Remember Derek Bruton
, Bill Chetney
, Bill Dwyer
and Esther Stearns
? Two and a half years ago you would've found all four executives in the top ranks of giant independent broker-dealer LPL's leadership team, but they've since all moved on.
Bruton, who resigned
from the San Diego giant six months ago after serving as managing director of independent advisor services, joined
nearby, $2.3-billion RIA Lucia Capital Group
this summer as CEO with an "aggressive expansion" mandate. And proprietary open-end mutual funds could be part of that plan.
Last week Bruton sealed
his first acquisition for Lucia, snapping up managed equity and fixed income accounts from Santa Barbara-based West Coast Asset Management
and bringing WCAM president Lance Helfert
and WCAM chief investment officer Atticus Lowe
on to the Lucia Capital Group team. Lucia, which Ray Lucia, Jr.
bought from his father four years ago, now has $2.4 billion in assets under advisement and about 70 employees, including 24 advisors, across 16 offices across the country.
"Our focus is clearly the mass-affluent investor," Bruton tells MFWire
, adding that the WCAM acquisition extends Lucia's reach "into the high net worth space."
Bruton says that Lucia's "biggest differentiator" is the team's "ability to generate leads." And the backbone of Lucia, Bruton says, is the firm's Bucket Strategy
approach to the financial planning investment process.
"It's a way of matching long-term liabilities with long-term assets and short-term liabilities and needs with short-term assets," Bruton says, calling the Bucket Strategy "a very intuitive and understandable process."
To fit into that strategy, especially for clients with longer investing time horizons, Lucia unit LC Management
already advices a closed-end '40 Act interval fund called the Multistrategy Growth and Income Fund
. The fund, with assets under management of about $200 million, focuses on "non-correlated investments" like real-estate and business development companies. And Bruton says he's "absolutely" interested in launching Lucia's own open-end mutual funds, too.
"We are looking at a proprietary product or two that would be open-ended and non-interval, but still '40 Act," Bruton says. "The margins on that business are, quite frankly, attractive. And it gives us more flexibility with our asset allocations."
Bruton describes Lucia's efforts (both current and future) in the mutual fund space as one of his four "areas of focus" for the RIA's growth. The other three are organic growth through Lucia's advisors adding new accounts and new assets, making more acquisitions, and recruiting more advisors.
"I just think it's a buyer's market," Bruton says of acquiring more RIAs. "We're not the only firm out there that's realized the potential."
Bruton's particularly interested in firms with between $100 million and $500 million in client assets, in contrast to the "traditional aggregators," whom he sees focusing on firms with at least $1 billion. He's focused primarily, but not exclusively, on firms on the West Coast.
"A good cultural fit trumps the geography of the firm," Bruton says.
As for Chetney, Dwyer, and Stearns, two of the three of them are working on startups. This summer Chetney, formerly head of retirement partners at LPL, left to build
out a 401(k) plan advisor-focused RIA, Global Retirement Partners
, as part of deal to acquire KPA-focused B-D Financial Telesis, Inc. [see coverage on our sister publication, 401kWire
] [press release
Dwyer, formerly president of national sales and marketing at LPL, left
the indie B-D giant a year and a half ago. Last week he joined RCS Capital
as CEO of its wholesale distributor, Realty Capital Securities
, which sells non-listed REITs (real estate investment trusts) and business development companies as well as mutual funds. RCS Capital is also the parent of another giant, acquisitive, indie B-D based in Southern California: Cetera
Two and a half years ago Stearns, who had served as president of LPL, moved
out to lead a LPL new subsidiary, NestWise
, to train and establish young financial advisors and reach the mass affluent marketplace. LPL shut down
NestWise a year ago, and Stearns has since moved
to San Francisco, where she is advising two Bay Area startups: Guide Financial
, which Stearns describes as having the quest to "carry the NestWise torch"; and ClearStreet
, which focuses on encouraging savings.
four years ago at $30 share with a market cap of more than $3.2 billion.
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