(Yet Another) Merrill Exit – This Time $15M in NY

Merrill Lynch seems to be playing an ugly game of “Taureau, Taureau” with its top wealth management teams and financial advisors. Adapt to the new strident culture or don’t. It’s too bad that the strength of the bull that Merrill has been known for has its best people running for better brighter horizons. The departure of White Plains, NY-based Reinstein Nelson Group for First Republic is yet another important departure of a highly regarded and awarded team. 

Roger Gershman, familiar with the team remarked, “the Reinstein Nelson Group got a phenomenal deal with First Republic as we watch the stampede out of Merrill Lynch. Maybe Merrill will wake up and begin to understand how important culture and those that have served the firm for years over years are, or not. First Republic clearly cares about talent and culture, not to mention high touch service. The returned focus on banking at Merrill isn’t paying off.”

The nine-person team had been with Merrill since 1998 and is led by Managing Directors, Harold Reinstein and Michael Nelson who’ve been chosen by Forbes as the “Best-in-State Wealth Advisors” for 2018, 2019, and 2020. Other members of the team are: Daniel Sirota, Senior Vice President and Senior Financial Advisor, Pascale Hainline, Senior Vice President and Senior Financial Advisor, Kimberly Ann Ferry, Senior Vice President and Senior Financial Advisor, Mary Jane Wolfson, Assistant Vice President and Investment Management Specialist, Amanda McNulty, Senior Wealth Management Client Associate, Oleg Zubarev, Wealth Management Client Associate, and Erika Jenkins, Wealth Management Client Associate. 

Throughout the years advisors on the team have been recognized by: 

  • Barron’s Top 100 Financial Advisors
  • Financial Times 400 Top Financial Advisors
  • Financial Times 401 Top Retirement Advisors
  • Forbes Top Women Wealth Advisors
  • Forbes SHOOK Best-in-State Next Generation Wealth Advisors
  • And more…

Perhaps First Republic will allow the team to continue to execute on the high client service model their clients have come to expect. 

Merrill Lynch Advisors Trust The Gershman Group To Handle Their Transition

As a years-long exodus from Merrill Lynch seems to continue unabated, one recruiting firm has emerged as a leader amongst those seeking to find greener pastures across the wealth management landscape: The Gershman Group.

By the numbers, more than $200B in client assets have migrated away from Bank of America and Merrill Lynch in the past few years. As long-tenured advisors managing those assets seek to find firms that meet their clients’ needs, they’ve routinely turned to one company to manage that process on their behalf.

The Gershman Group, with over 50 years of wealth advisory recruiting. As a family company, Norman Gershman founded the firm after a 25-year career at Merrill Lynch.

“Our goal is never to urge a team to leave their current firm as the first option but only as a Plan B. An evaluation of their current firm is an important part of the process.” Says Roger Gershman, the firm’s CEO who, like his dad, spent 25 years as an advisor at prestigious firms like Hambrecht & Quist and UBS PWM.

“The wealth management landscape is rife with ‘top of the market’ opportunities for advisors of scale at large banks, boutiques, and independence. I spend much of my day answering many similar questions:

  • Why did they leave?
  • What was the economic package?
  • Bank vs Boutique vs Independent?

Not only are we seeing record economic structures but successful transitions of 80% of assets or more within literally 45-60 days vs the old days of 6-9 months or longer.” says Roger Gershman.

Quotes a former ML Advisor: “TGG was extremely knowledgable about my choices of platforms and helped me negotiate the highest possible deal.”

Their history as a family company within wealth management is unique and has engendered trust amongst Merrill Lynch advisors for decades. Advisors have come to see The Gershman Group as a bespoke organization that makes connections at every touchpoint in a potential transition: confidential concierge private meetings; deal construction; platform due diligence; legal contract language; and even negotiating banking referrals baked into deals.

“What we have found is that when advisors question BOA’s dedication to Merrill’s traditional advisor-centric culture, they reach out to us for an objective opinion about what is really going on there. Exploring other competitive platforms and having a Plan B is a healthy exercise that may just offer a better supportive working environment for them, their families and certainly for the better interests of their clients ” – Roger Gershman.

