Investors Cap Founder, Ted Charles, Sells Stake to Advisors

Charles retires following the sale of his 55% stake to advisors, clients and home-office staff.

Investors Capital said late Tuesday that after that sale of his shares in a public offering, which represented a roughly 55% stake in the firm, company founder and Chairman Theodore E. Charles retired from the company. Charles' shares were sold to the company's financial advisors, clients and home-office staff at his request. 

Investors Capital will continue to be led by President and CEO Timothy B. Murphy, whom Charles recruited in 1994.

ted charles“It was very important to me that Investors Capital continue on as I envisioned when I founded it in 1992,” said Charles (left), in a press release. “I wanted it to remain a publicly traded firm where advisors are truly independent and in charge of their own destinies, unencumbered and uncontrolled by a dominating entity such as an insurance company, private equity firm, or majority shareholder.”

Investors Capital said the secondary offering of stock owned by Charles, family members, family trusts and a charitable foundation represented about 3.6 million shares that were sold at a price of $4.25 per share – for a total stock sale of roughly $15.3 million.

Investors Capital said it acted as the sole underwriter for the offering and did not receive any of the proceeds from the offering.  The selling stockholders were responsible for underwriter and agents’ commissions.

The independent broker-dealer includes more than 550 advisors with an average annual production (fees and commissions) of $161,680 — the highest level in its 19-year history. Average annual production has almost doubled over the past five years, the company says. In addition, recurring revenue is at 30% of total revenue.

"Recruiting is going well, and we just hired our largest producer ever," said Murphy in a phone interview. 

The company says it is the industry’s sole publicly traded independent broker-dealer owned predominantly by its advisors, clients and employees.

“I am proud and privileged to be part of such a unique firm, one where the interests of investors, advisors, management, and staff are truly aligned,” said Murphy, in a statement. “I thank Ted for his leadership over the years and the opportunity to continue on the path we started with Investors Capital so long ago, to become not the biggest broker-dealer, but the best.”

According to Murphy, he will fulfill the roles and responsibilities of company chairman as needed before a permanent chairman is nominated and elected. He expects the board to meet on August 23 to begin the nomination process for a new chairman, though a special meeting could be called before then.  

Investors Capital plans to release its fiscal first-quarter earnings on Monday.

Reprints Discuss this story
This is where the comments go.