Wells Fargo, Raymond James, Baird; plus new scholarships program, and an advisor sentenced for fraud and lying to a church

February 25, 2022 4:03 PM

The CFP Board’s Center for Financial Planning and a coalition of financial firms and Historically Black Colleges and Universities created a new scholarships program to provide Black aspiring planners with awards of up to $5,000 per student in certification training programs and $7,000 for undergraduate students seeking the mark. A former financial advisors is sentenced in a case involving fraud, false statements and lying about a church theft. And U.S. homeownership is rapidly rising, but Black homeownership is still below 2010 levels.

There’s also news of advisors switching firms and appointments in companies' executive ranks. Scroll down to catch up on this week’s news.

iCapital to lead blockchain consortium

Alternative investments fintech iCapital is putting together a consortium to a distributed ledger-based ecosystem to increase efficiency, security and convenience of alts for asset managers and financial advisors. Led by iCapital, the consortium also includes Apollo, BlackRock, Blackstone, BNY Mellon, Carlyle, KKR, Morgan Stanley, State Street, UBS and WestCap. Distributed ledger databases, also referred to as a blockchain, create a secure, shared and auditable record for each alternative investment, helping to augment the creation, management and exit processes. This would eliminate the need for each party to take in data, reconcile it to their records and share new versions of the data with others, according to iCapital CEO Lawrence Calcano. Chief information Officer Tom Fortin added, “The value in a private, permissioned, distributed ledger solution is that it creates one, single golden source of data — eliminating the need for multiple reconciliations, allowing all the parties in a transaction to read from and write to the same record. This synchronized approach enhances reliability, security, and efficiency.”

Record U.S. rise fails to lift Black homeownership rate above 2010 level

Home For Sale Real Estate Sign in Front of Beautiful New House.

Andy Dean Photography/Andy Dean - stock.adobe.com

At least 2.6 million American households became homeowners in 2020, driving a record 130 basis point increase to an overall U.S. homeownership rate of 65.5%. However, the data from the National Association of Realtors’ 2022 Snapshot of Race and Home Buying in America reveals the size of the homeownership gap between Black and white households. The Black homeownership rate of 43.4% remains nearly 3,000 bps below that of white Americans at 72.1% and 80 bps under its 2010 level. A record rate of 51.1% put Hispanic Americans above 50% for the first time in 2020, while Asian Americans had a rate of 61.7%. Mortgage issuers rejected Black and Hispanic loan applicants at a rate of 7%, compared with the 4% of white households and 3% of Asian applicants. “Black households not only spend a bigger portion of their income on rent, but they are also more likely to hold student debt and have higher balances,” Jessica Lautz, NAR vice president of demographics and behavioral insights, said in a statement. “This makes it difficult for Black households to save for a down payment and, as a result, they often use their 401(k) or retirement savings to enter homeownership.”

RIA platform appoints former Sanctuary Wealth, Hightower executive its president

The RIA services provider Tru Independence appointed Amit Dogra as president after his prior executive leadership roles at Sanctuary Wealth, Third Seven Advisors, Hightower, BNY Mellon and Brinker Capital. Tru Independence, a Portland, Oregon-based firm, spans two dozen RIAs that manage about $8 billion in assets using Tru’s technology and other infrastructure. Dogra is reporting to Tru’s CEO, Craig Stuvland. “I have been looking for someone with Amit’s passion, vision and skill set to complement mine and our team,” Stuvland said in a statement. “It is time to accelerate our growth and introduce our brand more broadly to the industry at large.”

Financial Alliance for Racial Equity and CFP Board launch new scholarships

The CFP Board’s Center for Financial Planning and a coalition of financial firms and Historically Black Colleges and Universities created a new scholarship with the sponsorship of Advisor Group, Franklin Templeton, Huntington, M Financial, Nationwide and NFP. The Financial Alliance for Racial Equity CFP Certification Diversity Scholarship will provide Black aspiring planners with awards of up to $5,000 per student in certification training programs and $7,000 for undergraduate students seeking the mark. The participating HBCUs are: Hampton University, Howard University, Lincoln University, Virginia State University, Virginia Union University and Winston-Salem State University. “Offering financial assistance to those who need it and are pursuing the CFP certification is critical to our mission to diversify the body of CFP professionals,” D.A. Abrams, the managing director of the CFP Board’s center, said in a statement.

Baird picks up Morgan Stanley advisors with $850M in client assets

Employee wealth manager Baird added teams in Yakima, Washington and Durango, Colorado from Morgan Stanley. Washington-based advisor Charles Patrick O’Connor managed $450 million in client assets with his prior firm and has more than two decades of experience. The incoming advisors in Colorado, Thomas Helms and Scott Shadid, managed $400 million with Morgan Stanley. Their practice’s client specialist, Brett Cadwell, made the transition as well. Baird’s Private Wealth Management unit spans more than 1,300 advisors and $255 billion in client assets.