Sponsored by The Gershman Group

The original release can be found here.

Merrill Lynch’s Andy Sieg Whistles Past The Graveyard On Advisor Recruiting

There really should be memes created in honor of Andy Sieg. If there was ever a bigger corporate shill for a brand now owned by its banking overlord – it’s Mr. Sieg.

Up is down, down is up. Night is day, day is night. And the best part is, he’s so committed to the messaging that nobody other than his bosses believes.

A quick reminder that all the biggest teams and producers at legacy Merrill have been pulling the escape hatch for half of a decade now. Over and over and over again. Nearly $250B in client assets have left the firm in the past five years.

But Andy thinks that big recruiting deals are poppycock and should be frowned upon to the benefit of nameless, faceless shareholders.“We are seeing very elevated multiples for advisers as they are being recruited firm to firm,” Sieg said at the RBC Capital Markets Financial Institutions Conference. “When we see some of the levels of competitive recruiting deals, it’s very challenging that they’re going to produce threshold returns for shareholders.”This kind of inane commentary infuriates the best advisors that are left at the firm. And the thousands upon thousands of bank brokers and rookies that are replacing them are pre-programmed to fall in line.

Get out of Merrill and go get paid. Andy Sieg doesn’t care about you.

COVID Mandates Infuriate Advisors; Big Banks Aren’t Actually ‘Following The Science’

COVID-19 quickly became a politically charged topic as it found its way into every corner of our lives. We aren’t here to talk politics, but rather the realities faced by advisors and unnecessary mandates being enforced at their places of employment.

At different firms across Wall Street, there are varying degrees of mandates and penalties for advisors that have chosen not to get the proverbial ‘jab’ for whatever reason. On top of those arbitrary rules, you also have firms forcing advisors to spend certain amounts of time in the office, no matter if it is meaningful to their business and growth.

A quick list of what advisors are dealing with in regards to COVID-19:1. If you are unvaccinated you could be fired. (**since been backed off of)
2. If you are unvaccinated you are disallowed to meet in person with clients.
3. If you are vaccinated, you have to be in the office a minimum of three days per week.
4. Vaccination status may indirectly affect bonuses and promotions.

Each of the above responses to COVID-19 is dramatic overreaches that don’t match even the latest (flawed) CDC guidelines.I think that one could make the case that these guidelines are coming from bank legal departments rather than directly connected to any sort of science. And, as per usual, the mandates are putting undue burdens on advisors unnecessarily.

We continue to hear significantly grumbling from advisors with respect to not just a new normal here – but rather banks and brokerages taking advantage of a crisis to control advisors. Given that the very nature of being a financial advisor is largely entrepreneurial, the likes of J.P. Morgan and Merrill Lynch (Bank of America) should back off.

Large Team At J.P Morgan Securities Decamps For Morgan Stanley In NYC

Yet another large team in a money center city at J.P. Morgan Securities just left the firm for Morgan Stanley. We doubt you’ll be surprised as to why they decided to migrate to their new firm.

Joel Bodner and Mark Horowitz have taken their $750M in client assets and more than $5M in annual production to Morgan Stanley based on the chasm that exists between the two firms with respect to technology, platform, and client service.

Prior to joining J.P. Morgan in 2015, Mark served as Principal at Bernstein Global Wealth Management for nearly 12 years. A is known as a talented advisor who is very highly respected in his community from wealth management and his philanthropy, writing books, and speaking series. Mark dedicates a significant portion of his free time to poverty alleviation. Through the Mesila organization, a nonprofit focused on guiding families toward fiscal responsibility, he has traveled around the world, raising public awareness about the importance of financial stability and independence. Mark is also involved with Sister-to-Sister, a group founded to help widows and divorcees regain their financial footing. He volunteers with Professional Career Services, a nonprofit that offers low-cost career training and education. In addition, Mark serves as Chairman of the Board of BINA, whose mission is to provide guidance and support to thousands of brain injury survivors and their families.

