A Morgan Stanley Smith Barney breakaway stepped off the wirehouse carousel to keep in touch with his clients

Frank Braddock has a hard time getting through a meal when dining out in and around his hometown of Columbia, S.C. The financial advisor who took his team and fled Morgan Stanley Smith Barney for hybrid indie firm JHS Capital on Nov. 23rd takes great pride in getting to know all of his 164 clients or “relationships.”

“I’m really involved in their lives, which would not have (continued to be) possible had I stayed in the wirehouse world,” explains Braddock, a 10-year veteran of the financial services industry who had to be convinced that JHS would offer a culture of “yes” compared with the bureaucracy he was finding at the merged Morgan Stanley Smith Barney.

Industry observers say that, for the time being, Morgan Stanley Smith Barney brokers such as Braddock are the most likely to hop off the wirehouse carousel. See HighTower doubles recruiting staff and seeks green pastures of Morgan Stanley Smith Barney brokers.

“For the time being, you will see a slightly larger number of advisors leaving MSSB than, say Merrill Lynch/Bank of America, because with the latter, there really isn’t a lot of change going on,” notes Alois Parker a consultant from the Boston-based Aite Group. “With MSSB, there are problems with integration and a radical culture change along the lines of technology platforms, goal setting and management structure.”

Braddock prides himself on his ability to get to know clients within the intimate orbit of personal finance. Prior to stints at Prudential, Merrill Lynch and Morgan Stanley, he enjoyed a career in broadcast journalism, specifically on the radio.

Taking drive time to financial services

Braddock ran the station at Dorman High in Spartanburg, and then found himself on the news team at a number of Spartanburg stations, including handling drive time in Columbia, at WCOS-FM.

“Interviewing skills come in handy when working with a family and their money dynamics,” explains Braddock. “Often a husband and wife meet with me and bring with them opposing views of money. So having the experience of asking tough and uncomfortable questions is very helpful. We spend a lot of time in our discovery phase with possible clients, examining motivations behind money decisions.” (For more on understanding clients relationships with money, see this story: Eavesdropping on the Women Advisors Forum: Rainmakers share their secrets. Hint: They revolve around finding a niche.)

During Braddock’s radio days, those local stations he worked for were actively involved in newsgathering, often at the most local level. He draws a parallel between the demise of local news and the way that wirehouses ask their advisors to manage hundreds of client relationships. Neither allows for personal relationships or a close knowledge of a community. “I don’t know how some guys handle books of hundreds and hundreds of clients.”

Being presented with new challenges each day is another commonality that ties broadcast journalism and financial planning. “I get bored real easy,” adds Braddock. His childhood as part of a military family was one chock full of movement.

Guantanamo Bay

“I lived at Guantanamo Bay from ages 8 to 11, so I thought Santa always wore shorts, since it was always hot. I remember seeing Castro on TV, interacting with Cubans who at the time could work on an American base, and of course the monthly evacuation drills.”

After Braddock’s radio days, he took a job as buyer for a local chain of clothing stores. One day, Mark Hoffman, who ran Prudential’s Columbia branch, walked in. “He came in just to buy some underwear and walked about with a few thousand dollars of clothes. He took a few steps outside, turned around and said to me ‘We should talk- you are in the wrong business.” Shortly after, Braddock took his advice and made the last career change in his professional life.

Braddock jumped into financial services 10 years ago through that happenstance meeting. Now that training programs are dwindling across the board, industry insiders say they are seeing an uptick in career changers.

“There are attorneys looking for a change, some ex-professional ball players and a fair share of military guys,” explains Howard Diamond of Diamond Consultants.

Braddock left Prudential in May 2003, going to Merrill Lynch, where he earned his CFP designation. “Merrill was a great place with very smart people, but I have always functioned better in a small environment, which was what Morgan Stanley was at the time.” That time was October of 2006.

Soon after, two seminal events took place: The first was the formation of Braddock’s team in early 2008, when FA Jerry Stafford linked up, followed by FA Cameron Runyan, and client Associate Donna Able. The second was the merger with Smith Barney. “It became increasingly frustrating, with the multiple layers and the hurdles that had to be jumped to solve a client’s needs”

When Braddock began considering a move outside the wirehouse world, a familiar voice came calling. And calling.

Braddock had known Mary Kennemur, president of JHS’s Wealth Management Group, as a regional manager at Merrill. “She kept after me, especially when I told her ‘a firm’s a firm.’”

Parent company JHS Capital Holdings Inc. was formed by former Gunn Allen Holdings Chief Executive John Sykes. JHS Capital purchased Pointe Capital Inc. in December of 2009, calling it JHS Capital Advisors. For another recent breakaway that landed at JHS, see: A decade of baby steps led a broker from Merrill Lynch to a three-office hybrid of his own.

Kennemur answered Braddock’s questions, specifically those dealing with resources.

“I said we needed a robust trading platform and the best research. Look, losing the smarts of MSSB would hurt. We needed a Bloomberg terminal and access to quant data. No problem. This is a new firm with no 60 years of history but what you do have here is a culture of not a bureaucracy, but in a word, “yes.”

Braddock still likes having the name of an established firm on his card. “We are a JHS branch and clear through RBC.”

The transfer

How has the transition been in terms of client retention?

“When I moved from Merrill to Morgan in 2006 it was a tough 5-month total transition. Clients didn’t understand the difference. Currently we are at 80 percent of our $62 million book (in less than three weeks), since the story is much more compelling. Sure we get a bit of ‘why didn’t you warn me.’”

Braddock breaks down his approach to managing investments in the simplest of terms:

“We are about finding where the risk is and minimizing it. Reduce volatility and focus a lot on the macro-view stuff. When you do that, things become a little bit easier. I lost just one client in 2008, the only year where we went backwards. We were down 11 percent. But in that three-year rough period up to October of 2010, we are up 2.8 percent, while the S&P is down 4.5.”

Braddock is actively prospecting to add to his client base, which has an average of 500k in investible assets. There is no minimum account size. There just needs to be a good fit, he says, no matter what amount of money is involved.