The Financial Services Network (The Network), an office of supervisory jurisdiction (OSJ) office of LPL Financial, recently added California-based RIA Paradise Asset Management Group to its roster of affiliated advisors.
Paradise is led by Jeff Johnson, who brings $135 million client assets with him, and Dennis Miracle, who brings $110 million client assets to LPL Financial. The team left Cetera Financial Group at the end of June, according to Johnson and Miracle’s Brokercheck.
‘We’re having a phenomenal year and year-to-date we’re probably in the process of transitioning north of $800 million, on track to hit that billion dollar mark within the next couple of months,’ said Christopher Mercado, managing partner and chief investment strategist at The Network.
‘For firms that have a strong value proposition, resources that go beyond compliance like portfolio consulting, a virtual administration team, our transitions team and technology consulting, we see this as a year of opportunity.’
The Network has over $15 billion assets under management and is made up of a total of 300 advisors who use its investment capabilities, compliance and technology consulting, among other services.
It also has its own RIA, $3.1 billion Strategic Wealth Advisors Group (Swag), which is made up of roughly 100 advisors from about 65 firms. Swag has a multi-custodial relationship with LPL, Schwab, TD Ameritrade and Fidelity.
Swag recently took on San Carlos-based RIA Happiness Wealth Management, founded by Mike Duffy who left Merrill Lynch.
Advisors who are a part of the network are not required to use recommended funds or models put together by LPL research.
The Network has brought on advisor teams from Merrill Lynch, Morgan Stanley and Cetera since the start of 2018, totalling roughly $800 million assets under management.
Wilshire due diligence partnership
Recently, the firm started working with Wilshire Funds Management, which was hired to do fund due diligence on a universe of 3,000 funds and ETFs, which The Network uses to build custom portfolios for its affiliated advisors.
The due diligence is done by Wilshire Funds Management’s manager research team, made up of 15 manager research analyst and six portfolio managers, led by Rob Noe, head of Wilshire’s manager research group.
Separate high conviction lists are put together for each RIA, dependent on preference, by The Network's six person portfolio consulting services team, which is led by Jeremy Olen, managing partner and chief investment officer.
Strategies from the list are then used in each RIA’s model and custom portfolios.
‘The Wilshire research, where we really couldn’t get as deep as we wanted to, has to do with the qualitative element of their research,’ Olen said. ‘The fact that they literally have analysts covering actual firms is invaluable and now, at our finger tips, we have a portal where we’ve got that qualitative element.’
Wilshire Funds Management is the financial intermediary consultant side of Wilshire Associates, which also encompasses Wilshire Consulting, an institutional consultant that caters to endowments, pension funds and foundations. The firm has $46bn in assets under management, and $185bn in assets under administration.
‘Our research plays an important role in their ability to leverage our size and market tested process to conduct due diligence on individual managers, which gives them more of an opportunity to cover the entire breadth of the investment universe that they otherwise would not be able to do,’ Jason Schwarz, president of Wilshire Funds Management, said.
Schwarz said that despite the death of the Department of Labor’s fiduciary rule, firms looking to outsource investment capabilities are still on the rise.
In April 2017, Wilshire was hired to manage Ameriprise’s Active Diversified portfolios, discretionary wrap accounts which provide a range of risk-based model portfolios.
The firm had been working with Ameriprise as a consultant on some of its portfolios before it was appointed for full discretionary oversight.
‘Financial institutions, whether they’re RIAs, broker-dealers or wirehouses, are continuing to customize their needs in a lot of different ways,’ Schwarz said.
‘Whether its home office research teams complimenting their internal resources to provide a more consistent level of due diligence or broker-dealers looking to build, monitor or in some cases act as a fiduciary on a select list of investment options, we’re seeing a lot of those activities across the intermediary landscape right now.’