Team managing $1.5B leaves Morgan Stanley for Merrill

Todd Hatfield and three teammates who together manage about $1.5 billion in client assets left Morgan Stanley after 28 years and this month joined Merrill. The team is based in Boulder, Colorado.

Hatfield said he and his colleagues interviewed a range of potential destinations, including options that would have allowed them to operate as independent contractors and retain a larger share of revenue. He declined independence, citing the need for a broad, integrated platform and a desire to avoid taking on decisions about technology and back-office systems.

Hatfield called the idea of “independence” common in industry conversations but questioned its practical demands for a large team. He raised specific concerns about data systems, contact management and cybersecurity, and expressed reluctance to select among competing vendors without deep technical expertise. He asked how advisors should choose when vendors offer similar pitches at very different prices.

Clients’ needs were another reason for the firm choice. Hatfield’s clients frequently require trust and estate planning and banking products such as loans and mortgages. He pointed to Merrill’s affiliation with a large national bank as a practical advantage for arranging those services and said the Merrill and Bank of America names carry recognition among his corporate-executive clients.

The team generated about $4.3 million in revenue in the year before the move, a figure that would typically support a substantial upfront transition payment at a wirehouse. Recruiters commonly structure such payouts at multiples of a team’s trailing 12-month revenue. Recruiter Rick Rummage noted that some advisors accept large transition checks and the lower take-home margins that come with wirehouse employment in exchange for operational support.

Industry projections show independent broker-dealers and registered investment advisors are expected to gain advisor headcount in the coming years while traditional wirehouses are forecast to lose share. Rummage added that many advisors nonetheless prefer to remain in settings where much of the back-office work is handled for them, even if that reduces profit margins compared with full independence.

Hatfield described Merrill’s transition package as fair but said compensation was not the only factor. He said the team prioritized a wide range of services for clients and the ability to avoid becoming a de facto technology buyer for their practice when choosing a new firm.