Wall Street Journal — Group of Merrill Advisers Leaves to Form Florida Firm Offering Specialized Services

Team aims to help clients in areas generally not provided for at traditional brokerages

Original Article

By Michael Wursthorn

A team of Merrill Lynch financial advisers who manage more than $1 billion resigned on Tuesday to form an independent advisory firm to offer more specialized services to clients, such as paying bills and providing advice on custom-designed investments.

The move underscores how more advisers who focus on ultrawealthy clients are finding the traditional brokerage model too constricting, since a so-called family-office level of service is usually prohibited.

Former Merrill advisers Steven Wagner and his son Michael launched Omnia Family Wealth in Aventura, Fla. They are starting with a five-person team, including one other adviser and two former client associates from Merrill. The goal: to convince their ultrawealthy clients, with a total $1.4 billion in assets, to follow them to Omnia.

Steven Wagner, who is 63 years old, said he plans to do that by offering clients those additional services that are generally prohibited at Merrill. 

“You’re always running into situations where you need access [to or are asked to provide advice] on things outside the firm, and because of legal obligations and compliance issues, you’re not able to,” Mr. Wagner said. “When you think about what clients really want, they want a relationship with an adviser who knows them and the family and can fully service them.”

For example, Mr. Wagner said a client who has questions on an insurance policy obtained through a third party wouldn’t be able to get his advice. “You couldn’t comment on anything they were doing outside” of the firm, he said, adding he understands the policy.

Big-brokerage advisers who provide these services anyway face tough consequences, from a suspension to an outright dismissal.

Brokerage recruiter Mindy Diamond said the ability for advisers to offer family services is a big reason for teams to go independent. “A lot of advisers are looking for more ways to differentiate themselves,” said Ms. Diamond, president of Morristown, N.J.-based Diamond Consultants Inc. “In order to do so, they need to be able to offer services beyond investment management and credit management.”

Advisers can also charge for those additional services, but it wouldn’t be “needle-moving,” Ms. Diamond said.

When you think about what clients really want, they want a relationship with an adviser who knows them and the family and can fully service them.

—Former Merrill adviser Steven Wagner, who co-launched Omnia Family Wealth, in Aventura, Fla.

Mr. Wagner, who had been at Merrill since 2009 following a 14-year stint at UBS Group AG’s U.S. wealth-management unit, said that despite the independent channel’s proliferation in recent years, he was largely surprised to learn of its growth and technological capabilities. In particular, he said the technology available to independent firms “has just blown by what you can find at large institutions.”

He chose to launch the firm with the support of Dynasty Financial Partners, a New York-based shop that provides independent-adviser teams with trading, clearing, research and other support services.

While the traditional brokerage channel still controls the majority of investible assets in the U.S., research firm Cerulli Associates expects independent advisory firms and broker-dealers to surpass them before this decade’s end.