$8.2-Mln UBS Team Goes Indie with LPL Affiliate Gladstone
(Updated with comments from John E. Klaas)
Gladstone Wealth Partners, an investment advisory firm affiliated with LPL Financial, has lured a 10-person team producing $8.2 million in annual revenue in the Chicago suburbs from UBS Wealth Management USA.
The team, which is now calling itself Puzzle Wealth Solutions, previously worked from a UBS office in nearby Barrington, and moved to LPL and Gladstone on Friday, according to registration records. They had managed about $1.2 billion in assets for nearly 400 clients, LPL’s announcement said.
Reached at his new office on Tuesday, Klaas, a 32-year industry veteran and Puzzle’s CEO, said the team had initially explored launching its own independent RIA but found they would prefer the supervisory, compliance and administrative help afforded by joining a network of advisors. He said the cost of affiliating with Gladstone versus joining directly with LPL was worth it for the additional services and support.
“It’s support versus control,” Klaas said, comparing Gladstone to the wirehouse environment. “We created a partnership that gave us the ability to focus on our clients’ needs, and Gladstone has the ability to navigate the portions of the industry that the wirehouses managed for us.”
A UBS spokesperson declined to comment on the group’s departure or Klaas’ comments.
Klaas had joined UBS in 2007 after a long stay with Morgan Stanley, according to his BrokerCheck profile. He started his brokerage career with defunct penny stock brokerage Blinder Robinson & Co. in 1988 and did short stints with Integrated Resources Equity Corp. and J.T. Moran & Co. before joining Morgan Stanley in 1990.
Millington started his career with Olde Discount Corporation in 1999, did stints with Peters Securities Co. and NT Securities during the next two years, and joined Morgan Stanley in 2003, according to his BrokerCheck profile. He made the move in 2007 to UBS, the database said.
For Chester, New Jersey-based Gladstone, led by CEO Rick Frick, the addition of the Puzzle team is the latest feather in its recruiting cap. Frick, who had managed Morgan Stanley’s Philadelphia complex before joining Gladstone in 2018, said the firm recruited 34 teams last year and 28 so far in 2021, mainly from the wirehouses.
The Puzzle team is using LPL’s registration as a broker-dealer and Gladstone’s RIA, which custodies with LPL and others, for advisory accounts, Frick said.
Klaas and team will receive additional marketing and recruiting support through Gladstone’s “equity-like” partnership model, Frick said. They also have the opportunity to sell their practice as part of Gladstone and at the parent company’s valuation if it is acquired in the future.
“They open up their office, we recruit for their office, we find businesses for them to purchase, and if we ever sell, they get our valuation,” Frick said, adding that the team does not have equity in Gladstone itself.
Puzzle is the third ‘partner’ team Gladstone has brought on in the last six weeks, Frick said. A $215 million-AUM UBS team in Atlanta and a $120-AUM Merrill Lynch team in New Jersey joined Gladstone in May, according to previous announcements from LPL.
The Puzzle team also includes Steven A. Connolly, chief investment and compliance officer, Robert A. Davit, managing director; Karoline O’Connor, business development director; advisors Alexander W. Klaas and Christopher J. Sagan; and three other support staffers, according to LPL’s announcement.
One advisor who worked on the team at UBS, Benjamin Brown, is staying with the wirehouse, according to his BrokerCheck profile.