Ameriprise, Raymond James, Baird, plus, a free client-acquisition course, and a Bitcoin mining settlement

March 27, 2022 12:39 PM

Choir, a technology firm that measures and promotes increased visiblity and representation of women, minorities and non-binary people at industry events, announced the first group of events that have passed its assessment. UBS is offering a fully remote working options in some wealth management roles. A Bitcoin mining company has settled a case in Massachusetts for $1 million. The State of Connecticut is launching a retirement plan for employees using Vestwell.

These stories, and the latest in advisor moves and M&A deals, are below. Scroll through to see what’s happened this last week in the world of wealth management.

Raymond James adds ex-Edward Jones financial advisor with $118M

Financial advisor Stuart Scibetta left Edward Jones to go independent with Raymond James Financial Services and Crux Wealth Advisors in Tucson, Arizona. Scibetta managed $118 million in client assets with his prior firm. He’s now operating the Crux office, a partnership of independent advisors affiliated with Raymond James. “After exploring a variety of firms, I chose Raymond James due to many factors,” Scibetta said in a statement. “Its offerings of robust analyst research and leading-edge technology, combined with an unwavering client-first culture, all allow me to focus on working in the best interest of my clients.”

Ameriprise recruits advisor duo with $150M from Wells Fargo

Ameriprise and Align Wealth Management, an established team within the wealth manager’s independent channel, picked up financial advisors Michael Tison and David Fry. The pair, who have offices in Harrisburg and Marion, Illinois, managed $150 million in client assets with their prior firm, Wells Fargo Advisors. “This move was also about practicing what I preach to clients about having a retirement plan,” Tison said in a statement. “While I plan to work for another 10 years, my clients appreciate that I’m being proactive and have a solid plan to care for them and their families for decades to come.”

FINRA reminds member firms of chief compliance officers’ supervisory liability

Sign outside offic eof Financial Industry Regulatory Authority

Only the chief compliance officers whose firms confer supervisory responsibilities on them can be held personally liable by FINRA for breaches of the rules governing supervision of registered reps, according to a new notice issued by the regulator on March 17. Over the past four years, FINRA has filed 440 disciplinary actions alleging violations of the supervision rules. Out of that number, just 28 charged chief compliance officers and in 18 of the cases they were also the CEO of the firm. “Chief compliance officers play an important role in facilitating compliance by promoting strong practices that protect investors and market integrity. That does not automatically make them supervisors, subject to FINRA’s supervisory requirements,” FINRA Executive Vice President of Enforcement Jessica Hopper said in a statement. “This notice helps to clarify when a CCO is — and is not — subject to potential liability under FINRA’s supervision rule.”

RIA M&A financer tops $1B in loans

About nine years after making its first loan to an advisory firm, Live Oak Bank reached more than $1 billion in financing to RIAs nationwide for M&A deals and other uses of the growth capital, according to the firm. “We’re immensely proud to reach such a significant milestone in lending to the investment advisor industry across the nation,” James Hughes, the head of Live Oak’s investment advisory loan team, said in a statement. “Our business model and dedicated team, who only specialize in this industry, are committed to helping owners grow their business and ultimately achieve the American dream of being a successful small business owner."

Baird poaches team with $275M from Wells Fargo

Financial advisors John Arnold and Jessica Tai, as well as client specialist Lisa Peterson, dropped Wells Fargo Advisors to join Baird’s Denver branch. The Arnold & Tai Group managed $275 million in client assets with its prior firm. Baird’s Private Wealth Management arm spans more than 160 offices in 33 states with client assets of more than $255 billion.

Former National Planning president hired to be enterprise’s chief strategy officer

John Johnson, the onetime CEO of shuttered brokerage firm National Planning Corporation before LPL Financial acquired the assets of its parent firm in 2017, is now the chief strategy officer of Glastonbury, Connecticut-based Gateway Financial Partners. Johnson’s new firm has 170 independent advisors who are affiliated with LPL and a support team of 95 corporate employees. He had worked for National Planning for nearly two decades, serving as the senior vice president of business development before becoming CEO in 2013. "John's industry experience and leadership skills are excellent," Gateway Chief Visionary Officer David Wood said in a statement. "I have immense respect for John having worked closely with him during our nearly 15 years at National Planning. Bringing him on as our new CSO aligns perfectly with our strategic and cultural goal of supporting and elevating the growth of our advisors."

