Welcome to Financial Advisor IQ

$3B Team Moves from Insurance-Based BD to LPL's Hybrid Network

By Murray Coleman October 21, 2015

After 30 years at Northwestern Mutual, advisor Andy Schwartz announced last week that he’d left to form an independent RIA, Bleakley Financial Group. Joining him in the Fairfield, N.J.-based practice is his brother, Scott Schwartz, and two other partners. Their team, which managed $3 billion at Northwestern, now uses LPL’s hybrid platform and registers as an RIA under Private Advisor Group.

Q: Why did you decide to leave Northwestern Mutual?

A: Northwestern Mutual is a tremendous insurance provider, but after 30 years our practice and that business were growing in different directions. Northwestern’s focus is on recruiting and premiums, which is fine. But our focus is on managing our clients’ assets and helping them with their planning needs. So our priorities for where to devote our time, energy and resources just no longer aligned.

Q: Can you provide more detail?

A: My firm no longer wanted to have any type of requirement or bias toward selling insurance. At Northwestern Mutual, I had relevance as both an insurance and a wealth-management producer. But over time, our practice had evolved — I was no longer interested in my position being influenced by our level of insurance production. Now we don’t have to worry about our recommendations — we can use the most appropriate products and services on the market that fit each client’s situation the best.

Q: Has using LPL’s hybrid platform given you more flexibility in dealing with client assets held in different places?

A: Yes. Before, we could only deal with captive assets. Now, we’ve got greater flexibility in our menu of custodians. Besides hiring LPL as our broker-dealer, we’re also using it as one of our main custodians. To give our clients even more choice, we’re now also using Schwab and Pershing. Another major benefit has been that all three have provided a high level of support to our staff in helping to transition our business.

Q: Does having more custodians open your practice to working with different types of products and services?

A: Yes. Before, we couldn’t offer certain products, like hedge funds and private-equity partnerships. Another issue our greater flexibility in working with custodians is helping us to alleviate is working with clients who work for large consulting firms. In some situations, consultants may be limited in the types of platforms they can use to custody their assets. Now, between the three platforms we’re offering, it’s going to be much less of a problem to find reasonable alternatives in terms of providing a conflict-free custodian.

Q: How have clients responded to the move?

A: We’ve always been client centered. But our clients certainly see that from a communications standpoint, we now have better resources in terms of technologies. We’ve adopted aggregation software from eMoney. It actually pulls together accounts our clients hold elsewhere and merges all of that information into our broader financial-planning system. So it’s a huge improvement. Also, we’ve gone outside to employ a suite from Orion that integrates our trading and client-reporting platforms into our entire planning system. It’s making tax-loss harvesting and trading much more efficient and productive for our clients.

Q: Northwestern Mutual this spring bought robo-advisor LearnVest. Did that play any part in your decision?

A: No, we want to deliver real holistic financial planning. We don’t want to just be the guys who custody assets, rebalance portfolios and pick mutual funds. We want to go far beyond that sort of low-touch service. We’re interested in working with clients who demand a higher level of service. Investment planning isn’t a black-and-white process for most people — it represents about half the job. So we’re not trying to be anything like a robo-advisor.

Q: What would you tell other advisors who are thinking about making a move?

A: If they’re interested in being in the investment business, then it’s a great move. But they’d probably be best served in joining other independent organizations — don’t try to reinvent the wheel. You don’t have to do it yourself.