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Merrill FA Breaks Away to Better Serve Global Clients

By Murray Coleman October 11, 2016

After 24 years at Merrill Lynch, advisor Elizabeth van Walleghem left last month to help open MAXIMAI Investment Partners. The independent RIA is based in Coral Gables, Fla. Joining her at the new firm is her longtime partner, Thomas (Jim) Butler and three ex-Merrill staffers. The team managed $550 million at the wirehouse.

Q: What was the main reason why you decided to leave Merrill?

A: Merrill had been a leader in the market for ultra high net worth global investors before the takeover by Bank of America. But in recent years we’ve seen a change in the environment at Merrill. They’ve been closing branches internationally and asking us to close accounts in different jurisdictions. And in foreign markets where they still have a presence, they’ve been raising account minimums. So it was making things very difficult for us to keep servicing families we’d been working with in some cases for more than two decades.

Q: How much of your client base is devoted to international clients?

A: At this point it’s about 80%. These are clients who have multiple footprints. Some live in Latin America and Europe but have business interests in the U.S. Others have adult children living here and others live in the U.S. but spend a lot of time overseas. When I joined Merrill Lynch in 1992 from the Bank of Tokyo, I brought a globally diversified book of business. So our team has always worked primarily with ultra high net worth clients who live all over the world.

Q: Did you feel like cross-selling and other non-wealth related issues contributed to your decision to go independent?

A: We decided that we wanted more control over our future. When you’re working for a large firm, decisions are made at a level that is well above any individual financial advisor. We felt a need to move away from the bank’s increasing focus on cross-selling its products. Our team wanted to devote all of its energies to wealth management and serving our clients in a more customized fashion.

Elizabeth van Walleghem

Q: How are your clients reacting to the move?

A: We’re serving very entrepreneurial-minded people, so they understand the concept of being independent as opposed to being employees. They realize we’re now in a situation where we’ve got more freedom to look for better services and products to help them prosper in both their estate planning needs and business financing requirements. So we’ve always had a family office-type feel to our practice, but now we’re moving to an independent model where we see more opportunities to expand our role as fiduciaries.

Q: How so?

A: At the end of the day we want to offer clients more objective advice. We’re now going to be able to go to different lending institutions to help them negotiate the best deals. We also are going to have more freedom to expand our network of outside financial professionals. So if we have a family in France, for example, we can go find attorneys or accountants there who are experts in that country’s legal and financial system. At the bank if we had to go outside for specific expertise, it was under fairly restrictive guidelines.

Q: Doesn’t Merrill have a strong presence in the U.S. ultra high net worth market?

A: Yes, they do. But our business model is more global in focus. So the resources the bank was able to bring us didn’t carry as much weight with our particular client base. Merrill is a great institution but even for our domestic ultra high net worth families we felt like they would be better served working in a more objective and transparent environment in which their advisors aren’t tied to any one set of products or service menu.

Q: Has fee transparency improved under the independent model?

A: Yes, it’s greatly improved. Everything can be broken down for the client. There are no hidden fees and we’re able to better show the client exactly what they’re paying for and what we’re able to provide. In general, we’re going to make sure that our fees are going to be a little lower. At the same time, we feel like our clients are going to receive a lot more in terms of customized service no matter what fee schedule they follow.

Q: Do you think your compensation will improve?

A: Over time, being owners of our own business should prove beneficial. But our primary goal in making this move was to maintain our global connection to our client base. We are also putting a lot of time and capital into building a better client service model. So we’re planning to invest any incremental profits from owning our own firm back into making our service menu even stronger.

Q: Why did you decide to bring in an outside consultant to help with your move?

A: We were introduced to Dynasty Financial Partners by another financial advisor who we’ve watched go independent over several years and become very successful. So we came into this independent space with an understanding of the importance of tapping into the resources of a third-party business consultant. We selected Dynasty because they are very committed to working with global clients. So they’re helping us open doors with custodians. Along those lines, we’ve decided early in the process to use both Pershing and Fidelity.

Q: Does technology also present a major change at the new firm?

A: It is. A big attraction for our global clients is gaining mobile access to their accounts no matter where they are at any time. Being able to see multiple accounts from one window is also another major feature that we’re now able to offer that wasn’t available to our clients in the past. Dynasty has been a big driver behind our move to upgrade this practice’s technology. They’ve introduced us to software partners like Addepar and helped us deepen our relationship with Salesforce.