Breakaways continue apace: new additions to the Broker Protocol

Elizabeth’s note: On Monday, I interviewed the partners at Monument Wealth Management for an upcoming breakaway story. During our conversation, we talked about the breakaway movement in general, and the calls they get from brokers considering independence since they made their own move. The fact that the wirehouses have stabilized may be causing some brokers considering independence to feel that they’ve lost a window of opportunity, said David Armstrong. But he said he believes the breakaway movement will continue to grow. “We’re in the third inning,” he says. His view seems to be confirmed by yet another group of companies joining the Broker Protocol, listed below. Watch for Monument’s story in the next few days.

Nine firms joined the Protocol for Broker Recruitment between April 30th, when RIABiz last updated the list, and May 14, bringing to 480 the number of signatories.

Established by the wirehouses to cut down on employment-litigation among themselves, the Protocol has evolved into a tool for RIAs that want to recruit advisors from the wirehouses. If a breakaway broker follows the Protocol to a T, then it is possible for the broker to take his or her clients along on the departure.

RIABiz maintains a list of the signatories, which can also be found on our directory page.

The new signatories are:

• Hausinger Financial LLC
• Wealth Management Network LLC
• Brookstone Securities Inc.
• Gore Mountain Advisors LLC
• Roth Financial Partners LLC
• Beacon Pointe Advisors
• ArcLight Asset Management LLC
• Dynasty Financial Partners LLC
• Tortuga Wealth Management Inc.

Beacon Pointe

RIABiz took note of Beacon Pointe Advisor’s name on the list. Last October, RIABiz covered the firm’s plan to become a landing place for smaller wirehouse advisors. The Newport Beach, Calif.-based RIA was talking to Citi advisors who were nervous about Deborah D. McWhinney’s move to shift all Citi advisors in bank branches to a fee-only model. Beacon Pointe at that time said it had launched a subsidiary, Beacon Pointe Wealth, to bring aboard financial advisors to continue as W-2 employees and to do commission and fee business. Beacon Pointe Advisors is a fee-only RIA than manages more than $4 billion.

“You could draw a direct bridge from that story to this one,” said Matthew Cooper, Beacon’s president. Last October, Beacon Pointe was interviewing people for two positions in its now-27-employee firm. It’s taken the RIA about seven months to fill those positions. In the interim, the company made two offers that didn’t work out. In one case, an advisor went to another wirehouse. In another, a background check turned up personal financial history that the company wasn’t comfortable with.

Just this month, Beacon Pointe was able to bring on two advisors from Morgan Stanley Smith Barney. Greg Jones and David Hopkins came on board as employees of the firm. Beacon Pointe had previously added a subsidiary to the Protocol, but decided to add the parent company, as well, Cooper said, explaining why the firm shows up as a new signatory.

The two new advisors will help Beacon Pointe with its participation in TD Ameritrade’s Advisor Direct program. Through that program, Beacon Pointe receives leads from TD Ameritrade retail branches.

Wirehouse reps preferred over bank brokers

During its long recruiting process, Cooper said the firm learned that it wanted to focus on recruiting wirehouse brokers, rather than advisors from the bank channel. “Wirehouse reps are more entrepreneurial by nature,” he said.