine’s program will provide four awards of up to $5,000 each to 16 qualified students identifying as Black or Hispanic. Aspiriant is supporting three awards each year, for a total of four awards of $10,000 and eight awards of $5,000 for students at undergraduate and certificate-level CFP programs. “We believe that supporting diversity among the next generation of the financial planning community is vital to the future of our industry,” Drew McMorrow, CEO of Ballentine, said in a statement. “We are grateful with this scholarship to support the goal of bringing new voices into the profession.”

Two giant wealth managers appointed executives whose new roles revolve around data. In one move, Advisor Group hired Clayton Chandler as the firm’s chief security, privacy and data officer. Chandler joins the firm with an impressive resume: A former research scientist at Los Alamos National Laboratory, he was once the technical director for high-performance data analysis for the National Security Agency and joins Advisor Group from Credit Suisse, where he was the chief information security officer. In the other hiring, LPL Financial tapped Cara Dailey as its chief data officer. She’ll lead a data and analytics team in a newly created position reporting to Rich Steinmeier, LPL’s divisional president of business development. Her previous jobs include time with Silicon Valley Bank as its chief data officer as well as prior roles with Nike, Bank of the West, General Electric and Oracle.

Financial advisor Michael Krost of Houston-based MDK Financial Group dropped Advisor Group’s Royal Alliance Associates after 35 years to go to Geneos Wealth Management. The practice managed $288 million in client assets with its prior firm. "Considering our average client has been with our firm for more than 20 years, I was searching for a broker-dealer/RIA that provided a more sophisticated, turnkey wealth management solution with a platform to complement the tactical, diversified and proactive strategies we have been utilizing for our clients," Krost said in a statement "Additionally, we were looking for a partner that offered a variety of asset managers and state-of-the-art technology.”

A major enterprise in LPL Financial’s Institution Services arm added a sizable bank investment program from Advisor Group’s Royal Alliance Associates and Raymond James. Sandstone Wealth Management, the investment program of Nebraska-based regional bank Heartland Bank, joined JFC Advisor Network. Advisors Tyler Daly and Mike Theis, along with two assistants, run the wealth program. “We’ve found that LPL has a really robust online retirement planning portal and other enhanced technology offerings that will help us streamline our business to focus more on clients and make their investment experiences even better,” Daly said in a statement.

Unregistered Boston-area financial advisor Felix Gorovodsky will spend nearly three years in federal prison after pleading guilty earlier this year to one count of bank fraud. Gorovodsky, 29, allegedly transferred more than a quarter million dollars out of a former client’s bank account to his own, using much of the victim’s retirement money to pay personal expenses like his student loans. The victim had terminated the relationship nine months before the outlays, according to federal prosecutors. The sentence in Boston District Court includes 33 months in prison, plus two years of supervised release and restitution of $310,492.

RBC, Allianz, BlackRock, BMO, UBS and eight other global financial services firms made the top 100 firms on Refinitiv’s annual Diversity & Inclusion Index. The financial services technology and research firm graded companies across four pillars: diversity, inclusion, people development and controversies. “The expectations of a new generation of investors are reverberating up the asset management value chain,” said William Trout, director of wealth management at Javelin Strategy & Research. “These center on investing to ESG criteria and the digital experience in general. Today’s investors are far more likely to embrace ESG than their parents, from whom they stand to inherit the bulk of consumer wealth. Their motivations and triggers are also distinctive, in that social and corporate governance issues rival the environment in their calculus. Meeting their needs in an engaging and interactive manner constitutes a make-or-break opportunity for the modern wealth manager.”

Financial product distribution company The Simplicity Group has acquired Minneapolis-based unified managed account firm Sawtooth Solutions, which has $17.48 billion in assets under management on behalf of independent advisors working with the firm. The firm’s clients range from individual advisors to large banks and broker-dealers. Simplicity owns 27 different businesses operating as independent subsidiaries. "Simplicity's resources are extensive and through disruptive innovation, we will advance the capability of our advisors to help them meet the ever-increasing demands of their clientele,” Sawtooth CEO Brad Pries said in a statement. “With access to Simplicity's expertise, capital and talent, we can execute on best ideas to drive growth for the combined firms." Investment bank and consulting firm Echelon Partners advised Sawtooth in the transaction.

