Long-time UBS Broker in Maine Leads $530-Mln Team to RIA Independence
A team of four brokers in Portland, Maine, whose leader had spent his 26-year career with UBS Financial Services, left the wirehouse on Friday to set up an independent registered investment advisory firm.
“We have always felt a strong obligation to do what’s right for our clients, and there’s no doubt that being independent is the best way to execute that,” he said in an interview.
His seven-person team—which also includes advisors Joseph W. Powers, Helen Andreoli and John M. “Jack” Piper—was managing around $530 million of assets for 310 customers, Tenney said. They produced around $4 million in annual revenue, according to a person familiar with their business. Each of the advisors is an equity partner in the new firm that they have christened Great Diamond Partners, named for an island off the coast of Maine.
They are financing the new practice and getting other transition and operational support from Dynasty Financial Partners, the firm founded by former Smith Barney executives Shirl Penney and Todd Thomson that recently expanded its financing capabilities by offering to buy a small percentage of new RIA’s revenue. Firms sign short-term contracts with Dynasty to use third-party services and proprietary management and trading services it offers.
The Maine deal is the third in as many weeks that Dynasty said it is supporting. Earlier this month a Merrill Lynch Wealth team in Atlanta managing $450 million hung up their RIA shingle after signing a Dynasty contract, while a $6 billion team in Dallas from Morgan Stanley made a similar shift in the last week of April.
“We are seeing veteran advisors with 20-plus years at their firms choosing to take the road to independence, and this movement is accelerating,” Dynasty chief executive Shirl Penney said in a prepared statement.
Tenney is using Dynasty’s new financing arrangement, and said he is eager to work with clients using Black Diamond performance reporting and eMoney Advisor’s financial planning software that Dynasty has on its platform. The technology appears to be “substantially better” than what he was using at UBS, he said.
A spokesman at the U.S. wealth management arm of the Swiss bank declined to comment on his remarks.
In the six months ending in April, 109 brokers left UBS Wealth Management USA to set up competing practices, according to an internal report reviewed by AdvisorHub. The emigrants included another New England team that set up their own RIA led by Brian Mulvey, who was managing $672 million in assets.
The exodus has occurred at a time when UBS, the smallest of the four wirehouses with about 6,275 U.S. brokers, has cut its recruiting of experienced brokers and focused on improving its retention percentages.
Tenney’s colleague Powers spent 19 of his 25 years as a broker with UBS and PaineWebber, according to his BrokerCheck history. Andreoli began her brokerage career in 2000 with Morgan Stanley, sojourned at Merrill Lynch for five years and joined UBS’s Portland office in 2011, according to her BrokerCheck data. Piper worked for the first seven years of his career at Newbury Street Capital L.P. in Boston before joining UBS in Maine almost four-and-a-half years ago.
Great Diamond is recommending that its customers custody their assets with Charles Schwab & Co. The partners are retaining their brokerage licenses through Purshe Kaplan Sterling Investments, a broker-dealer that specializes in RIAs who want to keep brokerage registrations in order to collect “trailing” fees paid by mutual fund and annuities companies.