Joel joined J.P. Morgan in 2015, as a Vice President and Wealth Advisor with J.P. Morgan Wealth Management. As the key Portfolio Manager with over 15 years of experience in the financial services industry, Joel creates tailored investment strategies and comprehensive wealth management plans for high-net-worth individuals, families, and institutions. Joel began his career as an Associate at Merrill Lynch in 2002.  Joel is an active member of his community on the South Shore of Long Island, New York, where he lives with his wife and three kids. Joel sits on the board of his Temple and on the board of TOVA, an organization that provides adult guidance and mentoring services for children who need additional supportive, caring adults in their lives.

Mr. Bodner and Mr. Horowitz will be joining Jeff Reiss, Complex Manager, Morgan Stanley in Long Island, NY. Mr. Reiss is known amongst his colleagues as an ‘advisors manager’ who aims to work tirelessly on behalf of the advisors he is charged with leading.

Over the past decade, there has been a common theme at J.P. Morgan Securities – disappointment. JPMS has taken a back seat in every meaningful category as a forgotten division within the global investment bank. Technology is lacking, offices and facilities are outdated, and the ability to cut through red tape is nearly impossible. Other than the name of the firm, there is little reason for teams the size of Mr. Bodner and Horowitz to remain.

One specific issue that was noted recently was the looming and ongoing problems associated with the JPM Private Bank taking larger accounts away from JPMS advisors. See article from AdvisorHub.

Irrespective of long-term relationships with one client or another, JPM Private Bank advisors are prioritized and handed accounts directly out of the book of JPMS teams. That is certainly enough to drive ambitious advisors into the welcoming arms of competitors like Morgan Stanley.

Merrill Concocts Feeble Recruiting Strategy (but only if you’re a bank broker)

Let’s play with a little math, shall we? In the past 90 months, Merrill Lynch has lost $230B in client assets due to advisor attrition. Yes, that’s billion with a ‘B’.In 4 1/2 years, based on publicly available data, Merrill has lost the equivalent of 230 billion dollar teams. That is incredible. It’s almost unfathomable.

Their completion at UBS, Morgan Stanley, Rockefeller, and even Stifel have feasted on Merrill lifers now for years. And the eatin’ has been good.

So what is Merrill leadership’s current response? A just rolled out to the field memo, that will compensate market managers to recruit advisors with LOS’ under 12 years that hail from the likes of banks and credit unions. Banks and credit unions. Seriously.“It is difficult to put into words the lack of brand loyalty that no longer exists at Merrill Lynch amongst the remaining advisors and teams. I’d estimate that more than half of large team movement in the industry is coming from one firm – Merrill Lynch. In my thirty years in the business as an advisor and recruiter, I’ve never seen anything like it.” – Roger Gershman, CEO of wealth management recruiting firm The Gershman Group.

Each weekend there is another announcement of a large Merrill team migrating elsewhere. It’s become the one constant in an industry that’s been booming for nearly a decade now.

The only ‘bust’ that anyone can find in this section of the financial world is the once proudest brand on the street: Merrill (formerly known as Merrill Lynch).

RIAs All Over the Map on Crypto as Offerings, Risk Disclosures Abound

As consumer interest in cryptocurrency investing has surged in recent years, registered investment advisory firms are warming slowly to an asset class that its more reserved proponents see as a risky proposition for clients and what its most fervent evangelists have compared to the invention of the wheel.

In recent months, an increasing number of RIAs have moved beyond client education to actually offer crypto investing to some of their customers with higher risk tolerances, said Ben Cruikshank, head of MassMutual-owned Flourish Crypto, which provides RIAs with crypto investing, trading, integrations and compliance help. Many are driven by a sense of competition.

“RIAs are seeing their accumulator clients, their next-generation clients, having an account at Coinbase–which has 72 million verified users–and taking money away from them,” Cruikshank said. “They want to bring those assets back in-house, have visibility into those accounts–that’s very much a key driver.”

