From the September 2011 issue of Research Magazine • Subscribe!

September 1, 2011

Investors Cap Founder Sells Stake to FAs

Investors Capital said in early August that after that sale of his shares in a public offering, which represented a roughly 55 percent 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.

“It was very important to me that Investors Capital continue on as I envisioned when I founded it in 1992,” said Charles, 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.

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 percent of total revenue.

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

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