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Two years later, a Merrill Lynch breakaway team has no regrets

No one took a pay cut, no one is answering to a manager anymore, and there's never a question about buying a stapler

Author Elizabeth MacBride May 21, 2010 at 4:40 AM
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The breakaway team held conference calls with LPL in David Armstrong's car.



June 16, 2010 — 3:17 AM

Fun story on some of the behind the scenes activities on a breakaway. I did the same with a partner a number of years ago to join a small independent RIA. We’ve tripled the assets in the last 7 years and we and our client’s are way better off versus being captive in the wirehouse world. However, I would challenge the “no one took a pay cut” comment especially when it is followed by “though they have chosen to invest some of the profits they might otherwise have taken home back into the business.”

Welcome to the real world… this reinvestment will never end. There’s an array of reinvestment opportunities from systems, services, and marketing, to compliance, legal and insurance. Not that these investments aren’t worth making the change, but people shouldn’t make the switch expecting that these expenses will eventually go away “when everything settles.” It will never happen… especially at $250 million in AUM. Multiply that by 5 or 10 and you’ll start getting some economies of scale, if you’re good.

Another Guest

Another Guest

September 3, 2010 — 5:05 PM

Similar story here, (transition from a wirehouse to an Independent B/D). The best move I’ve ever made.

**Full Disclaimer: The independent channel is not for everyone; if you don’t know how to run a business, you’re probably not ready to be independent.

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Mentioned in this article:

LPL Financial
RIA-Friendly Broker-Dealer, RIA Welcoming Breakaways, Advisory Firm
Top Executive: Dan Arnold

Raymond James Financial Inc.
Asset Custodian
Top Executive: Bill Van Law

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