Some, such as Ritholtz Wealth Management in New York or Halbert Hargrove in California,  which manage $1.8 billion and $2.7 billion in assets, respectively, have jumped in to create their own funds or offer separately managed accounts.

Even some holdouts are changing their tune, according to a review of Securities and Exchange Commission filings. Rockford, Illinois-based Savant Wealth Management, which manages $10.8 billion in assets, wrote in a December ADV that it does not recommend cryptocurrency, which it considers a “speculative” investment. But a Savant spokeswoman said in response to a reporter’s questions that they’re “actually very close to updating that language and doing a pilot of an offering.”

The anecdotal uptake comes as 16% of advisors reported allocating to crypto in client accounts, up from 9% the year before, according to a recent survey by Bitwise Asset Management and ETF Trends. Ninety-four percent of advisors received questions from clients about crypto in 2021, up from 81% the year before, according to the study, which surveyed 619 advisors, 45% of whom were independent RIAs.

Different Strokes

At the same time, lawyers and consultants who work with RIAs on crypto compliance said that adoption is still at a very early stage. Many are still treating cryptocurrency essentially the same as wine, jewelry, or art collections when crafting financial plans.

“I would say that the number of advisors actively recommending and investing directly in digital assets remains quite low,” Max Schatzow, partner at law firm RIA Lawyers, wrote in an email.

For example, Carson Wealth, Ron L. Carson, Jr.’s eponymous $20 billion-plus-asset RIA in Omaha, Nebraska is staying out of the fray. They provide educational materials from a custodian or in-house if customers ask, but have no timeline for offering their own products, according to Jamie Hopkins, managing partner of wealth solutions at Carson.

Carson and others are holding tight and waiting for a combination of regulatory clarity, better products, availability of professional liability insurance coverage, the approval of an “easy-button” option such as a spot bitcoin exchange-traded fund (ETF), or more meaningful price histories before entering the fray, Hopkins said.

“It’s a little different from a traditional securities investment, where we have somewhat agreed-upon standards on how to review investments,” Hopkins said. “I would expect that we will someday have a crypto-type offering, but what does ‘someday’ mean? Because it’s not tomorrow.”

Still, despite a tumultuous ride for cryptocurrencies in the past 12 months, both proponents and skeptics agree that rising customer interest may force advisors into the now 13-year-old crypto market, and expectations are rising that RIAs should at a minimum be well-versed in bitcoin, including issues around tax implications, custody and managing keys.

RIA-focused crypto education and service provider Onramp Invest issued a report earlier this year advocating for the Certified Financial Planner Board of Standards to revise its exam curriculum to include digital assets. The report posited that advisors risk breaching their fiduciary duty by “failing to give clients advice about their crypto assets.”

Meanwhile, some RIAs are discovering that clients, without coming to them for advice or even broaching the topic, have already invested in cryptocurrencies in held away accounts, according to Cruikshank at Flourish Crypto.

One multibillion-dollar-asset RIA working with Flourish discovered a “surprising” percentage of their customers were hiding crypto holdings from their advisors, largely out of “embarrassment” to even bring it up, Cruikshank said. The RIA, which Cruikshank declined to identify, was so “shocked” by the findings that it made a policy this year to have its advisors talk to every client about crypto, he said.

Since launching roughly four months ago, Flourish Crypto has brought on more than 50 RIAs with an average of $1.5 billion in client assets under management. It sources crypto clients largely from its more established Flourish Cash product for cash management, used by more than 400 RIAs, according to Cruikshank.

Of the advisor clients invested in crypto, 72% had exposure to bitcoin, 50% to ether, and just 16% to “other altcoins such as Solana or Cardano,” although 54% had exposure to crypto-related equities, according to the Bitwise survey. (Bitcoin, with a $798 billion market cap, accounted for the lion’s share of roughly $1.87 trillion in global crypto market cap as of late afternoon Monday, according to CoinMarketCap.)

Most proponents still limit their recommended allocations to between 1% and 5% of a client portfolio. RIAs have adopted a variety of products.

