Merrill loses $262M firm to Raymond James over Broker Protocol concerns

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Eager to spend more time with clients and concerned Merrill Lynch might exit the Broker Protocol, the founder of a firm with $262 million in assets has left his employer for the country's No. 3 independent broker-dealer Raymond James.

Glen D. Smith, founder of his eponymous firm, Glen D. Smith & Associates in Flower Mound, Texas, is making the move along with broker Robert L. Casey and two other team members.

"My two children, who are nine and 11, have often said they would like to enter financial planning with me," Smith says. "In the past, their interest in this field was a source of pride for me. But, as I reflected on how Merrill Lynch had evolved since my arrival on August 3, 2007 and I thought of the trajectory they are on, I had many concerns. It suddenly was obvious to me that, if it wasn’t a path I was excited for my kids to pursue, it shouldn’t be a path I should settle for either."
Smith cited concerns over Merrill's requirement that its advisors focus on bank-related activities, like referring customers to its parent Bank of America, investment product sales quotas and the prospect that the wirehouse might one day exit the Broker Protocol.

Last month both of Merrill's two main competitors, Morgan Stanley and UBS, exited the protocol, which allows advisors to move with relative ease between competitors. Advisors at firms not party to the protocol may be subject to noncompete agreements that prevent them from taking client information upon leaving their positions.

Roughly 1,700 brokerages have signed the agreement.

Earlier this month Merrill said it will adhere to the protocol.

"We continuously evaluate the competitive landscape, but we are not making plans to leave the protocol," said Andy Sieg, head of Merrill Lynch Wealth Management. “While other firms are focused on leaving the Broker Protocol as a way of retaining advisors and clients, we’re staying focused on making sure that our advisors have everything they need to serve their clients and grow their businesses."

However, Smith says he doesn't want to risk Merrill changing course.

"If they did leave it you would find out on a Monday and it would be implemented on a Friday," he says.

By contrast, Raymond James doesn't subject advisors to selling quotas, bank-referral requirements or mandatory noncompetes, Smith says.

Instead the IBD's "combination of award-winning research, advanced technological tools and comprehensive range of investment options" won out over competitors he had considered, Smith says.

He also anticipates his firm will become more competitive thanks to the greater number of products the IBD offers.

"At Raymond James it is clear that the client is the most important person, not anyone at the firm, nor myself, but the client and his or her needs," he says. "I also feel like I have more control of the client's experience."

Smith, a son of missionaries who still live in the town where he grew up, Guayaquil, Ecuador, and his colleague Robert L. Casey, the son of a Southern Baptist pastor, both note their families' religious activities in their biographies. Smith is a CFP and Casey says he is a SmartVestor Pro, a designation given by media personality and financial advisor Dave Ramsey, who offers Christian-based advice to followers.

Smith was a vice president and wealth management advisor at Merrill and Casey was an investment associate, according to their Merrill biographies.

Joining them are client associates Erica Doré and Alisha Liddell. The team serves a variety of clients, including retirees, business owners and corporate executives.

Andrew Welsch contributed to this report.

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Broker Protocol Independent BDs Wirehouses Wirehouse advisors Recruiting Andy Sieg Merrill Lynch Bank of America Raymond James Financial UBS Wealth Management Morgan Stanley Wealth Management