Apex eliminates Jon Patullo's position in move that baffles analysts but may clear the way for Mike Kerins to take on the 'Astra' challenge

Apex Fintech Solutions has already cut loose Jon Patullo, who was hailed only 18 months ago as Apex's technology product strategy guru.

Patullo was likely blindsided, said a source, who asked to remain anonymous to speak candidly. 

Patullo seemed to suggest the same. “I was informed that my role was eliminated" last week, he told RIABiz, which had been tipped about his departure. 

"It was great to build an incredible team, strategy and advisor platform in a short time at Apex,” he wrote in an email. 

Apex's PR consultants, FullyVested, did not respond to queries, and Apex RIA custody head Olivia Eisinger did not respond to a LinkedIn query.

Sources contacted by RIABiz for this article, some of whom asked to remain unnamed, say the Apex move sent shockwaves through staff and potential Apex business partners. Patullo accomplished much in his short tenure and impressed people outside the firm like Franklin Tsung, growth advisor, AppCrown LLC.

“Patullo actually knows institutional technology,” Tsung says by email. "Letting Patullo leave now is a poor decision; Apex's success should focus on being more of an outsourced managed service provider for large RIAs seeking to outsource the minutiae of planning, and to differentiate as a leading "Custodian for Alternatives". 

"The ideal human resource strategy would be to reorganize Patullo as ‘Global Strategy Chief of Custody.’"

He was expected to be needed for the next couple of years to build trust with former TDA RIAs that might want to sign on, the sources said. 

“Apex understands technology,” one anonymous source said. “They don't know how idiosyncratic the RIA world is, and that it is very much a people business.”

Deep integration

The timing of the Patullo departure from Apex may roughly coincide with the purchase of AdvisorArch by Apex in mid-March. 

The thinking, the off-record source says, is that AdvisorArch principal Mike Kerins is slated to fill the duties that Patullo had been assigned in managing the Astra product's design, development and promotion.

Kerins was quoted in the Apex release announcing the latter acquisition last month – and of his joining of the Apex “family.”

“The AdvisorArch team is excited to become part of the Apex family,” said Kerins, former co-CEO of AdvisorArch.

“Our deep integration into Apex’s RIA Custody and Execution Platform will make it seamless for traditional advisors and fintechs to automate their rebalancing process while also offering additional services such as tax-loss harvesting capabilities and direct indexing,” he stated in the release. 

Kerins has had tremendous success co-founding RobustWealth, selling it to Principal in 2018. He founded AdvisorArch in 2022 then sold it to Apex. See: As Principal takes RobustWealth reins, the looming question is whether it follows the Northwestern-LearnVest script, which had a depressing final scene

Ambitious plans

After what seemed to be a very successful 18 months at Apex, Patullo seemed to embody Apex's turnaround from also-ran to Big-Four custody contender, many industry observers believed.  See: Olivia Eisinger convinced Apex to hire dozens of her fellow ex-TDA staff to 'reimagine' VEO and now it's an RIA custody deliverable with a Big-Four-or-bust mandate -- and some analyst doubts

Patullo, who has 26 years of experience in advisory and financial technology, was tapped to lead the Dallas clearing company's ambitious plan to morph into more of an RIA custodian. 

A rough draft for its own software was to be based on TD Waterhouse's (TDA) Veo platform, which Patullo oversaw as TDA's managing director of digital trading and wealth management. 

He held a similar position at Schwab, following its TDA merger. See: Apex nabs Jon Patullo from 'Schwabitrade' to 'raise the bar' and make his new firm's RIA system as 'frictionless' as the old one

Tsung says Kerins has his work cut out for him.

“We can be sure Kerins will market (hard) his ability to know fintech and how ‘robust’ it is. Let's see what he does, but his time and pressure will be higher than Patullo.”