Ritholtz Wealth Management in December partnered with WisdomTree Investments to open a fund, the RWM WisdomTree Crypto Index. A spokesperson for Ritholtz said the firm is the only RIA with exposure to the 13-coin index but otherwise declined to comment on client traction into the offering.

Marty Bicknell, CEO of Overland Park, Kansas RIA Mariner Wealth Advisors, said he hasn’t seen much in terms of client flows into bitcoin from his firm’s $56 billion in client assets. Bicknell offers crypto separately managed accounts through Eaglebrook Advisors, a money manager founded in 2019 that has raised $22 million from investors including Bicknell.

“Clients do want access to crypto, but it’s still a small percentage,” Bicknell said in a phone interview. “It’s mostly something that we feel like you have to have an answer for, and personally it’s something that I believe in.”

Eaglebrook serves about 500 financial advisors at 40 RIAs. It had about $135 million in total AUM as of Nov. 1, 2021, according to its Form ADV.

Halbert Hargrove, in Long Beach, California, is another Eaglebrook customer and is already seeing some inflows, Brian Spinelli, who chairs the firm’s investment committee, said in a statement. He declined to provide specifics but said the firm recommends an allocation of around 1% to 2% of liquid assets for some clients.

Still, in another indication of confusion in the marketplace, Ric Edelman, founder of Edelman Financial Services (now Edelman Financial Engines), has become an outspoken proponent of crypto investing. But of its founder’s personal forays into digital assets and related technology, Edelman Financial Engines, which manages $291 billion in assets, clarifies: “His views do not necessarily represent those of the Firm generally, and do not constitute a recommendation for any specific Firm client or groups of clients.”

On a cryptocurrency FAQ webpage, Edelman Financial Engines says it’s “exploring investment vehicles for indirect exposure to the digital asset space via publicly traded securities.”

What goes up

Advisors themselves are split on where bitcoin is headed. Around 8% of respondents to the Bitwise survey expected that in five years, bitcoin’s price will go beyond $500,000, while 3% said it would go to zero.

Custodians may also help to usher in advisor adoption. Researchers with Fidelity Digital Assets, a crypto-focused arm of Fidelity Investments, have compared cryptocurrency to “the invention of the wheel.”

But, in the same report, Fidelity warned about bitcoin’s “undiscovered flaws,” which “could result in the loss of some or all assets held.”

Bitcoin price peaked on Nov. 20 of last year at just over $69,000, but a sustained sell-off dragged its price to a recent low of $32,933 on Jan. 24, representing a 52.4% drawdown, according to NYDIG. In the weeks since bitcoin crept back above $45,000 and was trading at roughly $42,170 as of 3:15 p.m. ET Monday afternoon.

Original Article: AdvisorHub

JPM: No Vax? You’re fired.

Jamie Dimon, the CEO of JPMorgan Chase, has been a strong supporter of in-person work during the COVID-19 pandemic. Dimon flat out said, “he would fire New York-based employees who haven’t been vaccinated.”Those words come after Citigroup, the fourth-largest bank in the U.S., took a very hard line on vaccines.  There are strict rules about vaccinations at the bank, and if people don’t get vaccinated could lose their jobs. Employees who have religious beliefs or medical conditions that qualify them will not have to pay.JPM has taken this even a step further. A recent memo was issued letting advisors know that if they “are not fully vaccinated or has chosen not to declare their status is not permitted to travel for the firm for any business reason.”

Wave goodbye to client meetings.

Advisors across the country have taken this to heart. How is it a firm can dictate you are required to come back into the office, but if you decline to show your proof of vaccination, the firm bars you from seeing your clients? We don’t get it. They’re saying it’s OK to put you in a closed, indoor room with your co-workers but not at all with your clients, where you have the option to set a meeting up in an outdoor setting. The firm’s decree is putting limits on how you conduct your business, to limit how you interact with your clients. And if you do see your clients, we all know that just gives the firm reason for termination.

This is a great way to create a wedge between FAs and their clients. Oh, wait, it has! $2M J.P. Morgan Advisor Heads to WF and Yet Another to RayJay.

