After a decade-long journey, OpenArc Corporate Advisory, a $129 billion Atlanta-based RIA, was launched last week. Majority-owned by senior leadership with minority backing, the firm specializes in corporate and individual wealth management. The road to independence was not easy, with a lawsuit filed by Merrill alleging contractual breaches and poaching of team members.
The Global Corporate and Institutional Advisory Services team at Merrill, comprising about 60 advisors and over 100 staff members, previously worked with over 95 Fortune 1000 companies. Diamond Consultants initially explored a move to competitor Morgan Stanley, but leadership desired independence without constraints on investments or technology.
To achieve independence, OpenArc turned to Dynasty Financial Partners for middle office services and Charles Schwab for custody. Dynasty founder Shirl Penney had been building the firm’s wealth platform for over 15 years, aiming to create an institutional practice like OpenArc. Schwab’s capabilities, including stock plan administration, aligned well with OpenArc’s diverse needs.
OpenArc leadership, including managing partner Jeff Crowell, aims to provide better tools and personalized service to institutional clients. If legal hurdles are cleared, OpenArc could become a new competitor in the mega-RIA space and join the acquisition spree in the industry. The firm declined to comment until the court rules on the temporary restraining order filed by Merrill. OpenArc, a new venture backed by Dynasty Financial Partners, is in the spotlight as they navigate a transition from Merrill Lynch. The team of 77 advisors and 95 corporate clients is facing legal challenges as they make the move, with a court hearing set to determine their fate in the short term.
Dynasty’s Penney believes the entrepreneurial team at OpenArc is motivated by a bigger cause, not just financial gain. He emphasizes the importance of passion and dedication in the industry, highlighting the success of those driven by a mission rather than a paycheck.
Merrill Lynch has filed a lawsuit against the OpenArc team, accusing them of a “corporate raid” as they depart to form their new venture. The court documents paint a picture of team leaders seeking to claim and monetize what was built during their time at Merrill, sparking a legal battle.
Schwab, the custodian for OpenArc, has defended its handling of the situation, stating that they treated the transition like any other client relationship. The firm contends that they did not engage in vetting proprietary information and are focused on providing a smooth transition for OpenArc.
Despite the legal challenges and accusations, OpenArc is moving forward as a cohesive team with a diverse range of clients. The team is committed to their new venture, supported by Dynasty and their shared vision for the future of financial advisory services.
Read more at Yahoo Finance: The Story Behind OpenArc’s Decade-Long Journey to Independence