Published Articles

MSSB Wells Vets Hop To Young Brokerage

SuperUser Account posted on April 06, 2011

By Tom Stabile April 6, 2011

An upstart brokerage is bulking up with wirehouse veterans and opening new offices this year as it aims to stretch beyond its Southeast regional market home base and become a mid-market leader. Capital Guardian Wealth Management of Charlotte, N.C., has hired 18 advisors and unveiled eight new locations in the past few months, including Boston, San Antonio, Minneapolis and several offices across the South.

In December, the firm hired Bob Slattery, who until 2008 was manager of a Smith Barney complex with $25 million in production in the Boston market, and who more recently had worked for Stifel Nicolaus in that region. Now, he is actively recruiting advisors for a new Hingham, Mass., office for Capital Guardian. Last month, he hired Bill Brooks, an advisor with about $70 million in client assets at Morgan Stanley Smith Barney in Norwell, Mass.

“Bob is close with four other recruits in the Boston market,” says Tony Montanari, director of business development for Capital Guardian. “They’re based in the old Smith Barney office that was closed after the merger with Morgan Stanley.”

The young brokerage – which is not affiliated with Capital Guardian Trust, the Los Angeles-based institutional asset manager – launched in 2006 as an advisor practice that broke off from Raymond James Financial, and didn’t begin recruiting in earnest until 2009. It offers its 75 advisors the option of signing on with its full service brokerage as employees, or allowing them to use its platforms and services as independent contractors.

All but eight of its 32 offices are independent brokerage outposts, though its activity this year has included launching two other full-service corporate locations beyond the Boston market, with new branches in San Antonio and Pensacola, Fla. A dozen of the 18 new advisors this year are employees, with the rest joining as independent contractors.

Part of the brokerage’s strategy is to seek experienced advisors and managers who have deep industry roots, including past wirehouse stints, Montanari says. One example is the hire last month of 31-year industry veteran Daniel McShea, who came over in Naples, Fla., from Wells Fargo Advisors, an outfit he originally joined when he went to its predecessor firm A.G. Edwards in 1990. McShea had about $70 million in client assets.

Capital Guardian also added John Gaynoe, a Morgan Stanley Smith Barney advisor, in February to head up the new Pensacola office. He has 35 years of industry experience, with roots in the Legg Mason Wood Walker brokerage that Smith Barney acquired in 2006.

Montanari says the firm expects to add three more experienced branch managers in the next 45 days. It also plans to add another 25 advisors in the next three to six months and open new offices in the process.

 “We’re not focused on any one [geographic] area,” he adds.

The firm’s footprint stretches from New England to Florida, and includes single offices in Texas, California, and Minnesota, but the biggest concentration for now is in the Southeast. Its 2011 tally includes three new Florida offices and one each in North Carolina and Virginia, with the latter involving the recent purchase of a small firm, Rhino Wealth Management in Norfolk, with 30-year-veteran and ex-Merrill Lynch advisor Mark Rienerth staying aboard to lead the office.

Capital Guardian offers its advisors a suite of service platforms, including access to the separately managed account and alternative investment product programs available through BNY Mellon’s Pershing affiliate and Envestnet. Its advisors now tally around $2 billion in assets.

Montanari says Capital Guardian doesn’t get into bidding wars to “buy business” when it recruits advisors, but actively competes with brokerages that have similar cultures and models, such as Baird, Stifel and Raymond James.

“People are choosing to come to us because of our platform, our culture, and the intellectual freedom we offer them,” he says. “These advisors want to again find a place like A.G Edwards and Legg Mason Wood Walker and J.C. Bradford. They miss that culture.”

That theory may not only be correct, but may well see further examples bear it out in the coming years, says Rick Rummage, a recruiter based in Northern Virginia who used to be a Morgan Stanley branch manager. Rummage says while he has never done business with Capital Guardian, he sees its framework as “the model of the future. This is where everybody is heading, and more firms like this are going to pop up as time goes on.”

Rummage says the hybrid option of signing on as a contractor or employee advisor is going to be an especially attractive feature for recruiting. “Ten years from now, you’ll see two to three times the number of these mid-market types of firms succeeding,” he adds.

The firm’s hiring push so far this year has brought along several other wirehouse veterans, including Jonathan Greene, who came over from Wells Fargo last week to join the Winter Park, Fla., office at Capital Guardian. Greene had previously been at Merrill for a decade, starting in 1995. Another hire from Wells to that office is Daniel Davis, who came over in January. His earlier stops included Raymond James and Janney Montgomery Scott. And Bill Harrison also joined the Winter Park branch in February, coming over from Janney after a prior post at Bank of America’s private bank.