A $700 million California-based advisory team is leaving Royal Alliance, one of Osaic’s broker/dealer subsidiaries, for Stratos Wealth Partners, a $20.2 billion office of supervisory jurisdiction of LPL Financial. It’s the latest of several departures from Osaic this month.
Pettinelli Financial Partners is based in Redwood City, Calif., and includes Dennis Pettinelli and his son, Jon Pettinelli, as well as a team of 20, including advisors and support staff. The entire staff is making the move to Stratos.
Dennis Pettinelli’s career began in 1973 with a 24-year stint at John Hancock, according to his IAPD profile. He formed his namesake firm in 2013, and Dennis will remain on board to transition the firm to his son.
According to Jon Pettinelli, the advisory team sought a hybrid firm with multiple custodians to help them scale the business, bringing them to Stratos. He also pointed out Stratos’ advisor support and portfolio management tools. In a statement to WealthManagement.com, Jon said the strengths of Stratos were the pull for the team.
“We decided to join Stratos, not so much for anything Osaic did or didn’t do, but because of our belief that Stratos was uniquely positioned with their leadership team, services and experience in the RIA space, to help us grow personally and professionally as a firm,” he said.
Stratos has more than 100 locations nationwide, employing 290 independent advisors and 73 home office staff.
The team’s move is the latest in several departures from Osaic, including Bice Wealth Management and Equity Design Group, which managed about $130 million and $520 million, respectively. Both teams departed Osaic’s SagePoint Financial for LPL Financial this month.
Last year, Advisor Group rebranded itself as Osaic and is consolidating its eight legacy broker/dealers into the new brand; the firm plans for all of them to be integrated by the middle of next year, though SagePoint and Royal Alliance have already transitioned. Late last year, Osaic announced it would acquire Lincoln National Corp.’s $108 billion wealth business.
Bice Founder Cubby Bice told WealthManagement.com he was dismayed by his impression that Osaic was trying to scale its revenues and earnings quickly by combining its multiple b/ds without paying attention to advisors’ back-office needs.
Bice and Equity Design Group Co-Founder Jason Hohenstein cited private equity’s incursion into the wealth space (and into Osaic) as a factor in their departure. Hohenstein felt his team was “tired of being shuffled around like cattle,” saying they had “no idea” which direction Osaic was heading and lamented that the only beneficiaries would be “shareholders and private equity.”
In a previous interview with WealthManagement.com, Osaic CEO Jamie Price disputed speculation about the firm going public or looking for a buyer, saying there was too much to do internally with the ongoing b/d consolidations.
“We’re not having discussions with leadership teams or board members about ‘should we do an IPO?’” Price said. “It’s way too early conjecture on that.”
Last month, the Sturkie Wealth Management Group, an advisor team in Lexington, S.C., made the opposite move from Stratos to Osaic, according to public filings. Founding Partner Stephen Sturkie registered with Osaic as of Jan. 30, according to his IAPD profile. The team had been registered with Stratos and LPL since 2012. According to its website, the firm works with individuals, families, retirees and business owners.
Osaic declined to comment on the addition, including the amount of managed assets at the time of the move.
Earlier this month, Osaic recruited a $117 million firm from LPL. Egéa Wealth Management is led by Founder Alex Papadopoulos and is based in Evanston, Ill. Papadopoulos said Osaic was a “scale player,” offering firms the tech and back-office assistance to help the firm expand.