ML Fired Arrested Advisor in Connecticut

James Iannazzo was arrested for hurling a drink at a smoothie shop employee in an expletive-laced rant captured on a TikTok video (watch below).

On a TikTok video taken in a Robeks store in Fairfield on Saturday, James Iannazzo, 48, yelled, “F—-ing stupid, f—-ing ignorant high school kids.”

Iannazzo, a Merrill Lynch employee since 1995, was enraged that day after his nut-allergic son went into life-threatening anaphylactic shock after drinking a drink from the store, resulting in the 17-year-old hospitalization.

The video shows Iannazzo standing at the store’s counter, demanding to know who made his son’s drink. It also shows him refusing to leave when workers said they didn’t know, and after they repeatedly requested him to leave due to his behavior.

He exclaimed, “I want to speak to the f—-ing person who made this drink!”

Iannazzo was charged with “intimidation based on bigotry or bias in the second degree, second-degree breach of peace, and first-degree criminal trespass” after turning himself in on Saturday. On February 7, he is scheduled to appear in Bridgeport Superior Court.

“He deeply regrets his actions and acted completely out of character,” Iannazzo’s lawyer Frank Riccio said in a statement.

Merrill Lynch fired Iannazzo on Sunday after learning of the TikTok video, which has over 2.6 million views since being shared on Twitter.

“This type of behavior is not tolerated by our company,” Merrill Lynch spokesman Bill Halldin said.

“We investigated right away and took action.” “This individual is no longer employed at our firm,” Haldin said, referring to Bank of America’s investment and wealth management division.

$2M J.P. Morgan Advisor Heads to WF and Yet Another to RayJay

Wells Fargo Advisors hired a $2 million producer from J.P. Morgan Advisors in Los Angeles on Friday.

Steven Tann began his career in 1987 with J.P. Morgan Advisors’ predecessor, Bear Stearns, but resigned two years later to pursue a 17-year career in television and film production.

Roger Gershman, an industry recruiter said “The Wells Fargo Private Wealth initiative is really resonating with advisors. Especially when combined with the talents of Paul Vannuki.” The complex manager brought on another PWM team last year, David Romans and Teresa Fisher from JPMS. The dynamic duo generated $4M+ in revenue. “The deals WF is offering are unprecedented. It really is a great combination of a new PWM platform, support, and deal ” says Gershman. Phil Sieg, who took over as CEO of J.P. Morgan Advisors in April last year has stated that he aims to quadruple the present headcount of roughly 450 brokers yet every month there is greater attrition than additions.

Wells Fargo has also been aggressively recruiting with top-tier packages and local managers who do not recruit face significant penalties this year. The rate of attrition shows a large improvement. Across the country in Coral Gables, Michael R. Revilla and Manuel A. Bernárdez joined the J.P. Morgan traditional brokerage firm in Coral Gables, Miami, last Tuesday. According to Forbes, who rated Revilla #428 on its list of the top next-generation advisors in 2021, they managed roughly $285 million in customer assets.

An unnamed source at JPMS said “the systems and ops an atrocity. We feel like the adopted step-child of JPM Private Bank. All the offices across the country have similar concerns. ” Gershman confirms whereas JPM has a terrific name and reputation, clients have no idea how much the advisors struggle under the old the legacy Bear Sterns division and are at their whit’s end with back-office administration and compliance oversight.

Revilla joined Raymond James’ predecessor Morgan Keegan & Co. in 2005. According to his former website, he also served as an associate market director for Raymond James’ Miami-Dade complex in 2018. According to the FINRA BrokerCheck database, Bernárdez began his career with Raymond James in 2014.

J.P. Morgan Advisors, which has been led by former Merrill private wealth executive Phil Sieg since April last year, has implemented a number of policy and compensation changes in order to address common broker complaints though that has apparently not stemmed the tide. The division, which is a modest part of J.P. Morgan’s $700 billion-asset-under-management Wealth Management division and dwarfed by its private bank, has mostly targeted major wirehouse producers but the competition for talent has become more fierce to retain and lower attrition.