By Annie Gasparro, Dow Jones Newswiires Capital Guardian Wealth Management, a regional investment services and brokerage firm in the eastern U.S., is opening an office in Washington D.C. within the next two months and says it is in talks with wirehouse advisers to open several other independent franchises. Capital Guardian, which was formed in 2006 and is based in Belmont, N.C., now has 60 advisers and expects to double its headcount in the next year, says Tony Montanari, director of business development for the firm. The company manages about $1.2 billion in client assets. It has four branch offices and 16 independent franchises, and is in talks with advisers to open new independent offices in North Carolina, New Jersey, New York, Georgia, Florida, Illinois, Michigan and Tennessee. The firm has attracted mainly wirehouse advisers, many of whom are looking for a change after the financial crisis and market meltdown two years ago. Two teams of advisers joined at the end of last year from Morgan Stanley Smith Barney: a three-person team in Florida, and a duo in North Carolina. “If it wasn’t for what happened in 2008, I’m not sure this would be possible for us,” Montanari said. “The wirehouse advisers producing under $500,000 feel disenfranchised as a result of not being offered retention packages, and many have had their payouts cut to 20% to 30%.” Capital Guardian offers brokers in its branch offices a payout of 50% of production and full employee benefits. Those advisers also have the potential to earn ownership interests in their office, which is essentially a profit-sharing plan at the local level. Independent advisers run and operate their own franchises as independent contractors. They typically receive a payout of 85% to 92% of production. Advisers are able to do both fee-based and transaction-based business, and have the option of being an employee in a branch office or operating as an independent franchise. Hybrid firms set up with options like this are becoming increasingly popular in the industry. However, Montanari says a lot of wirehouse advisers looking to move are still opting to go to other banks. “The have a sense of fear that their clients won’t follow them to a small independent or boutique firm,” Montanari said. “But our advisers have had tremendous success in transitioning clients to our platform.
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