Moneta Group adds $300M team from Wells Fargo

Moneta Group, a large financial planning and retirement benefits firm, has hired a team of A.G. Edwards Inc. veterans who last year produced around $1.3 million in revenue and managed about $300 million of client assets.

Moneta Group, a large financial planning and retirement benefits firm, has hired a team of A.G. Edwards Inc. veterans who last year produced around $1.3 million in revenue and managed about $300 million of client assets.
The team is led by Patrick J. Howley III, a former branch manager at A.G. Edwards, who becomes Moneta’s 28th principal, meaning he has an ownership stake once his group begins contributing profits to Moneta. Also joining are Betsy Dow, a certified public accountant who had been with Edwards and its successor firms (Wachovia Securities LLC and Wells Fargo Securities LLC) for more than 25 years, and some administrators who worked with the pair.
“This is the first new team that the firm has added in years, and there was plenty of competition for them,” said Gene Diederich, chief executive of Moneta, which he joined in 2008 after a long career in branch management at A.G. Edwards. “I’m hopeful there will be more to come, but most broker-dealer advisers would not fit with our fee-only, mostly high-net-worth comprehensive-planning approach.”
Mr. Howley is a certified financial planner and was one of the first A.G. Edwards brokers to adopt a financial planning approach, according to Mr. Diederich. He and Ms. Dow will gradually convert all their business to fee-only but will temporarily affiliate with Purshe Kaplan Sterling Investments Inc. to retain commissions from annuities and mutual funds with deferred trail charges.
Purshe Kaplan is a broker-dealer that has been collaborating with “hybrid” advisers who have both commission and fee practices. Mr. Diederich said Moneta’s two principal custodians — The Charles Schwab Corp. and Fidelity Investments — both recommended Purshe Kaplan.
Moneta, which oversees about $7 billion of client assets at its RIA and approximately $1 billion at a corporate retirement plan recordkeeping unit, custodies about $5 billion of its registered investment adviser client assets with Schwab. It added Fidelity about 18 months ago to give its advisers some diversification. “Schwab didn’t do anything wrong, and it and Fidelity have both been great,” Mr. Diederich said.
A spokeswoman at Wells Fargo Securities did not return a call for comment.
Wachovia gave retention packages to A.G. Edwards brokers when it purchased the regional firm in 2007, offering 20% to 100% of their previous year’s pay over time if they stayed for a set of number of years.
Mr. Diederich said Mr. Howley and Ms. Dow’s production would have placed them in at least the top quartile of A.G. Edwards brokers.
The merger with Wachovia (and the subsequent takeover of Wachovia last year by Wells Fargo) has caused a flurry of brokers to leave the firms — particularly in A.G. Edwards’ home base of St. Louis. Earlier this month four legacy A.G. Edwards brokers who won a $1.1 million arbitration award against Wachovia Securities LLC asked a federal court to punish the firm for what they say are misrepresentations it made in getting a temporary restraining order against them after they joined Stifel Nicolaus & Co. Inc. in June 2008.
Mr. Diederich said disruptions and departures at his old firm appear to have eased, due mostly to time and recovering markets.
Although Moneta has not been an active recruiter of brokers and has little interest in merging with smaller firms, it is a member of the broker protocol agreement that allows registered representatives to defect to other member firms without fear of being sued if they follow procedures.
Separately, Mr. Diederich said Schwab’s announcement yesterday that it will reduce online stock trading commissions for all retail investors to $8.95 will not have much effect on Moneta since most of its clients already qualified for the rate because of the household balances they keep with the firm.