After adding its largest team yet exiting the independent channel, Janney Montgomery Scott is ahead of its recruited client assets from each of the previous two years.
Financial advisors Joseph Chornyak Sr., Robert Mauk and Joseph Chornyak Jr. of Chornyak & Associates left Commonwealth Financial Network to join Janney in Columbus, Ohio, the regional firm said on June 4. The team manages more than $1.4 billion in client assets, and the elder Chornyak says the team will grow more quickly under Janney.
Counting the billion-dollar wirehouse breakaway team
Chornyak’s eight-employee team had spent a dozen years with Commonwealth before making the rare so-called reverse breakaway move to employee status from prior independence.
“We run our practice the same way we ran our practice several days ago,” Chornyak Sr. said in an interview. “The name on the door is slightly different because they're our partner and we are their partner and we're in it together. This is not your typical cross-over or reverse cross-over. This is a partnership and it has to be.”
Representatives for Commonwealth confirmed the team’s June 3 exit. “As a friend and business partner, I appreciate all that Chornyak & Associates brought to our community over the past 12 years and we have enjoyed supporting their tremendous growth during this time,” Commonwealth COO Trap Kloman said in a statement. “We wish the team continued success.”
The traditional industry polarization between independent wealth managers like Commonwealth and employee-channel firms has been breaking down in recent years, according to the elder Chornyak and Tony Miller, Janney’s chief administrative officer. The subsidiary of The Penn Mutual Life Insurance has 870 advisors, each operating as independent companies despite being W-2 employees, Miller says.
While most of Janney’s recruits come from wirehouses, many independent teams are also looking for more back-office administrative services and resources around needs like succession planning, he says.
“We have seen more and more interest of late from people that have been in an independent BD or the RIA space,” Miller says. “They have grown and been so successful that you start to spend more and more time in your business away from what got you into the business in the first place.”
After more than 40 years in the industry for the elder Chornyak, 28 for his son and 35 for Mauk, the team became wary of the increased regulatory burden of recent years, along with tasks such as payroll, employee benefits, phones and technology, Chornyak Sr. says. The team had spent 20 years with Advisor Group’s Royal Alliance Associates before going to Commonwealth in 2009, according to FINRA BrokerCheck.
Besides the three advisors, the practice includes private client associates Cory Frazier, Joyce Zinader and Jodie Creagan, as well as account executives Teresa Frazier and Carol Staton.
“We've always tried to be on the cutting edge,” Chornyak Sr. says. “It became glaringly apparent to us that there are only so many hours in the day. We're best at being in front of clients and helping clients.”
Janney is the first employee-channel firm this year to recruit a formerly independent team with at least $1 billion in client assets, according to Financial Planning’s tracking of company recruiting announcements. In addition to
