Advisor Group, the 6,000-rep independent broker-dealer, announced Thursday that Larry Roth, its CEO and President, has left the company, which includes the IBDs Royal Alliance, FSC Securities, SagePoint Financial and Woodbury Financial.
At the same time, RCS Capital (RCAP) announced that Roth had assumed the position of CEO of Realty Capital Securities, the nontraded REIT broker-dealer and wholesaler arm of RCS Capital, which is led by Nicholas Schorsch. Roth, a veteran BD executive, replaces Michael Weil, who will become RCS’ chairman.
Roth became president and CEO of Royal Alliance in 2006 and CEO and president of Advisor Group in 2007. He is a two-time member of the IA 25 list of the most influential people in the advisor business, most recently in 2013.
Advisor Group said that Peter Harbeck will serve as interim president and CEO.
"I am very excited to step into this role," Harbeck told ThinkAdvisor in an exclusive interview on Thursday. "I know this business having served in a number of roles with the group over the years. So it is not as daunting a task as one might think."
The network's operations, which he oversees, "will continue as they have been; on a day-to-day basis, nothing will change a beat. The business and brands are in good shape."
Harbeck (left) said the search for a new president and CEO is underway, beginning with the network’s internal staff. He cryptically added that the next president “may already be a known quantity.”
Asked if he desired the permanent job, Harbeck said he did not, nor could he envision a scenario in which it would occur.
In a statement, Jay Wintrob, president and CEO of AIG Life and Retirement, which owns AdvisorGroup, thanked Roth “for his leadership of our growing broker-dealer network.” Wintrob also noted that Harbeck has served on Advisor Group’s senior leadership team for almost a decade, as chairman since 2004, and as head of securities processing and other back office operations since 2012. In his new, if temporary, role, the Advisor Group statement said, Harbeck will continue to oversee the network’s securities processing and other back-office operations in addition to his CEO responsibilities.
The news of Roth’s new role comes one day after securities regulators in Massachusetts said that Royal Alliance and five other independent broker-dealers had to pay total fines of close to $1.5 million associated with their REIT sales; in addition, Royal Alliance had to pay restitution of $125,000 to investors of these products. In May, Royal Alliance was asked to pay $59,000 in restitution and a $25,000 fine concerning sales of non-traded REITs.
American Realty, RCS, RCAP, Schorsch and First Allied
Roth becomes president and CEO of Realty Capital Securities (RCS), which is owned by RCAP Holdings. RCAP, led by real estate investor Schorsch, also owns American Realty Capital Properties and several other entities.
In mid-June, RCAP Holdings announced plans to buy the independent broker-dealer First Allied Securities from Lovell Minnick Partners “because we believe in the alternative space,” Schorsch said in an interview with AdvisorOne.
Though RCS is clear that Roth will have an important role to play in growing distribution of its products, Schorsch insisted in June that the First Allied deal was not about adding to its sales force. “We looked at First Allied’s business specifically for what it offers RCAP Holdings, not for distribution of product,” he said. “We sell so much…have a 51% market share and have raised probably $4 billion this year…we do not need more advisors selling our products.”
In this year’s Investment Advisor Broker-Dealer directory, San Diego-based First Allied said it had 652 producing registered reps as of Dec. 31, 2012. It reported gross revenues for 2012 of $232.9 million, and said that 7% of its gross commissionable revenue came from REITs.
Harbeck previously was an executive at Putnam Investments, responsible for dealer services and is a graduate of Harvard University.
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