A team of five financial advisors managing $370 million in client assets at a bank that is folding into a larger institution moved to a credit union that uses LPL Financial as its brokerage.
Brokers Tim Mol, Pier Mutovic, Indya Kellman, Mike Tormey and Kimberly Trimmer generated nearly $2 million in annual revenue with Oak Ridge, New Jersey-based Lakeland Bank and the brokerage used by that institution, Raymond James Financial Services, according to Eric Armstrong of
Even before the failures of two regional institutions in March, credit unions were adapting to wealth management's continuing transition from transactional sales to "full-scale planning" more quickly than banks, Armstrong said in an interview.
"Credit unions are on a much steeper curve toward that than banks are," he said. "They operate under different rules. There's just a lot less outside pressure on credit unions right now than there is on community banks."
The advisors and their new credit union didn't respond to requests for comment on the move. A representative for Provident referred an inquiry to Lakeland, which didn't immediately respond to requests for comment on the team's departure. Representatives for Raymond James didn't respond to a request for comment either.
Banks and credit unions are driving heavy recruiting activity in the industry, with LPL's burgeoning
Banks and credit unions in general remain a new frontier for potential wealth management business, according to the latest
Between 2011 and 2022, the number of credit unions offering investment programs to customers jumped 26% to 1,066 institutions — a bump that only moved the needle from 12% of credit unions with wealth management services up to 21%. During that same span, the consolidation in banking has helped push down the number with wealth programs by 36% to 1,170 institutions, or a 25% share of banks — the same as in 2011.
After getting a reputation as a somewhat "sleepy place" in the industry, credit unions are getting much more attention from brokerages like LPL these days, Kehrer Group Partner Ken Kehrer said in an interview. Credit unions and banks are similarly showing signs of dropping some of their traditional impediments to attracting advisors, who have historically balked at the idea of joining an institution that would claim to own a broker's book of business, Kehrer said.
"Credit unions are opening branches while banks are closing branches," he said. "It appears that credit unions are a little bit more dynamic right now on the consumer front. Advisors are finding them to be very comfortable homes."
The tumult in the channel is working to the advantage of advisors, according to Mac Gardner, an industry veteran who was an advisor, wholesaler and consultant in bank wealth programs before launching financial literacy technology firm FinLit Tech. In the past, planners have operated under an assumption from their employers that "the bank's bread is buttered on the bank side," while the institutions' wealth programs and broker-dealers were "sort of ancillary," he said. That's shifting with the bank crisis and the pressure to balance sheets from high interest rates.
"Now they're like, 'Oh man, this BD side actually is pretty important,'" Gardner said. "If you're an advisor on that side, you're in a position where you're pretty darn valuable."
