LPL Lures Merrill Team with $650 Mln-AUM to Nascent Breakaway Channel
A four-broker team in Greenville, South Carolina has left Merrill Lynch to launch an independent practice affiliated with LPL Financial’s fledgling Strategic Wealth Services model for wirehouse breakaways.
They had managed $650 million in client assets at Merrill and are the sixth team to join the SWS channel since its launch in April 2020, an LPL spokeswoman confirmed.
LPL, the largest independent broker-dealer by its more than 17,000 reps, added the new structure to appeal to higher-end wirehouse teams who receive additional transition, marketing and business management support in exchange for a lower payout than if they utilized LPL’s traditional independent channel.
Brown, who started his brokerage career in 2000 with Merrill, according to his BrokerCheck said in a statement that the team was looking for “someone to handle the back office, negotiate on the lease, order furniture, and build our website, among other things.”
“LPL Strategic Wealth Services really allows us to simplify our business and have the strategic support so that we can really focus on our business and strip away some of the noise,” said Brown, who ranked 11th on Forbes Best-in-State Wealth Advisor in 2021.
Thompson also started with Merrill in 2000, left for a stint with Raymond James & Associates in 2009 and rejoined Merrill in 2016, according to BrokerCheck.
Gray had joined Merrill in 2014 and Cluverius, who started his career with Raymond James & Associates in 2016, joined Merrill in 2018, according to the broker database.
The NorthEnd team said it went independent in part because it wanted to recruit other independent advisors and acquire books of business to expand. LPL provides transition assistance for teams to make offers to recruit other brokers and also provides leads and capital when it comes to acquiring books.
“Most wirehouse teams want turnkey support when they’re transitioning,” said Louis Diamond, an industry recruiter with Diamond Consultants who placed the team. “I would expect this will draw out many others.”
Diamond declined to comment on specifics of the offers, but recruiters have said previously that LPL typically grants upfront “transition bonuses” of 30 to 50 basis points of the assets that brokers joining its core independent channel are expected to move from their former firms.
In a testament to its recruiting appetite, LPL’s end-of-year recruiting loan balances were up 24% to $419.2 million as of December 31, 2020, from 12 months earlier, according to its annual report filed in February.
Conversely, Merrill Lynch has frozen veteran broker recruiting in favor of a less costly model of promoting internal growth and training and hiring novice advisors with around 10 years of experience. But it has experienced a steady stream of exits of multi-million dollar teams this year.
It last month won a partial TRO against a Tennessee team who moved to Wells Fargo Advisors and who had allegedly attempted to solicit bank customers in violation of the Protocol for Broker Recruiting.
A Merrill spokesperson did not immediately return a request for comment.