Merrill Lynch discharged an advisor who once oversaw $5 billion in client assets, the latest big producer to exit the wirehouse under a cloud.
The wirehouse has made headlines in previous months by terminating advisors with billion-dollar books of business, suggesting the firm may be pursuing a zero-tolerance policy with even its biggest earners.
"I think a large firm like Merrill thinks their reputation and name supersedes the customer relationship," says Marc Dobin, a Jupiter, Fla.-based securities mediator who also represents brokers in regulatory matters. "The customers are Merrill customers and the broker just happens to be in the middle of it.
"It's an indication, once again, that the days of the untouchable big producer are coming to an end."
In the latest incident this month, Merrill parted ways with Marc Lowe. Lowe, a 20-year industry veteran, had been with Merrill since 2009, according to BrokerCheck records. Previously, he worked at Bank of America prior to the merger.
A Merrill spokesman said he was no longer with the company and declined to comment further. In a filing contained in his CRD, Merrill said he was discharged due to "conduct involving inappropriate workplace behavior, resulting in a loss of management's confidence."
Lowe does not have any previous disclosures on his BrokerCheck record. Jeff Compton, an attorney representing Lowe, says this not a case about a rogue broker.
"That is not Marc. This is not in any way customer or compliance-related," Compton says. "This appears to be largely based on a personality conflict with a middle manager that Merrill brought in to manage a legacy group of BofA brokers."
Lowe had no indication that he about to be terminated when he was abruptly escorted from his office on Thursday, July 9, his attorney says.
"This termination has left him devastated, at least in the short term," Compton says.
Compton says Merrill appears to have a three strikes policy before terminating an advisor, and that Lowe may have run into issues for having raised his voice with a team partner, swearing, wearing sandals to the office following toe surgery and "making a comment about a Halloween custom."
Lowe and Compton have not yet seen the full termination form that firms are required to file. But, Compton says that from what he has seen, "the level of the types of things that they used to justify a termination really in my mind as well as Marc's peers will not give rise good cause."
In 2011, Barron's listed Lowe's AUM as $5 billion. Though he is no longer employed with the firm, his San Francisco-based team remains.
Lowe's colleague, senior financial advisor John Vilardo, is still employed at the Merrill office. When contacted by On Wall Street, Vilardo declined to comment.
Dobin suggested that the language of the disclosure "sounds like [the broker] was increasingly difficult to get along with. It doesn't sound like compliance problem, it sounds like personnel problem. It got to a level where it was intolerable."
Earlier this year, Merrill discharged veteran advisor Thomas Buck for allegations such as "failing to discuss service level and pricing alternatives with a customer" as well as "mismarking bond cross trade order tickets as unsolicited," according to BrokerCheck records.
The Indianapolis-based Buck had been with the wirehouse for most of his 34-year career, and he was listed in Barron's last year as having managed $1.2 billion in client assets. His employment with Mother Merrill ended in March, and he joined RBC in April.
And late last year the wirehouse discharged veteran advisors Stephen Brown and James Goetz for allegedly not disclosing outside business activities, according to a statement from Merrill in Goetz BrokerCheck records.
The two advisors, based in Fairport, N.Y., now work at Stifel, and reportedly managed $2.5 billion while at the wirehouse.
Although the allegations are different in Goetz and Buck's cases, Merrill alleged in BrokerCheck statements that the advisors had not been fully cooperative during internal reviews.
Though Buck, Brown and Goetz were able to reestablish themselves at another firm, the future career path can be cloudy for advisors who are discharged or leave under troubled circumstances.
Lowe finds himself in limbo right now, waiting for his U5 issues to be settled, but his attorney says that he's ready to land at a new firm and begin serving his clients.
"We are hoping that Merrill doesn't give any real resistance in that process," Compton says.
The broker protocol doesn't appear to apply in cases where the departing advisor was terminated. Attorney and On Wall Street contributor Alan Foxman, who isn't involved in this case, says that the employment agreement between the firm and advisor would generally dictate what client information, such as phone numbers or addresses, can be taken.
But a firm that fired an advisor would want to be careful about what information it provided to the clients about a discharged advisor, lest it open itself to a defamation lawsuit, says Foxman.
--With reporting from Suleman Din.
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