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Coming Soon: Multi-Part Series on the Hou-Sear departure from Merrill Lynch

Intensity of breakaway was unprecedented, lawyers and custody execs say

Friday, September 18, 2009 – 5:35 PM by Brooke Southall
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Mark Sear [left in dark blue shirt] and David Hou[right in dark blue shirt] : It took a year to get these smiles

David Hou and Mark Sear didn’t climb to the top of the Merrill Lynch & Co. heap by doing things in a half-way fashion.

When the leaders of a Los Angeles-based advisory team with about $20 million of revenues decided they would break away to independence, they decided they would leave nothing to chance.

After planning their formation of Luminous Capital for more than a year, they literally executed the plan in 30 minutes.

So intensive was the planning by the team [weaned on a type-A ethic at Goldman Sachs in their early careers] that their lawyer Brian Hamburger of The Hamburger law Firm and their custodial contact, Fidelity Investment’s Scott Dell’Orfano, will tell you that they’ve never been through anything quite like it.

It was full-on.

Hou-Sear were able to move the practice from the 12th floor of their Century City office tower to the 3rd floor in that half-hour time, hire back virtually their entire staff of 15 employees and order pizza.

Such a story needed a thorough telling. I have interviewed Hou, Sear, their lawyer, their clients, their parents, and business associates of theirs over the past few months.

The result is a moment by moment narrative and a blueprint for advisors who would like to execute a similar strategy.

The story also includes comments from inside Merrill Lynch about the psychological impact the breakaway had on executives and the firm. Robert McCann, the former head of Merrill Lynch’s wealth management business is the key contact in this conversation.

The story will run soon as a three-part series on these pages.

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