The FPA gave financial advisors Hannah Moore and Laurie Dubchansky its 2021 Heart of Financial Planning Award for “financial planning professionals, firms and organizations that demonstrate remarkable commitment and passion for contributing or giving back to the financial planning community and/or public,” according to the organization. Moore, of Guiding Wealth in Richardson, Texas, is the host of the “You’re a Financial Planner...Now What? Podcast” and the FPA Activate group on Facebook, as well as the lead organizer of the FPA Virtual Externship. Dubchansky of Havaplan Financial in Newport Beach, California, is on the board of Women Investing in Security and Education and the chair of the Pro Bono Subcommittee for the Orange County FPA chapter. “Hannah and Laurie are setting an important example for how those in the profession can positively impact lives and elevate financial planning,” FPA President Skip Schweiss said in a statement. “Their efforts to open the profession to the next generation and help those in underserved and at-risk communities get the financial guidance they need shows the heart they have for this profession.”

Financial advisors David Crossan and John Stephens launched a newly independent practice called Shoreline Wealth Management with LPL Financial’s Strategic Wealth Services. The pair joined LPL from Wells Fargo Advisors, where they managed $305 million in client assets. “The time is ripe for advisors looking to transition to independence, and we want to start our firm and welcome other like-minded advisors into our network,” Stephens said in a statement.

Former BNY Mellon wealth manager Michael Rieger left the firm to become market leader for the Hudson Valley/Metro New York region of Key Private Bank. He’s based in New York City and reporting to Thomas Scaturro, Key’s regional executive for eastern markets. With prior tenures at Merrill Lynch and Pergament Advisors, the 20-year industry veteran worked with clients that had $1.3 billion in assets under management in his previous position. “Our history and reputation have attracted top talent like Mike to help us meet this goal," Scaturro said in a statement. “I know that Mike will have a dramatic impact on the growth of our business as well as seeing that our team provides an exceptional client experience.”

An RIA and network of 1,000 independent financial advisors, Brookstone Capital Management, and lead marketplace SmartAsset launched a strategic marketing partnership giving the firm’s advisors access to the SmartAdvisor platform. The amount of closed investable assets for advisors on SmartAdvisor is on pace to reach $20 billion this year, up from $10 billion last year and $5 billion in 2019, according to the firm. “Our singular goal at Brookstone has always been to help our network of Advisors grow their businesses,” Brookstone President Darryl Ronconi said in a statement. “One of the ways to do that is with consistent lead generation.”

Massive hybrid RIA NewEdge Wealth appointed Rick Hollmann to be its head of advisory solutions for the Mid Atlantic Capital Corporation-affiliated enterprise spanning $26 billion in client assets. Hollman had tenures with UBS, Lehman Brothers and Morgan Stanley prior to joining NewEdge, which works with ultra high net worth clients, family offices and institutions. “NewEdge Wealth has a clear vision for our growth, and Rick will play a key role in continuing the momentum,” NewEdge President John Straus said in a statement. “His expertise in advisory solutions and family offices is unmatched, and we are thrilled to welcome him to our team.”

One of the largest fee-only RIAs, Chicago-based Cresset Asset Management, tapped Paul Algreen to be its chief technology officer and Archan Basu to be its deputy chief investment officer. Algreen joined Cresset from Janus Henderson Investors, where he was the chief information officer, and he had earlier positions with Markit Group and III Associates during his nearly 20-year career. Basu had been the head of portfolio construction guidance for Fidelity Institutional Asset Management after earlier tenures with J.P. Morgan’s Private Bank, Bernstein Global Wealth Management, AllianceBernstein, Barra and Grantham, Mayo, Van Otterloo & Co and Fidelity Institutional Asset Management.

Allianz Life Insurance hired Sophia Khan, the former head of global diversity, equity and inclusion at Thomson Reuters, to be its chief diversity and inclusion officer. She reports to Allianz CEO Jasmine Jirele. She had earlier tenures in human resources and diversity and inclusion roles with Medtronic, Wells Fargo, 3M and PepsiAmericas. “Sophia is recognized as a strategic leader who has driven impactful and data-driven D&I programs with measurable results,” Jirele said in a statement. “Increasing diversity in our business and supporting equity in our communities is not only core to our values, but also critical to our success. Her expertise will help us continue to advance and accelerate our diversity, equity and inclusion strategy so that we can be even more effective in our efforts in the years to come.”

Kestra Financial’s midsize independent subsidiary Grove Point Financial tapped Tyson Lozano to be its vice president of business development, reporting to Rob Engle, the firm’s head of business development. The Warburg Pincus-backed firm aims to boost its growth through the pair of new recruiting executives it has added this year. Lozano has helped recruit roughly 200 advisors over the course of his career as the former vice president of advisor recruiting at Advisor Group’s FSC Securities and earlier roles with Raymond James and LPL Financial. “We are excited to welcome someone with such deep industry knowledge to the team,” Engle said in a statement. “Tyson will be a valuable asset in recruiting quality professionals to our platform as well as managing all aspects of the sales funnel, making him an excellent addition to our expanding team dedicated to growth.”

