Thank You, Morgan Stanley….Wells, RayJay, Opco Get Their Allocations
The race by brokers to escape from Morgan Stanley before losing the protection of the Broker Protocol turns out to have benefited a lot more competitors in the last few days than J.P. Morgan Securities, which on Thursday hired brokers overseeing more than $4.5 billion of customer assets.
The Morgan Stanley team of Jason Drotar and John Testa in Palo Alto, Calif., who generate about $2.1 million of revenue and oversaw about $200 million of assets, joined Wells Fargo’s Financial Advisor business for independent contractors on Wednesday, according to their BrokerCheck records and a person familiar with their practice.
Like their compatriots in New York City and Boston who moved on Thursday to J.P. Morgan, the California brokers accelerated their planned move after Morgan Stanley declared earlier this week that as of Friday it was withdrawing from the Protocol for Broker Recruiting, the person said.
Brokers who hop among the approximately 1,600 members of the Protocol are permitted to take rudimentary client contact information to help them jump-start their practices. Morgan Stanley has told its brokers that as of Friday most of them will be subject to one-year non-solicitation agreements.
Drotar and Testa, who had been with Morgan Stanley Dean Witter since 2000 and 2006 respectively and are working as independent brokers from an office in Los Gatos, Calif., could not be reached for comment on why they chose FiNet. While independent brokers do not command the signing bonuses offered to full-time employees, FiNet offers so-called transition packages of up to 60% of the revenue brokers produced in the previous 12 months in forgivable loans to top producers, and the opportunity to bring the payment to 130% down the road if certain production and tenure targets are hit, recruiters said.
Another Morgan Stanley team of three advisors in southern Florida with about $3 million of production also joined FiNet this week, said a person with knowledge of the move and the unnamed brokers’ practices. A Wells Fargo spokeswoman did not return requests for comment about the hires.
Oppenheimer & Co. also attracted a veteran Morgan Stanley team in Boca Raton, Fla.
Michael Shatsky, whose 23-year career as a broker has been spent with Morgan Stanley and Smith Barney, joined Opco with younger partner Alex Lee on Thursday, their client associate confirmed from their new office. The pair produce around $3 million and oversaw about $500 million of customer assets at Morgan Stanley, according to a former Morgan Stanley manager.
While Opco’s brokerage force has steadily dwindled, Shatsky and Lee accelerated their move to the firm because of the Protocol decision and because Opco was open to accepting their options-dominant practice, the source said. The brokers did not return requests for comment and their associate declined to comment on their business mix.
Tampa, Florida-based Raymond James also picked up veteran Morgan Stanley advisors to work at employee channel offices in New York, Pennsylvania and Illinois.
Charles Seller and his business partner Michael Salvatore, who were with Morgan Stanley and predecessor firms Smith Barney and Lehman Brothers for the full length of their respective 37- and 23-year brokerage careers, joined Raymond James & Associates branch in the New York City northern suburb of Somers on Thursday, according to their BrokerCheck histories and a person answering their phones.
Bradley Sunanday, who began his 34-year career at E.F. Hutton in Williamsport, Pa., and stayed with the firm as it morphed into Lehman Brothers, Smith Barney and ultimately Morgan Stanley, also took a Raymond James employee package on Thursday, according to his BrokerCheck record.
And in the Chicago suburb of Oakbrook Terrace, Kenneth Dow traded in his 19-year-old Morgan Stanley/Smith Barney varsity jacket for RayJay & Associates on Thursday.
Sunanday and Dow did not return calls for comment, and a Raymond James spokesperson did not respond to requests for comment on their revenue and managed asset numbers.
Concurrent Advisors, an independent firm with Raymond James Financial Services, hired Nick Hamilton and Anthony Paul on Thursday from Morgan Stanley in Denver, Colo., according to Nate Lenz, head of business development at Concurrent. The two managed $140 million in assets and had over $1 million in production, Lenz said.
J.P. Morgan wrote the biggest recruiting checks in this extraordinary week, according to recruiters and brokers. In addition to the eye-popping moves of teams in Manhattan, Boston and Dallas chronicled earlier in k-tcc, the New York bank recruited in its home city the practice of Jack Kolker, James Cordon and Barry Fleischer, a team managing $300 million in customer assets and that had been with Morgan Stanley for nine years, a bank spokeswoman confirmed.
They complemented J.P. Morgan’s capture Thursday of an eight-person team led by Colleen O’Callaghan that was managing about $3 billion.
J.P. Morgan Securities also on Wednesday recruited David Panzica, who managed about $130 million of client assets from a Morgan Stanley office in Manhattan where he had worked since 2008.
“Attracting and retaining top talent is a priority for our New York team, and J.P. Morgan’s boutique model and platform is attracting advisors,” Mike Lee, regional director of the broker-dealer said in a prepared statement. “The management support and access to resources across the firm will help these teams grow and best serve their clients.”
A Morgan Stanley spokeswoman did not respond to requests for comment on firm executives’ response to the departures.