News, Vision & Voice for the Advisory Community


Veteran Merrill Lynch manager leaves seven registrations on the table to return to his pure-RIA roots

Fed up with BofA and faced with a choice between managing advisors and being one, Brad Stratton moves to CONCERT

Wednesday, February 22, 2012 – 4:08 AM by Lisa Shidler
no description available
Brad Stratton: I realized that [Merrill Lynch] was going in a different direction.

After two decades with Merrill Lynch, a manager with $75 million in assets has left the wirehouse giant to return to the RIA arena in which he began his career with his father 25 years ago.

Brad Stratton, 49, joined CONCERT Global Wealth Management on Friday and will operate his firm in Overland Park, Kan. under the CONCERT brand. But, as a nod to his roots, Stratton filed his registration documents using the name Stratton Capital Management — his father’s RIA that closed in the late 1990s. See: Should I dump my securities licenses?.

Up until a year ago, Stratton had been resident director at Merrill Lynch based in Kansas City where he managed 45 employees and $17.5 million in revenue. He was also vice president and senior advisor at Merrill. But then, Stratton says, the company forced him to choose between working with clients exclusively or managing advisors exclusively. Stratton chose the clients.

“I chose to focus on my book of business,” he says. “I stood at the edge a couple of times thinking of letting go of my book of clients, but I always chose to keep the book and I wanted to stay in Kansas City and work with clients.”

A Merrill Lynch spokesperson declined to comment for this article.

Founded in 2005, CONCERT is an aggregator that targets smaller wirehouse breakaways who want to go independent but don’t want to start a business from scratch. See: CONCERT Wealth Management nabbed 12 wirehouse teams in the last 12 months and this wirehouse-lite is just getting started.

Founder Felipe Luna is excited to have Stratton on board. “We are extremely pleased to have a professional of Brad Stratton’s quality, industry leadership and experience join the CONCERT family,” he says. “Brad’s past experience first as an RIA, then an advisor and director at Merrill Lynch gave him a unique viewpoint on his options for the best way to care for his clients and continue the growth of his successful business.”

Moment of clarity

Stratton says he felt the culture of Merrill Lynch had dramatically changed in recent years, particularly in regard to its emphasis on banking clients and services That shift became crystal clear, Stratton says, when he attended a Merrill Lynch managers meeting in January. See: Merrill Lynch and Bank of America cultural tension may spin out a new round of breakaways, recruiters say.

“I realized the firm was going in a different direction. It was more of a Bank of America meeting than it was a Merrill Lynch meeting.”

Stratton also noted that two leaders he respected greatly — Sallie Krawcheck and Lyle LaMothe — are no longer with the firm. Krawcheck left in September (See: Merrill Lynch brokers brace for sweeping comp changes as Sallie Krawcheck departs BoA and takes her advocacy with her) and LaMothe quit as head of Bank of America’s Merrill Lynch brokerage force in May.

LaMothe, giving his first interview since his departure from Merrill, last week told Reuters that he had philosophical differences with the firm, believing it was emphasizing the goals of the bank rather than the needs of brokers and clients. “I didn’t get into the financial services business to be a commercial banker,” LaMothe said in the Reuters story.

Just clients

Stratton says he, too, felt pressure to sell banking products and was frustrated because the compensation for these banking products was only a sliver of the compensation advisors receive for typical brokerage products.

Stratton says he’s now excited to be working solely with clients and, although he won’t be doing any managing or formal recruiting at CONCERT, that he has many connections with Merrill Lynch brokers in the Kansas City area and intends to talk with a number of them who might be interested in leaving as well.

Quick, bittersweet

Stratton says he resigned to a relatively new Merrill manager at 9 a.m. on Friday. See: A $2 billion, 69-year-old Merrill Lynch advisor passes up the gold watch in favor of breaking away.

“As a manager I’ve had a dozen people resign to me,” Stratton says. “I had to coach the new manager through the questions he was supposed to ask me — only because I’ve been through it so many times myself. It was quick and bittersweet.”

By 10:30 a.m., CONCERT had switched his licenses and by noon, the firm sent out an e-mail crafted by Stratton to his clients at Merrill and mailed out packets to them as well. Stratton spent Friday afternoon calling clients.

Stratton says he is glad that CONCERT is a signatory to the The Protocol for Broker Recruitment as it made his departure less stressful and he won’t have to worry about lawsuits. See: Broker Protocol signings regain momentum amid new signs that the wirehouses could shut the breakaway portal.