Financial advisor Jeff Boyer and staff members Carol Bradley, Calvin Egan and Kate Egan of Lynchburg, Virginia-based 7 Grains Planning & Investments dropped Edward Jones to affiliate with Commonwealth Financial Network. The team managed about $60 million in client assets with its prior firm. “We support our clients with kindness and compassion, with a focus on community, and we love to see our clients flourish,” Boyer said in a statement. “Joining the Commonwealth family of advisors was a natural choice because we knew they valued the same things.”

Raymond James & Associates grabbed a wirehouse breakaway team composed of financial advisors Joel Moline, Scott Mercer, Bassem Abou-Zeid and John Sullivan from Merrill Lynch. The Minneapolis-based team managed $675 million in client assets with the wirehouse. “The firm’s strong client-centric culture and the independence given to advisors to run our businesses allow us to focus on serving our clients and their wealth management needs,” Moline, a 35-year industry veteran, said in a statement. “Raymond James has continued to invest in resources that support our work with clients, including advanced technology tools. We’re excited to join Raymond James and further elevate our client offerings and service.”

Snowflake, a cloud-based data storage company, has a new product specifically tailored to financial services companies. Companies in wealth and investment management, banking, insurance and fintech can use the Financial Services Data Cloud to collaborate on data across the company while meeting regulatory requirements, according to the company. Snowflake already powers Blackrock’s Aladdin Data Cloud and State Street’s Alpha Data platform, and counts Allianz, AXA, Capital One, NYSE, Refinitiv and Western Union among its customers.

Wave Financial, which describes itself as an RIA for digital assets, announced that it crossed the $1 billion AUM threshold, doubling its total assets since the end of May, 2021. The firm credits its rapid growth to its offering of non-fungible tokens (NFTs) and a division of the company that provides custom portfolios to blockchain companies, institutional investors and high net worth investors. “With decentralized finance valued at more than $100 billion and continuing to soar, cryptocurrency and digital assets are becoming more mainstream, and investors all over the world want market exposure,” said Les Borsai, Wave chief strategist and co-founder.

Alternative investments fintech iCapital Network and Grayscale Investments have a new partnership to provide the 6,700 advisors using iCapital with access to Grayscale’s cryptocurrency investment strategies. It’s the digital asset offering available on iCapital, and the fintech will provide technology, educational materials and investment servicing. Grayscale offers 15 cryptocurrency investment strategies and currently manages $43 billion in assets.

Fidelity Institutional is now offering access to a third-party cybersecurity company to its wealth management clients. The company, Armorblox, specializes in analyzing emails and detecting suspicious behavior, which Fidelity says can help protect advisors and their clients from business email fraud. Compromised email was the top cybercrime reported in 2020, according to FBI data cited by Fidelity, and cost a total financial loss of $2.1 billion.

LGBTQ Loyalty Holdings, a financial data and ETF firm, finalized its previously announced $10 million in available equity capital from GHS Investments. The firm, which has tennis legend Martina Navratilova and former Congressman Barney Frank on its board, launched its first product this year offering a large capital growth fund composed of stock in firms that meet its strict criteria, including workforce equality practices and a survey of LGBTQ Americans. The financing from GHS “is the best possible outcome for LGBTQ Loyalty,” CEO Bobby Blair said in a statement. “Over the next two quarters, we can be secure in the knowledge that we will have the backing of a solid financing partner, allowing the Company to prioritize the retirement of our convertible notes, monetize our assets and grow revenue through future financial product revenue models currently being vetted while we focus our efforts on continuing to create fundamental value and growth for our shareholders.”

Financial advisors Teresa O’Connor, Greg Buchanan and Mike Aschberger left Voya Financial Advisors for Advisor Group’s Royal Alliance. The team based in Houston and Spring, Texas, as well as Franklin, Wisconsin, goes by the name of Altus Consulting Group, and the trio managed a combined $366 million in client assets with their prior firm. They created a new office of supervisory jurisdiction as part of their move. “As we looked at all that Advisor Group and Royal Alliance had to offer, we were particularly impressed with the digital marketing support offered as part of the MyCMO platform, along with Advisor Group’s eQuipt technology offering, which we view as an asset that will immediately strengthen our ability to serve clients,” O’Connor said in a statement. “Importantly, because of our focus on retirement plan services, we were also impressed by Advisor Group’s Retirement Learning Center.”