April 12 (Reuters) - Two former Merrill Lynch veterans on Thursday announced that they opened an independent, adviser-owned brokerage firm, saying they hope it will attract top talent from the biggest U.S. brokerages and grow to be global in scale.
Rob Mooney, former general counsel and head of business risk management at Merrill, and his partner, John Morris, a longtime financial adviser, founded New York-based Snowden Capital Advisors LLC last year and fully opened for business in April. The firm’s advisory board includes former Merrill broker chief Lyle LaMothe and division head Greg Franks.
“We had been thinking about the wealth advisory space for quite some time,” Mooney said in an interview on Thursday. “Now is an opportune time because we’ve come through with the approval of our broker-dealer and we believe strongly that there are forces in the market causing fundamental, structural changes to the wealth management business.”
Mooney said he expects Snowden to attract advisers who seek independence from any push to sell proprietary products, which is common at the brokerage arms of big banks. Snowden offers a clearing platform that allows advisers to choose third-party investments.
The firm’s multi-custodian model is similar to those at other wealth-management start-ups such as HighTower Advisors LLC, which has had success over the past year in poaching top advisers from the big Wall Street brokerages, including Merrill Lynch, Morgan Stanley Smith Barney and UBS.
“As wirehouse retention deals continue to expire, more and more high-end advisers will continue to move out, especially those people who have already taken a deal once or twice,” said New York-based financial services recruiter Mark Elzweig. “There will be people who feel that independence is the next logical step for them.”
Both Mooney and Morris had spent more than two decades at Merrill Lynch, the brokerage that was acquired by Bank of America during the financial crisis.
Mooney said that while the high-net-worth firm does not have a client minimum, he expects most clients to have at least $1 million in investable assets. Mooney said he and Morris plan to eventually extend their adviser base overseas.
“We believe very strongly in a global perspective for our clients,” he said.