Loren Morris's move from Schwab to Dynasty looks a bit like an arranged marriage

April 6, 2011 — 2:44 PM UTC by Brooke Southall

2 Comments

When Dynasty Financial Partners hired away a senior manager from Schwab Advisor Services, it looked like the hot New York startup had scored a point against the San Francisco-based king of the independent world.

Actually, the move seems more an arranged marriage than a raid. The asset custodian is embracing the placement of Loren Morris, formerly Schwab’s front man for talking to RIA consolidators, at Dynasty as partner and director of RIA Services. Dynasty is an investments and technology outsourcer to big RIAs; Morris will come aboard on April 15 and work from its Manhattan headquarters. See: What exactly is Dynasty Financial Partners and why is the Smith Barney execs’ startup gaining so much attention?.

Bias

The hire strengthens the ties between Dynasty and Schwab, says John Furey, principal of Advisor Growth Strategies, LLC in Phoenix, Ariz., a company that helps brokers to transition to independence. “It’s not a loss. (Morris) has a bias because he knows Schwab’s platform better than all the others; he knows the product set and all the service teams.” Furey, formerly a director overseeing Schwab’s breakaway efforts, worked with Morris there as recently as 2009.

Lindsay Tiles, spokeswoman for Schwab, says that indeed, there are no hard feelings. “We have a great relationship with Dynasty and we’re looking forward to working with them in the future.”

Schwab may want to strengthen ties to Dynasty because the company is viewed as having a strong hand in serving as the catalyst for jarring the biggest and best “corner office” wirehouse brokers from their coddled circumstances with Wall Street firms.

But Schwab has not had the inside track with Dynasty advisors thus far.

The first two to choose Dynasty’s platform, Alan Harter with (sources say) more than $1 billion of assets under management and Mike Brown with $5.9 billion, both chose Fidelity Institutional Wealth Services. See: How Harter broke away from Morgan Stanley Smith Barney to find new vendors — and found old friends.

The Boston-based custodian has very strong ties to Dynasty.

For instance, Harter’s practice, Pactolus Private Wealth Management, has a strong family-office orientation and Fidelity’s Ed Orazem, Chris di Bonaventura and Eddie Brown of Fidelity all worked for Citi’s family office unit. Orazem and di Bonaventura both headed Citi’s family office business at one time and they now lead of Boston-based Fidelity’s unit devoted to family offices.

Citi alums

Dynasty’s key principals: Ed Swenson, Shirl Penney and Todd Thomson are Citi alumni. Dynasty allows its customers to choose whatever custody platform that they prefer.

Still, T. Patrick Mulvey, partner and director of investment platforms at Dynasty, says that his company was looking to strengthen its ties to Schwab.

“Charles Schwab is an important partner for Dynasty, and we believe Loren will make that partnership even stronger,” he said.

In his new newly created job at Dynasty, Morris will — once a sale is made — help to bring aboard new financial advisors and then he will continue to be the relationship manager with them going forward. In this role he may have some influence on RIAs in terms of which vendors they choose.

“Loren brings a great sales perspective,” Furey says. “He knows all the models — HighTower, Dynasty — and all the roll-ups so he can determine what’s different (about each of them).”

Standout

Morris, who formerly was Schwab’s relationship manager to HighTower of Chicago, Focus Financial of New York and United Capital of Newport Beach, Calif, sees his new employer as a standout.

“With its unique offering, diversified, open-architecture platform and highly talented management, Dynasty is a true leader in the evolving landscape of private wealth management,” he saids in a release. Morris was not made available for interviews and we’re hoping to add his photo to this article soon.

The willing talent sacrifice by Schwab to a mezzanine player is not unprecendented. HighTower announced in December that it had hired Kevin Geary away from Schwab. Geary, a 17-year Schwab veteran, is considered a star salesman who recruited advisors for Schwab on the West Coast.

Prior to his tenure at Charles Schwab, Mr. Morris was managing director at RCM Saratoga Capital. Earlier in his career, Mr. Morris served as an investment banker in the Global Financial Institutions Group at Merrill Lynch. He began his career in financial services as an underwriter with the Chubb Group of Insurance Companies. Mr. Morris is a graduate of Yale University and Dartmouth College’s Tuck School of Business.



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