SEC charges ex-Transamerica, New York Life rep with fraud

Barred former financial advisor Scott Allen Fries defrauded at least 10 clients for $458,000 between March 2014 and March 2019, according to the SEC. Fries spent his clients’ money on personal expenses while lying to them about the status of their investments through false account statements, misrepresentations to his employer and paying off one couple who discovered that the balance on their statement was fake, investigators say. In a default judgment the SEC secured in Cincinnati’s federal court, the regulator ordered Fries to pay disgorgement of $428,334.53, interest of $110,548.02 and a civil penalty of $208,500.

Advisor Growth Solutions launches client acquisition course for new advisors

A coaching and consulting firm called Advisor Growth Solutions is launching a new course called “Generating Revenue for New Advisors.” After a free webinar open to anyone interested in learning more about the program this month and next month, students will learn methods of identifying and acquiring clients at the beginning of their career. The course costs $3,500. One of the biggest problems that experienced advisors face when hiring a new advisor on their team is how they will train them,” Advisor Growth founder Jeffrey Czajka said in a press release announcing the course. “The impact can be significant and make or break the new advisor’s ability to succeed.”

Raymond James picks up $175M team in Florida from Morgan Stanley

Financial advisors John Patat and Joel Gravina of Focus Wealth Management dropped their wirehouse brokerage to join Raymond James & Associates at its branch in Naples, Florida. The team managed $175 million in client assets with its prior firm, Morgan Stanley. Client service associates Stephen McLaughlin and Morgan Gatlos joined Raymond James as well. “The firm’s notable emphasis on culture and promise to guarantee the rights of its advisors spoke to us,” Patat said in a statement.

Conference diversity fintech Choir unveils first certified and partner events

After launching in January, a technology firm that measures and promotes increased visiblity and representation of women, minorities and non-binary people at industry events called Choir announced the first group of events that have passed its assessment or aim to do so in their first year. Choir has certified the 2021 Advisor Summit by Envestnet, the 2021 ESG For Impact! Conference by First Affirmative Financial Network and Carson Group’s Excell 2021 in meeting its proprietary score tracking speakers and panels. New events Future Proof by Advisor Circle, Snappy Kraken’s Jolt! Conference and RIA Edge by Informa Connect are working with Choir as “partner conferences” to reach that level in their inaugural years. “We have reached a turning point in our industry,” Choir co-founder Sonya Dreizler said in a statement. “Speakers and attendees are paying attention to who is represented on stage at conferences, and many are choosing to spend their time and energy at conferences where women and people of color feel safe and welcome.”

Wells Fargo FiNet team with $345M returns to LPL

Pasadena, California-based Floe Financial Partners left Wells Fargo Advisors Financial Network for its prior brokerage firm, LPL Financial. Financial advisors Robert Floe and Marjan Neyestani Khazra, directors Chase Edwards and Anthony Minero and support staff members Leslie Salazar, Victoria Ditmer, Samuel Kempner and Nicolas Saltz managed about $345 million in client assets with FiNet. “What resonated with us was seeing how much LPL has evolved over the years, as well as their commitment to investing back into the business” Floe said in a statement. “The relationships we’ve built with our clients span years — some even decades — so it was important to align with a firm that will support them, both now and for generations to come.”

Independent wealth manager acquires minority stake in $390M firm

Sanctuary Wealth, an independent wealth manager, purchased a minority stake in Indianapolis-based EverNest Financial Advisors, where the firm’s two-person team led by managing partners Frank Esponsito and Niki Woodworth has $390 million in client assets. “Sanctuary’s initial growth came from advisors breaking from the wirehouse model, and they remain an important constituency for us, but going forward we’re also committed to being a major player in the M&A space, as our investment in EverNest Financial Advisors and some of our other recent initiatives demonstrate,” Sanctuary CEO Jim Dickson said in a statement. “EverNest is somewhat different from our usual partners in that they had been functioning independently for seven years.”

Jackson and Raymond James subsidiary reach RIA insurance distribution agreement

Jackson National Life Insurance and the Producers Choice Network, a subsidiary of Raymond James that consults with RIAs on annuities, reached a distribution agreement to offer the issuer’s products to more than 6,500 financial advisors using the service. “Delivering a comprehensive, unbiased planning experience through our very own OID allows us to meet the longevity planning needs of RIAs and their clients,” Producers Choice President Jamie Kosharek said in a statement. “Partnering with Jackson allows us to offer competitive, commission-free products from a carrier with a strategic focus to support the RIA community.”

