First Republic Bank Recruits Six-Member Advisory Team Days Before Crash, NewEdge Capital Group Recruits Record $9 Billion In 2022, LaSalle St. Securities Launches Equity-Based Advisor Ownership Program, Altruist Acquires SSG Custodial Platform And More
This edition of Transitions, Transactions & Promotions captures several surprising twists in the below recruitments, acquisitions, strategic partnerships and executive appointments. In addition to recent developments that we explore here for the first time, we also add fresh perspectives to some of the major moves that WSR reported during the past month. Here are the details:
Advisor Transactions
1. NewEdge Capital Group Recruits $9 Billion In Expected AUM For Full-Year 2022
Pittsburgh-based NewEdge Capital Group reported record full-year 2022 growth in recruited client assets and advisor teams, with $9.1 billion in expected new assets under management (AUM) last year. The firm encompasses the broker-dealer NewEdge Securities, the wealth management service NewEdge Wealth, which added 16 ultra-high net worth advisors, and the advisor platform NewEdge Advisors, which added 23 teams in 2022.
Why it matters: Last year’s recruitments bring NewEdge Capital Group to approximately $32 billion in total client assets and more than 300 financial advisors, representing impressive growth for a company that launched in October 2021. At the start of 2022, NewEdge Capital Group appointed former UBS Wealth Management Americas CEO Bob McCann as Co-Chairman. Its affiliation models include supported independence and flexible employee models.
“Our rapid expansion tells a story about successful advisors partnering with a firm that supports their growth on their terms,” Alex Goss, a Managing Partner at NewEdge Capital Group and Co-CEO and Co-Founder of NewEdge Advisors, said in the press release. “The NewEdge advantage delivers solutions that allow advisors to take control of the client experience while enjoying the margin, freedom and flexibility of an RIA — without having to expend the time and resources to run one.”
To learn more, view the press release here.
2. LPL Recruits Merrill Lynch Advisor, Legacy Financial Group From Voya
LPL Financial’s recent recruitments include an advisor from Merrill Lynch and a team from Voya Financial Advisors. Phoenix-based Thom Maher oversaw approximately $440 million in assets at the wirehouse. Albuquerque, New Mexico-based Legacy Financial Group oversaw approximately $225 million at Voya, which had $741 billion in client assets as of Dec. 31.
Why it matters: These are just two of the seven recruitment deals that LPL announced during a 30-day period, which also included advisors from Merrill Lynch, Wells Fargo, Edward Jones and AIG Retirement Services. Together, these seven deals are poised to bring in an additional $3 billion in assets for LPL.
“At LPL, we understand our advisors and the advice industry because it’s our sole focus,” Scott Posner, LPL Executive Vice President, Business Development, said in a press release. “We are committed to providing advisors with ultimate flexibility and personalized modern solutions as they build their perfect practice.”
To learn more, view the press releases here and here.
3. First Republic Recruits Advisor Team Mere Days Before Bank Suffers Major Crash
Century City, California-based advisors Alexander Kadish, Nicholas Davey and J.P. Garofalo led a six-person team to leave Morgan Stanley for First Republic Investment Management in a recruitment that the company announced less than a week before First Republic Bank’s stock price plunged amid the recent banking crisis. Kadish has over 20 years of experience, Davey has over 15 years of experience and Garofalo has 10 years of experience.
Why it matters: In the aftermath of the rapid-fire failures of the regional Silicon Valley Bank and Signature Bank in the U.S. and the bailout of much larger global bank Credit Suisse by the Swiss National Bank, First Republic Bank experienced massive deposit outflows, an 82% drop in its stock price and saw ratings agencies downgrade its credit to junk. On March 16, First Republic announced that it was considering a sale while several global banks entered talks to bolster its capital position.
“Alexander Kadish, Nicholas Davey, J.P. Garofalo and their team are a terrific addition to our growing wealth management capabilities in Los Angeles,” Bob Thornton, President of First Republic Private Wealth Management, said in the press release. “They share First Republic’s commitment to exceptional client service.”
To learn more, view the press release here.
