A Northwestern Mutual team with five advisors and $600 million in assets under management dropped their broker-dealer of more than 20 years to launch their own RIA with TD Ameritrade Institutional.
Founding partners Eric Raether and Ernie Moosherr of Canopy Wealth Management left Northwestern to avoid proprietary product minimums and incentives in the future, Raether says. The practice, which has offices in suburbs outside Detroit and Madison, Wisconsin,
Raether and Moosherr gave up their securities licenses, placing them among 56,000 representatives only registered as investment advisors,
The two Canopy founders spent a combined 54 years affiliated with Northwestern after joining when the firm still owned regional brokerage Baird. The vast majority of Canopy’s business comes from advisory accounts, Raether says, though he notes that a lot of clients were not very familiar with RIAs.
“As we’ve explained it, the response has been exceedingly positive,” Raether says. “Even though the [Department of Labor] rule is effectively dead, the lasting legacy of that is that clients have heard of ‘fiduciary’ and are asking more questions about fiduciary and fees.”
Thirteen of the top 25 companies generated double-digit growth in 2017 as rivals close in on the perennial No. 1 firm.
Northwestern spokeswoman Betsy Hoylman declined to comment, saying in an email that the firm doesn’t discuss advisors who have moved on.
Partner David Muehl works alongside Raether in the Middleton, Wisconsin-based office, while fellow partner Rick Mida and advisor Joe Mayone operate under Moosherr in the Southfield, Michigan-based office.
Muehl came to the firm in 2011 after nearly 10 years with Merrill Lynch, according to FINRA BrokerCheck. Mida started his career with Northwestern in 2010. The practice has four other employees.
TD Ameritrade serves as “pretty much our sole” custodian, according to Raether, who predicts the migration of assets from Northwestern’s custodian, Pershing, will take about two months. He recommends any advisors planning a jump to full RIA status set aside at least six to eight months.
“If you’re going to go independent RIA, you’re going to have to realize that a lot of more of the onus is on you,” he says, noting back-office services and software vendors as major new areas of work for transitioning advisors. “If you want to move fast, setting up an RIA is probably not the way to go.”
