$1.6-Mln Wirehouse Vet Waves Goodbye to Morgan Stanley, Hello to LPL Affiliate Gladstone
A 23-year wirehouse broker shed his Morgan Stanley jersey on Friday to move to an independent registered advisory firm affiliated with LPL Financial in Blue Bell, Pennsylvania, according to an announcement.
Frick had known Ciocari from his days managing around 10 Morgan Stanley branches in Philadelphia, including Blue Bell, before joining Gladstone in December 2018. Frick said that the Covid-19 pandemic and remote-work era has made it easier for brokers to make the leap to running their own practice.
“They realized that they’re having really good years and are keeping their clients while everyone is working remotely,” Frick said. “You can go independent, own your own business and increase your payout.”
A Morgan Stanley spokeswoman confirmed the departure but declined further comment. Morgan Stanley executives have bragged that the rate of advisor attrition is around 2%, down from around 4% in 2015.
Ciocari felt more comfortable making the leap after seeing a $2 billion-asset New Jersey team, John W. Gallagher and Mark T. Levin, join Gladstone from Morgan Stanley in November 2020, Frick said.
Gladstone entices recruits with payouts of 80%, Frick said. That’s well above the 45% to 50% that high-earners at a wirehouse could earn, but unlike at employee firms, brokers must then pay for their own real estate and other operating expenses.
LPL also pays Gladstone recruits bonuses of 10 to 15 basis points on assets under management that move to LPL’s custody platform. That’s less than the 30 to 50 basis points that LPL pays brokers who affiliate directly rather than affiliating with an intermediary such as Gladstone, but Ciocari and other brokers are willing to give up some pay for the peer network, recruiting and marketing help that Gladstone offers, Frick said.
Ciocari also joined Gladstone’s ‘partnership’ model meaning that he will have the opportunity to sell his practice as part of Gladstone if the company is acquired.
Gladstone currently has around 120 brokers who manage about $7.5 billion in customer assets, Frick said. It recruited 34 brokers last year and recently surpassed that number already this year.
In a separate wirehouse breakaway, a former UBS broker Barry P. Mitchell has left UBS to start his own registered investment advisory firm, according to an announcement. Mitchell, a 33-year broker who managed $850 million in assets, launched Next Level Private in Harrison, New York.
“[A]s an independent RIA and fiduciary, we are free from previous proprietary constraints and have a lot more available to us in terms of research, investment solutions and technology that can put our clients in a better financial position,” Mitchell said in a prepared statement.
He moved along with six client associates who had been part of his team, Mitchell WealthCare at UBS, and is adding a seventh support staffer.
Mitchell’s BrokerCheck and SEC investment advisory licenses still reflected his employment at UBS as of Wednesday, according to both databases.