Lincoln appoints former LPL manager to new head of multicultural markets

The retail wealth management affiliate of Lincoln Financial Group hired Samantha Hunter to a new position as its head of multicultural markets. Hunter has more than 15 years of experience. At LPL Financial she was lead developer of the firm’s Women’s Business Resource Group supporting female advisors. At Lincoln Financial Network, she’ll spearhead the firm’s African American Financial Professional Network, its WISE (Women, Inspiring, Supporting and Educating) program and its Women in Sales Network. In addition, Hunter will help create and promote new efforts aimed at advancing racial equity and inclusion across Lincoln’s affiliates. “I look forward to helping LFN continue to leverage its expansive platform to promote diversity, equity and inclusion within the financial planning industry and the communities we serve,” Hunter said in a statement. “Lincoln’s enterprise-wide commitment to DEI has impressed me and I’m excited about what we can accomplish together as we further integrate DEI principles into our network of financial professionals and our business.”

LPL adds Wells Fargo advisor to employee channel

Financial advisor John “Mark” Ross of Two Pines Wealth Advisors left Wells Fargo Advisors to join LPL’s employee channel, Linsco. The 20-year industry veteran based in Bozeman, Montana managed about $100 million in client assets with his prior firm. “For the first year of the COVID pandemic, I primarily worked from home while still managing to have a very productive year and give my clients the personalized service they deserve,” Ross said in a statement. “I recognized that I could have more flexibility in the way I work, as well as more control of my business, by joining LPL.”

Former advisor gets 2 years for Social Security fraud, lying about church theft

A former financial advisor named Charles Edward Severt Jr. will spend two years in federal prison after pleading guilty to fraud and false statements. Severt, a 52-year-old from Xenia, Ohio, stole more than $370,000 in Social Security disability benefits and lied under oath about why he was barred from the industry. He was registered from 1997 to 2010 with the Cetera Financial Group forerunner ING Financial Partners, according to FINRA BrokerCheck, which states that the regulator barred him after allegations that he stole $20,000 from a church. Investigators say Severt stated on disability applications that a 2010 shooting had left him unable to work, when in fact he had been working since 2014 at a tree trimming business. In addition, Severt claimed under oath that he had his investment advisor license suspended because he didn’t report his income from flipping homes, according to federal prosecutors in Dayton. A judge sentenced Severt on Feb. 23 after his August plea agreement.

Advisor Group’s SagePoint Financial poaches Ameriprise team with $155M

One of Advisor Group’s six brokerages, SagePoint Financial, picked up financial advisor Lars Lambrecht from Ameriprise. The Rehoboth, Massachusetts-based practice managed $155 million in client assets with its prior brokerage. “I'm excited to welcome Lars to our firm,” SagePoint CEO Desireé Sii said in a statement. “With more than 30 years of experience, he has been working with clients to guide their financial decisions and build wealth through multiple market cycles over the past three decades.”

Wealth Enhancement Group taps new chief growth officer

Private equity-backed RIA consolidator Wealth Enhancement Group poached the former chief marketing officer for wealth tech at Tifin and the ex-CMO of Personal Capital, Eric Weiss, to be the Minneapolis-based firm’s chief growth officer. Reporting to Wealth Enhancement CEO Jeff Dekko, Weiss now manages organic growth for the firm with a focus on digitally enabled expansion through marketing, sales, planning and the client experience. “Wealth Enhancement Group’s marketing initiatives have always fueled robust organic growth,” Dekko said in a statement. “With a seasoned growth expert and C-suite leader of Eric’s caliber, we will build upon and accelerate this success.”

Wells Fargo picks up teams from Merrill and J.P. Morgan Securities

Wells Fargo Advisors added four new teams joining the wirehouse from rivals Merrill Lynch, J.P. Morgan Securities and Sunflower Asset Management. Beverly Hills, California-based advisors Mitchel Gia Macnguyen, Vincent Macnguyen, Jacob Stalnaker and Cliff Nguyen managed $400 million in client assets and produced $3 million annually with Merrill prior to moving to Wells Fargo’s Private Client Group. The same unit picked up Scottsdale, Arizona-based Michael Weigel, while Wells Fargo’s branch-based channel recruited Nathan Gold in New York and Dwayne Hawkins in Dallas from J.P. Morgan. On a combined basis, the three other incoming teams managed $530 million and produced trailing 12-month revenue of $3.5 million with their prior firms.