4. Raymond James Recruits $450 Million Wisconsin Team To Employee Channel
A Racine, Wisconsin-based father-son duo of advisors joined the employee channel of Raymond James from Wells Fargo, where David “Dave” Gwidt and Paul Gwidt managed over $450 million. Their Gwidt Wealth Management Group also includes Geoff Grabiel, a senior registered client associate.
Why it matters: Dave Gwidt has nearly 35 years of financial services experience, previously working at Lehman Brothers and Salomon Smith Barney. Paul Gwidt, who holds the CFP designation, has six years of experience and previously served as a CPA. During the past five months, the Raymond James Wisconsin Complex also recruited three other advisors overseeing a combined $250 million in client assets.
“Raymond James’ emphasis on the client-advisor relationship, paired with leading resources, support and innovative technology, has helped drive our recruiting success in Milwaukee and surrounding communities,” Dominic Prioli, Great Lakes regional director for Raymond James & Associates, said in the press release. “We welcome Dave, Paul and all of our recently joined advisors to Raymond James and can’t wait to see what they will achieve.”
To learn more, view the press release here.
Mergers & Acquisitions
5. Creative Planning Acquires $1 Billion Telarray Advisors In Memphis, Tennessee
Overland Park, Kansas-based Creative Planning acquired Memphis, Tennessee-based Telarray Advisors, which has approximately $1 billion in AUM. Founded in 2005, Telarray has 18 employees and grew out of an accounting firm that Cliff Paessler and Andy Shaul launched in 1993. Creative Planning manages or advises on over $225 billion in assets across all 50 states and 65 countries.
Why it matters: Creative Planning won a WSR Wealth Exemplar Award for Upper-Mid-Sized Deal on its January 2022 acquisition of La Mesa, California-based Reilly Financial Advisors, which had over $2 billion in AUM. In August, Creative Planning also acquired Wipfli Financial Advisors, which had $5 billion in AUM, from the major CPA and advisory firm Wipfli LLP.
“Partnering with Creative Planning is a perfect match for Telarray,” Richard Paessler, President and Chief Compliance Officer of Telarray, said in the press release. “We were looking for a firm that aligned with us in planning philosophy, culture, employee opportunities, and that provides an immediate expansion in our service offering for both our existing and future clients.”
To learn more, view the press release here.
6. Stratos Expands Into Majority Ownership Of $348 Million First Wealth
Beachwood, Ohio-based Stratos Wealth Partners expanded its stake in Clinton, Iowa-based First Wealth Financial Group into majority ownership. First Wealth services more than $348 million in client brokerage and advisory assets. Stratos oversees a total of $16.5 billion in advisory, brokerage and third-party managed assets across 275 independent advisors and 87 locations nationwide.
Why it matters: This deal demonstrates how a strategic investment can bolster a succession plan after unanticipated issues with key personnel. Andrew Meyers, an advisor with First Wealth since 2011 who recently assumed a leadership position as part of a planned succession process, became President of the firm after the unexpected death of First Wealth Founder and CEO Breton Williams. Meyers and Senior Client Service Representative Cari Bush implemented a plan that Williams had instituted so clients could have a seamless transition process.
“I want to assure our clients that First Wealth’s team of advisors and staff is committed to providing the valued investment advice and financial planning care they have become accustomed to,” Meyers said in the press release. “Our strengthened partnership with Stratos will allow us to build an even greater business and provide additional services to these loyal clients.”
To learn more, view the press release here.
7. Altruist Acquires SSG Custodial Platform, Potentially Doubling Size Of RIA Offering
Altruist, a custodial platform serving more than 1,500 RIAs, acquired Shareholders Service Group (SSG), whose brokerage and custodial platform serves more than 1,600 RIAs. Altruist anticipates that the deal will accelerate the 400% year-on-year growth rate it experienced in 2022. Broadhaven Capital Partners advised SSG on the transaction, which is subject to regulatory approval.
Why it matters: SSG has a partnership with Pershing, a Bank of New York Mellon company, which will remain in place. This effectively gives Altruist stronger backing through a global institution. According to Altruist, the benefits of its enhanced all-in-one custodian and RIA platform include significant savings of time and money for advisors.
