From the May 2008 issue of Research Magazine • Subscribe!

Advanced Equities, First Allied Announce String of New Hires

Frank L. Campanale has been tapped as chairman and CEO of Advanced Equities Financial Corporation's wealth-management division. This hire, and others at independent brokerage unit First Allied Securities, could be further signs of the Chicago-based firm's desire to go public over the next few years.

Campanale, 57, served as the head of Smith Barney's consulting group from 1995 to 2004. At Advanced Equities, he will "oversee the expansion of a comprehensive wealth management suite of products and services" to First Allied and its private client group, the company says. He is a founding member and the current chairman of the Money Management Institute, and also co-authored the recently released book Supply Shock.

Advanced Equities offers clients pre-IPO stakes in companies financed by venture capital firms. It bought San Diego-based First Allied in 2005.

In 2006, First Allied had about $19 million in private-equity sales. That level grew to $150 million in 2007 and should hit $250 million in 2008, according to Keith Gregg, who has been CEO of First Allied for about nine months. "We're seeing pretty substantial growth in private-equity sales," he says.

Overall, Advanced Equities increased revenues from these offerings to $800 million in 2007, Gregg shares, and could hit $1.2 billion this year.

In terms of advisors, First Allied now includes a network of 934 individuals. About 20 percent are selling private-equity products. But Gregg would like to get that up to about 30 percent.

"This is a big focus for us," he says. "We want to get that figure up to no less than one-third, and then it's a home run. It's about educating our advisors that, one, the high-net-worth investor really wants this, and, two, this product is part of a diverse portfolio as it offers equity exposure without market volatility."

Gregg expects First Allied to encompass some 1,000 advisors this year, which means 300 could be selling private equity to clients, he says. "This is the minimum level we'd like to see incorporating private equity as part of their value proposition over the next three years or so."

"Our bigger goal is to help FAs double their business every three years with us," he adds. The current market volatility is good news for the firm, he says, because it helps us tell our story ... namely, that investors can see equity participation without the volatility ... with our late-stage venture capital offerings."

With several new hires at First Allied, like new National Sales Manager Scott Umstead (formerly of Merrill Lynch), a new customer-service program and a financial (or bank) program to help advisors fund acquisitions, things are "right on track," Gregg says.

"We wanted to shift our brokerage operations from an operations-based, silo-structured model, organized by function, to a cross-training, team-based regional service and support model," he explains. "So we hired a lot of really strong people."

At Advanced Equities, "Frank Campanale is building the best wealth-management platform to round out our suite, and we'll be truly, fully integrated from asset services to cash management to wealth management and wealth transfer. All the pieces and people are in place."

Don't expect too many more new faces, according to Gregg, but don't be surprised if more acquisitions or other deals take place. "We have some pretty significant things in the works," he notes. "We don't want to just compete in the marketplace, we want to win."

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Who's New at First Allied?o Jeff Anderson, senior vice president for strategic planning and business analysis, joined First Allied from Experian. Earlier, he held various senior positions at GE Capital, and worked on Six Sigma quality management.o Richard Keltner, vice president of business analysis, came to First Allied from CheckFree Investment Services (recently acquired by Fiserv), where he helped design key components and tools for product platforms, including part of a Schwab mutual fund advisory platform.o Vere Reynolds-Hale, senior vice president of the financial services group, most recently served as the executive vice president of product marketing and development at Summit Brokerage Services in Boca Raton, Fla. Prior to that post, he was vice president of sponsor relations at LPL Financial Services.o Scott Umstead, national sales manager, was previously president and CEO of Sweetwater Asset Management and president of the eastern division and executive vice president of the Private Client Group at Wachovia Securities.

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Janet Levaux is the managing editor of Research; reach her at jlevaux@researchmag.com.

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