Merrill Lynch loses $600M Broadway wealth team to LPL

The Broadway Wealth Management team is part of what industry observers call a trend of more financial advisors exiting wirehouses during the pandemic.

Broadway Wealth Management

Yet another wirehouse has lost talent to the industry’s whale of independent broker-dealers. 

Six financial advisors at Broadway Wealth Management, with around $600 million of assets under management, left Merrill Lynch and joined Linsco, LPL Financial’s employee channel

LPL, the largest IBD in the market with over $1 trillion of overseen assets, announced the move Thursday in a press release. The team’s start date was Sep. 1, a spokesperson said in an email.  

The team of Justin Hurd, David Earl Spencer, George Alessandria, Brandy Ebron, Sylvia Jorgensen and Ryan Larragoity joins what industry observers call a trend of more financial advisors exiting wirehouses during the pandemic. Earlier this year, LPL in particular benefited, scooping up 1,750 advisors despite a broader industry recruiting slog. A large chunk of talent came from the CUNA Brokerage Services, which brought $25 billion in the transition, and the firm Boenning & Scattergood, which had $5 billion of client assets, according to the company’s second-quarter earnings release. Additionally, in the last two years Morgan Stanley, Wells Fargo and Merrill all lost practices to LPL.

In a similar move today, father and daughter team Kelly Wealth Advisors, with almost $300 million of overseen assets, also announced their move from Wells Fargo to Linsco at LPL.  

Under Linsco, the team will also get a 50-70% payout

“There’s been a post-COVID upsurge in advisor interest in going independent,” said Mark Elzweig, who runs an executive recruitment firm. Working from home “gave advisors a taste of independence, and many questioned whether they needed their wirehouse firms at all.” 

Although two Broadway advisors interviewed said they did not consider their move as going independent since they are still considered W-2 employees for tax purposes, Elzweig said their move is “definitely going independent,” in the sense that they get to own their client relationships and business and can sell their practice if they want. Additionally, the firm refers to Linsco as its “independent employee” affiliation channel. Like rivals Raymond James and Ameriprise, LPL offers advisors the choice to be independent contractors or employees of the firm, with more corporate support for W-2 employees in exchange for a larger cut of their revenue.

“LPL has several business models of independence. The more business model choice a firm offers, the more successful they are in advisor recruiting,” Elzweig said. Under Linsco, teams will also get a 50-70% payout

Elzweig noted that while Linsco is an “unusual” model relative to industry peers, the move fits into recent trends where advisors break away from wirehouses but don’t want to give up institutional support altogether. 

“When you work at one of the large wirehouses, you’re used to everything being set up for you,” he said, citing office space, sales teams and technology platforms as common perks. “What advisors like when they go independent is to transition to an environment where all the services are provided for them.”  

In that sense, the advisors are taking a soft landing here. If an advisor went fully independent, Elzweig said, a W-9 form would be used for taxes. 

The move came after a year of deliberation on the team. 

“We asked the team, ‘should we stay, or should we go?’ It took three to four months of just asking that question, and the answer was, ‘yes we should go,'” said Spencer, one of the Broadway advisors. The next four months were spent exploring their options, and in the last stage, they planned their transition. 

“Really what it boiled down to was simplicity,” Hurd said of the decision to leave. 

The team wanted to focus on its strengths in investments and planning for its client base — mainly people within 15 years of retirement or newly retired. 

“We did not want to be all things to all people,” Hurd said. While LPL will provide robust resources for their operations, it has a “flatter structure where if we have a question and issue, we can get an answer very, very quickly.”

Still, Hurd said, it was a “slow drumbeat” and took months for all the members of the team to get on board. 

“The thought of making a new change is very intimidating and affects a lot of people. Not just us, but also our clients and our families,” Hurd said. 

Excellent marketing and communications tools were another draw, Spencer said. 

“From our personal website, a client [can] log directly into their accounts, see information about our platform, our team, get tax information,” he said. 

Although the advisors don’t give tax advice, he said, clients can now download forms like the 1040 off their website. 

“There’s just so many pieces that we thought, ‘wow, this is different,'” Spencer said of Linsco’s support platforms. 

In the fourth quarter, the team will roll out podcast episodes for listeners to catch up on Hurd’s bimonthly client conference calls. At Merrill, “those couldn’t be recorded. If you missed it, you just missed it,” Spencer said.  

The team will work out of Oakland, California, and Savannah, Georgia, LPL said in the release.

Scott Posner, LPL executive vice president of business development, said in the press release that the firm looked forward to benefiting from “tight-knit teams like Broadway.” 

Reached with questions, Merrill Lynch declined to comment.