Ameriprise’s independent brokerage notched one of the biggest financial advisor recruiting wins of the year, adding a billion-dollar team that left rival Edward Jones.
Advisor Jennifer Marcontell and eight other employees launched Houston-area independent practice Marcontell Wealth Management after 23 years at Edward Jones, where the team managed $1.7 billion in client assets.
Edward Jones sustained its first net loss in broker headcount in a decade last year but plans to ramp up hiring in 2022. Ameriprise’s headcount has been going in the opposite, positive direction. The firm added more than 100 advisors in the first quarter to top 8,000 in its independent franchise arm.
Ameriprise
“When I thought about the future of my practice, it became clear that I needed to find ways to increase our efficiency and provide development opportunities for my team members,” Marcontell said in an Ameriprise statement on July 5.
Her move represents the ninth-largest transition among independent brokerages this year, according to Financial Planning’s tracking of company movements due to recruitment or to a merger or acquisition. Deals are maintaining their record pace, despite stock volatility and inflation that’s keeping advisors busy as they coach clients through the economic turmoil. A switch like Marcontell’s, in which she left one of the largest wealth managers as a W-2 employee to work for a rival firm as an independent contractor, underscores the continuing shift of advisors and assets to those channels.
Brokerages and other wealth managers are trying to recruit and retain the most profitable advisors by tweaking their traditional operating models to appeal to as many planners as possible. For example, Ameriprise has a 2,000-advisor employee channel alongside its independent franchise arm, while some of its rivals are now adopting that same approach, too.
In the statement, Marcontell said she chose Ameriprise out of a number of potential landing spots after meeting with executives including National Women’s Recruiting Director Timari Robison and discussing how Ameriprise could help strengthen its relationships with its clients. Marcontell’s practice serves about 450 families that have more than $4 million in investable assets, on average, mostly through working in the energy and chemical industries around the team’s current location in Mont Belvieu, Texas, and its prior office in nearby Baytown.
“We appreciate the contributions Jennifer has made to our firm and our clients, and we wish her well in her future endeavors,” Edward Jones spokeswoman Catherine Stengel said in a statement. She added that the firm’s focus remains on “the clients of Baytown” and helping them achieve their financial goals.
Edward Jones had amassed the largest advisor headcount in the industry before freezing its hiring in 2020 at the start of the pandemic. Since re-opening its recruiting at the beginning of last year, the firm has been “building the financial advisor pipeline with its strategy to grow and promote branch team success,” according to its last quarterly earnings report. Last month, in a pivot from 100 years of its traditional model of one advisor and administrator per office, the firm gave all of its brokers the option to share a branch with another practice by the end of 2023.
Such adjustments signal how giant incumbents are responding to the industry’s consolidation by altering their standard approaches.
For example, LPL Financial is the largest independent brokerage, but it said on July 8 that it had agreed to acquire West Conshohocken, Pennsylvania-based Boenning & Scattergood’s Private Client Group business of 40 employee advisors and $5 billion in client assets. LPL launched its employee brokerage arm, Linsco, in 2019 through an earlier acquisition of a similar size.
Teams with around $1 billion in assets or more are searching for succession plans and professional development paths for their team members, as well as fewer administrative burdens, said Cerity Partners CEO Kurt Miscinski.
Three billion-dollar firms have merged into New York-based Cerity this year, boosting the registered investment advisory firm to about $50 billion in client assets and 425 employees. Last month, private equity firm Genstar Capital reportedly purchased a controlling majority stake in Cerity at a valuation of $1.6 billion, or 20 times its earnings before interest, taxes, depreciation and amortization, a common measure of value. Miscinski declined to disclose the terms. In general, he said that he doesn’t like using the word “acquisition” because it’s not possible to acquire people.
“They’re going to be our business partners. They’re going to be our colleagues. Together we’re going to build,” he said.
Moving with Marcontell to Ameriprise are associate financial advisors Allie Gwynn, Todd Patton and Erik Pettine, client service specialists Alicia Bryan and Victoria Gonzalez, operations coordinator Ryan Heard, operations specialist Tenna Howard and marketing specialist Kenzie Lackey. They formally switched brokerages on July 1, according to FINRA BrokerCheck.
“We’re thrilled to welcome Jennifer and her team to the Ameriprise family,” Ameriprise’s Robison said in a statement. “The level of trust Jennifer and her team have with their clients is remarkable.”