Goldman Sachs Takes Action Against Departing Advisors
Goldman Sachs is cracking down on advisors who have been leaving the company following the announcement of the sale of the Personal Financial Management unit to Creative Planning. The firm is filing arbitration claims in order to enforce its noncompete and notice requirements. It alleges that advisors who have left cannot practice in the field for six months. The success of Goldman’s arbitration efforts will depend on the specific state regulations in the various jurisdictions where it is pursuing its claims. However, any attempt to enforce nonsolicitation agreements will require the firm to demonstrate ownership of the client relationships.
UBS Recruits Father-Son Duo
In a notable move, UBS has hired a father-son advisor team from Merrill Lynch. The team, known as the Betesh Group and led by Morris Betesh and his son Irving, a CFP, bring with them a staggering $780 million in assets. They will be joining UBS’ New York City office and will report to Market Director Kellie Brady. Morris Betesh has a diverse background in the industry, having worked at various Wall Street firms since 1991. He even ventured into the apparel industry for a period of time before returning to financial services.
Barred Advisor Faces Fraud Charges
A barred investment advisor, Jonathan Vincent Glenn, has pleaded guilty to a cherry-picking scheme that defrauded more than 45 clients. The scheme involved awarding the proceeds from favorable trades executed through an omnibus account to preferred client accounts while leaving other clients with losses. The Justice Department states that Glenn could face up to 25 years in prison for his actions. The Securities and Exchange Commission had previously banned Glenn from the industry in September as a result of the cherry-picking scheme. Prosecutors have indicated that they will recommend a prison term below the maximum due to Glenn’s plea agreement.
Recommendations for the Rate Spike
Treasury yields have experienced a noticeable rise, with the 10-year offering reaching 4.7% last week, up from 3.4% in May. Advisors are now faced with the task of explaining this significant increase to their clients and assessing the potential opportunities it brings. In this week’s Big Q feature, several experts shared their insights on the matter. They attributed the spike in yields to various factors, including political dysfunction within the U.S. House, actions taken by the Federal Reserve, geopolitical turmoil, and the surprising resilience of the economy. As a response, advisors are exploring different options, such as incorporating municipal bonds and implementing laddering strategies.
Industry’s Disapproval of SEC’s AI Proposal
The Securities and Exchange Commission’s proposal to regulate the use of predictive analytics and other AI technologies by advisors and brokers has been met with strong opposition from individual companies and trade groups in the wealth management industry. The comment period for the proposal recently closed, and industry participants expressed profound concerns regarding the potential implications of the rule. They fear that it could hinder technological progress by requiring firms to establish compliance programs for almost any application related to financial planning or portfolio management. On the other hand, consumer advocates applaud the open-ended approach, arguing that it will ensure investor protections extend to future technologies.
LPL Attracts RBC Team
LPL Financial has successfully recruited a team of advisors managing $900 million from RBC Wealth Management. The team, based in York, Pa., consists of advisors Brock Hively, Josh Smeltzer, Aaron Gingrich, and Emily Sides. They have joined LPL’s Strategic Wealth Services, which supports advisors in establishing independent practices.
Advisor Q&A: The Success of an Internship Program
For this week’s Advisor Q&A, we had the opportunity to speak with Daniel Wilson, who oversees a $4.9 billion advisory team consisting of 38 individuals at Ameriprise. Wilson explains how operating an internship program has significantly benefited his business and shares his success in attracting the children of his clients as new clients themselves.
Wishing you a wonderful weekend.
