Oppenheimer Plans Indie Channel, Shifts California Managers
Oppenheimer & Co. is creating an independent brokerage channel to bolster its traditional wealth management business, according to sources familiar with its plans.
The project is being led by Derek Bruton, the former head of national sales at LPL Financial, who joined Oppenheimer in 2016 and had been branch manager of its Newport Beach, Calif., office. That office is now under the baton of Michael Casey, a former Merrill Lynch manager in Las Vegas who joined Oppenheimer last month, according to his BrokerCheck history.
Bruton, who is working out of San Diego, has been registered since last summer with Freedom Investments Inc., a wholly owned Oppenheimer subsidiary formed in 1994 to provide online discount brokerage services, according to regulatory filings. It is expected to be the broker-dealer for the independent firm, which could be unveiled as early as this spring, said several sources who requested anonymity because they are not authorized to speak for the firm. An Oppenheimer website lists the Newport Beach branch as the Office of Supervisory Jurisdiction for its San Diego-based business.
Oppenheimer, whose traditional brokerage force had slimmed by 12% over the past two years to just over 1,100 at yearend 2017, is hoping to attract some of the growing number of brokers who are seeking more autonomy and higher payouts by going independent, said the sources.
The self-clearing firm also may be hoping to offer its “hybrid” broker-dealer model as an alternative to its own brokers who may be dissatisfied with the firm but want the familiarity of its back office, they said.
Bruton played a role in developing LPL’s hybrid model, which allows independent brokers and registered investment advisers to use LPL or other firms as custodians for their RIA clients’ assets, they said.
Bruton did not return a call for comment on Wednesday, and declined to comment on his activities when asked about Freedom several months ago.
A spokeswoman for Oppenheimer said the firm had no comment on plans for an independent channel nor on its California managers.
Bruton was “permitted to resign” from LPL in April 2014 over unspecified “concerns” about his “interactions with other employees,” according to his separation agreement that was filed with the Securities and Exchange Commission. It said that he agreed to give up all his unvested stock options and stock, and to forego the company’s severance plan benefits.
His BrokerCheck record, which says he first registered in the securities industry with Charles Schwab & Co. in 1996, has no customer, regulatory or financial disclosures.