Harbor Capital Advisors launches corporate culture ETF

Fund manager Harbor Capital Advisors created a new product called the Harbor Corporate Culture Leaders ETF (Ticker symbol: HAPY), designed to target the gains generated by companies with the best internal relationships among managers and employees. It will be based on “human capital scores” of large cap U.S. companies generated by behavioral scientist Dan Ariely’s research firm, Irrational Capital. “We believe we have discovered a way to quantitatively capture the powerful connection between human capital and financial outcomes in an investable way,” Ariely said in a statement. “By uncovering the capital in human capital, we help create investment options that seek to prove that doing the right thing pays.”

Advisor Group appoints LPL and Lincoln managers to senior roles

Independent wealth manager Advisor Group hired former executives with LPL Financial, Lincoln Financial Group and Northwestern Mutual to roles in trading and operations, advisor engagement and corporate communications. Former LPL executive vice president of service, trading and operations Tim Hodge now reports to Advisor Group CEO Jamie Price as the Phoenix-based firm’s executive vice president of trading and operations. Former LPL marketing and communications manager Jen Roche joined Advisor Group as its senior vice president of corporate content, communication and public relations. In addition, the firm promoted its director of specialty teams, Aiyisha Adams, to be its vice president of advisor engagement following her prior tenures with Lincoln and Northwestern Mutual. "As we embark on the next stage of our strategic vision, we are committed to hiring top talent that will help us align ongoing advisor feedback with a boutique service approach and industry-leading scale to deliver tailored solutions that help our advisors and their clients thrive,” Advisor Group CEO Jamie Price said in a statement.

Cetera adds a new investment program in the credit union channel

Independent wealth manager Cetera Financial Group and its financial institutions community, Cetera Investment Services, created a new investment program at a Radcliff, Kentucky-based credit union spanning $2 billion in client deposits. Abound Credit Union picked Cetera to launch the firm’s first wealth program. "Cetera has a first-rate reputation for delivering the best service and support in the industry, and we look forward to working together to provide more solutions and expanded services for our members," Marc Prasch, Abound's chief member experience and operations officer, said in a statement.

FPA members increased one-on-one pro bono planning hours

Free appointments for underserved and at-risk Americans spanned 18% more hours in 2021 than the prior year after more than 5,700 individuals received pro bono guidance from 960 planners with the Financial Planning Association over 17,407 hours. Through its one-on-one sessions and financial education workshops, the FPA Pro Bono Program reached 11,277 people last year. “Financial planning is a helping profession that has the power to transform the lives of those it touches,” FPA CEO Patrick Mahoney said in a statement. “Our community is comprised of selfless professionals who commit to this critical work, and we are grateful for their efforts.”

LaSalle St. grabs Avantax practice with $125M in client assets

Independent wealth manager LaSalle St. added Odessa, Texas-based financial advisor Troy Chestnut of Chestnut & Associates from Avantax Advisory Services. The 35-year industry veteran’s firm managed $125 million in client assets with its prior firm, and the move to LaSalle St. will set in motion the practice’s succession to Chestnut’s grandson, Cameron Crone. “As we began our discussions with LaSalle St., we were immediately drawn to its culture of client service,” Chestnut said in a statement. “While the firm is the right size for us with a fair fee structure that provides flexibility to choose the right mix of technology and tools for our practice, it is how the firm enables us to work with our clients in a way that fits their needs.”

Raymond James Financial Institutions Division picks up CUNA practice

The bank channel of Raymond James added Houston-based advisors Arthur Gorden and Brian Turpen of First Community Credit Union from CUNA Brokerage Services. The team managed $245 million in client assets with their prior brokerage firm. “Our alignment with Raymond James will provide our financial advisors access to a broad suite of products and technology, as well as widely recognized research and consulting resources,” Jennifer Kilgore, First Community’s chief operations officer, said in a statement. “I’m confident that these enhancements will support our advisors as they continue to serve the evolving needs of financial planning and wealth management clients.”

DeVoe & Company launches service to spur RIA growth

DeVoe, a consulting firm and investment bank to the RIA industry, launched the DeVoe GrowthBuilder, a program for growth that incorporates strategic thinking, technology, tools, frameworks and coaching. “There are two big issues related to growth rates among RIAs,” said David DeVoe, the founder and CEO. “First, most RIAs are growing at very slow rates and due to market performance may not even realize it. Second, most owners don’t know that for every 1% increase in growth rate, there is a 7% increase in valuation.” DeVoe said that “actively working on growth should be a top priority for RIA executives” and cited recent studies showing that the average growth rate among RIAs is “surprisingly low for a high-growth industry” DeVoe said growth has steadily declined over the past five years. “When market performance and acquisitions are removed, the average firm’s growth rate is only 3% versus 9% a few years ago.”