Tales from the kitchen table

For years, Stratton considered starting his own RIA using his father’s name. But given the regulatory issues, he decided it would be better to join a company like CONCERT.

“I’m a third-generation [advisor],” he says. “My mother’s father was a manager of a brokerage firm in Chicago and my dad worked for banks and founded the RIA. I’ve heard about this industry from the kitchen table my whole life.”

Stratton began his career working with his father in 1987, leaving to go to Merrill Lynch in 1992. At the time, Stratton says, he saw growth in the wirehouse arena.

Straight RIA

While some advisors at CONCERT operate as dually registered advisors, Stratton says it was relatively easy to decide to let go of all of his broker-dealer licenses become an RIA. He had earned seven registrations including some for being in a manager’s role.

“I’m leaving about seven different registrations on the table,” Stratton says. “But I decided to go straight RIA. My book of clients was always more advisory and fee-based.”

Stratton had about 100 clients when he left Merrill and hopes to bring over about 75% of the $75 million in assets. Stratton points out, however, that he only needs to transition 50% of his Merrill business to maintain his previous pay level.

Stratton says the payout at Merrill was 38% and his payout at CONCERT is 70%. See: Merrill Lynch unveils changes to broker compensation.

Stratton is joining a CONCERT office that is already set up, will pay a set fee for his monthly rent and will also foot the bill for office incidentals.

“It was so nice that there was already an office here,” he says. “It made it a heck of a lot easier than negotiating with office buildings.”

Fidelity gets the nod

When Stratton was searching for a custodian, he narrowed down his choices to Schwab Advisor Services and Fidelity Institutional Wealth Services almost instantly but then had a hard time deciding between the two. Ultimately, Stratton chose Fidelity because it offers a similar platform to the investment services he used at Merrill Lynch.

In addition, Stratton likes the fact that Fidelity is a private firm as opposed to Schwab, which is a public company.

“I felt that Fidelity has its independence,” he says. “I didn’t want to be associated with another public firm.” Also, “Schwab is looking to build their own network of advisors and I felt that Fidelity was truly focusing on RIAs.” See: Mike Durbin is putting his stamp on Fidelity as an RIA custodian for asset-flush breakaways.

A Schwab spokesperson declined to comment for this article.

Stratton is pleased with the technology offerings at CONCERT and through Fidelity’s Wealth Central. See: Fidelity wins converts to WealthCentral, but most of its advisors have yet to make the switch. He received an opportunity to test-drive Fidelity’s Wealth Central and says many evening hours were spent trying out the new technology to make sure he’d be up to snuff. See: Technology review: Fidelity’s WealthCentral is solid and smart but still has seams.

Related Moves

Fidelity Investments loses Kathleen Murphy who largely caught up Fido to Schwab (near $4T) on the retail side by reversing net promoter scores

The 'no whining allowed' leader of the Boston giant's retail business, who oversaw $2 trillion in net new assets, was ready to exit but hung in through a year dominated by COVID-19 challenges

January 23, 2021 – 2:02 AM

Fidelity Institutional looks like a big TAMP after Mike Durbin removes last internal walls between products and advisors after 'meteoric' 2019 leap; two Fido RIA sales legends depart amid the shift

Rich Policastro and Tom Valverde are out after Fidelity Custody & Clearing assets leap to $2.6 trillion AUA, restructuring gets the credit -- and so restructuring gets extended.

March 13, 2020 – 10:36 PM

TD Ameritrade's board suddenly pushes out Tim Hockey after his big misread of RIAs; Tom Bradley name-dropped as successor

The CEO broke the TD promise never to compete with RIAs, took it back and got sent packing

July 23, 2019 – 4:30 AM

Capital Group miraculously recovered after deep 2008 dive but RIA help may get No. 2 American Funds through the next downturn under new CEO

Matthew O’Connor takes the CEO helm of the giant LA-based active manager from Kevin Clifford with conviction not to jam the rudder hard but to be open to new markets

November 2, 2018 – 9:26 PM

Mentioned in this article:

Omniscient Enterprise Advisor
CRM Software
Top Executive: Felipe Luna

RIABiz Directory

The Industry Sourcebook for RIAs

   |    LISTING

RIABiz Directory sponsored by:

Directory Sponsor Logo