“When we started SSG in 2002, our goal was to be the most dependable and trusted partner to advisors, based on transparency in our pricing and service, and efficiency in our brokerage and reporting tools,” SSG Founder and CEO Peter Mangan said in the press release. “Today we are very excited to be joining with Altruist in writing the next chapter in the RIA custody business as we empower advisors with the most cutting-edge technology and service platform.”
To learn more, view the press release here.
Strategic Partnerships
8. LaSalle St. Brings On UBS Advisor After Launching Equity-Based Advisor-Ownership
Cari Schulz, a former UBS financial advisor, joined LaSalle St. Securities as an advisor-owner shortly after the firm announced an equity-ownership program for its affiliated and qualified representatives and advisors. LaSalle St. offered existing reps and advisors a significant percentage of its equity in a transaction that closed at the end of January.
Why it matters: Buckeye, Arizona-based Schulz manages approximately $100 million in AUM, previously served as a portfolio manager at Morgan Stanley and has 30 years of financial services experience, so LaSalle St.’s new business model appears to be attracting successful advisors. The Chicago-based family of companies includes an independent broker-dealer, two RIAs, as well as an annuity and insurance products provider. It supports more than 300 advisors and has approximately $12 billion in total client assets.
“My goal was to find a firm that would allow me to run my practice my way, while at the same time, provide me and my clients with the tools and support services to scale and grow,” Schulz said in a press release. “In addition, the firm’s new advisor equity ownership program is a game changer within our industry, and I was excited to become an investor and owner in the company shortly after joining.”
To learn more, view the press releases here and here.
Promotions & People Moves
9. SEIA Appoints Ahmed Hassanein As Chief Financial Officer
Signature Estate & Investment Advisors hired financial industry veteran Ahmed Hassanein as Chief Financial Officer based in SEIA’s Century City, California headquarters. He takes over SEIA’s CFO duties from Gary Liska, a founding partner and active financial advisor. Unlike Liska, Hassanein serves as a full-time CFO appointee.
Why it matters: SEIA is in the process of consolidating its business lines under a single holding company. Hassanein is responsible for handling SEIA’s heightened requirements for financial reporting and regulatory filings while also positioning the company for greater scalable growth. Hassanein previously served as Chief Accounting Officer at Cetera from 2011 to 2016 and then at Advisor Group from 2016 to 2020. SEIA and its affiliates managed approximately $16 billion in assets as of Dec. 31.
“Ahmed brings the precise experience needed to help SEIA reach the next stage of its growth trajectory. He’s helped businesses prepare to scale by building teams and developing processes and systems,” Liska said in the press release. “I couldn’t hand the reins to a more qualified person. I’m looking forward to turning my full focus to my practice and growing alongside the rest of the firm.”
To learn more, view the press release here.
10. Sheldon Cummings Joins Smarsh Overseeing RIA And Broker-Dealer Unit
Smarsh, a digital communications oversight technology provider, hired Sheldon Cummings as General Manager of its corporate business unit supporting RIAs and independent broker-dealers. Cummings has over 25 years of experience serving small and midsized firms, previously as Chief Operating Officer for Mailchimp, Vice President of Sales at Intuit, and in Director positions at Kraft Foods and Mondelēz International.
Why it matters: Smarsh serves more than 6,500 customers worldwide, including global financial institutions and multinational investment banks. Cummings also is the most recent executive-level hire of a diverse background at Smarsh. In November, the company appointed Mike Cagle as Chief Financial Officer and Leander LeSure as Chief People & Diversity Officer. In June, Smarsh announced the appointment of its CEO, Kim Crawford Goodman, who recently won a WSR Pathfinder Award for Black CEO of the Year.
“The volume and variety of digital messages flowing through various workplace and personal communication platforms grow at an unthinkable rate each day,” Cummings said in the press release. “Financial services firms, in particular, need a proven industry leader to help mitigate the risk exposure related to these communications.”
To learn more, view the press release here.
Chris Latham, Deputy Managing Editor at Wealth Solutions Report, can be reached at clatham@wealthsolutionsreport.com
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