Focus RIA moves to new headquarters with almost double the space

West Hartford, Connecticut-based GYL Financial Synergies, which joined Focus Financial Partners in 2016, announced plans to relocate to a new office nearly doubling its footprint at The Lexicon building in Blue Back Square. After planned renovation, the RIA intends to occupy the 9,000-square-foot space on July 1 after leaving its current 5,000-square-foot home nearby. The RIA has expanded from 12 employees in one office in 2016 to 50 in three offices in Connecticut and New Jersey. “This new location will allow us to further expand our team to support the complex and custom financial needs of our clients,” GYL Financial CEO Gerald Goldberg said in a statement.

KeyBank Wealth Management hires ex-U.S. Bank executive

The wealth management arm of Cleveland-based KeyBank and its parent firm KeyCorp appointed Solomon Schmidt executive vice president and the national executive of the Key Private Client group. In the position, Schmidt reports to Joe Skarda, the president of KeyBank Wealth Management. The 20-year industry veteran joins the firm from U.S. Bank, where he had previously been the head of the central wealth management advisor division. “Sol is an accomplished leader who has a deep understanding of the unique opportunities for advisors serving the mass affluent segment,” Skarda said in a statement. “He will meaningfully enhance our rapidly growing wealth management business.”

Wealth management M&A valuations reach a median of nearly 9 times EBITDA

M&A consulting firm Advisor Growth Strategies has released its 2021 Deal Room Study tracking 51 transactions, half of which saw firms with more than $1 billion in assets under management changing hands last year. The skyrocketing median valuations of independent firms rose 12% in 2021 to 8.99 times EBITDA, with an average transaction using 77% cash, 21% equity and 2% contingent payments. The largest acquirers accounted for 69% of the deals, even though they told the consultant they “aggressively pursued” just a quarter of potential acquisitions. “2021 was a defining year for the RIA industry,” according to the consulting firm. “New records were set in volume and valuations, but the competitive landscape has evolved from a two-lane road to a more complex highway of options inclusive of investors, platform-driven investors and integrators.”

Cetera launches retirement income planning tool as part of growth program

Under the practice growth program it launched last year, independent wealth manager Cetera Financial Group has introduced an “Advanced Time Segmentation” tool to assist financial advisors with retirement income planning. The software assists advisors in creating retirement plans and incorporating potential insurance or fund products. The tool is “a compelling resource that provides an understandable story, helping financial professionals differentiate themselves from the competition," Paul Escudero, the director of the new service from Cetera, said in a statement. "Financial professionals using ATS are retirement income experts who are well equipped to calm clients' fears of running out of money in retirement.”

UBS offers 100% remote work option for eligible employees

Starting with Global Wealth Management roles in America, UBS is offering eligible employees the option of working remotely full time under its new “Virtual Worker Framework.” The company will phase in the policy gradually over coming months. “We’re reimagining the way we work and believe this framework will provide an enhanced work-life balance for some of our employees, appeal to a more diverse pool of applicants and increase employee retention,” Tom Naratil, president of UBS Americas, said in a statement. “We recognize the world has changed, and we continue to adapt so that we can deliver the best for our clients and our people.”

Avantax recruits 24-year LPL veteran advisor with $200M

Tax-focused wealth manager Avantax recruited financial advisor Tom Sullivan after his more than two dozen years with LPL Financial. The Las Vegas-based practice, Sullivan Financial Services, managed more than $200 million in client assets with its prior brokerage. “For me, it was time for a change, to be with a firm where you don’t get lost, you’re not on hold forever, and you can get better customer service and a better overall experience,” Sullivan said in a statement.

Bitcoin mining company settles Galvin’s case for $1M

Massachusetts Secretary of the Commonwealth William Galvin is imposing a "heightened duty of care" on broker-dealers.

Without admitting or denying the allegations, U.S. Data Mining Group agreed to pay a fine of $1 million to settle charges from Massachusetts Secretary of the Commonwealth William Galvin’s office accusing the firm of sales of fraudulent and unregistered securities. The company failed to disclose earlier charges against members of its ownership and must now offer rescission payments to investors under the settlement order, according to investigators. “I can’t stress enough the importance of knowing who you’re dealing with when you invest your money,” Galvin said in a statement. “This is especially important when your investments involve Bitcoin mining and cryptocurrency, which have in recent years been popular vehicles used by scammers to defraud innocent investors.”

Connecticut launches state retirement plan using Vestwell

The 600,000 private-sector workers in Connecticut who aren’t offered a retirement plan through their employer can now get one through MyCTSavings. Employers with more than five employees that do not offer a retirement plan are required to enroll. Participation for employees is voluntary. The state of Connecticut chose wealthtech company Vestwell, which has been expanding its work in statewide retirement plans since acquiring Sumday, to power the program.