In what could be further evidence of consolidation in the independent broker/dealer space–or of the enhanced value that winning Investment Advisor’s Broker/Dealer of the Year brings to honorees–another mid-sized independent B/D has been acquired by one of its larger brethren.
Securian Financial Group, the St. Paul, Minnesota-based insurance and financial services firm, said September 10 that it had signed a definitive agreement to acquire independent broker/dealer Capital Financial Group/H. Beck. When combined with Securian’s broker/dealer, Securian Financial Services, the combined B/D will have about 2,000 representatives operating in all 50 states. In its announcement, Securian said CFG’s senior management, which would include president and CEO Eric Meyers, will “remain in place,” that it will “continue to operate independently in Maryland,” and that it did not anticipate making any layoffs at either firm. Subject to regulatory approval, the acquisition is scheduled to close by year end. Other details of the acquisition were not disclosed.
In Investment Advisor’s 2008 broker/dealer survey, with data as of April 1, CFG/H. Beck reported 2007 revenue of $77.3 million produced by 680 reps. At the same time, Securian reported 2007 revenue of $118.5 million produced by 1,170 reps.
Meyers said in the announcement that Securian’s private, mutual governance structure, which allowed the firm to follow a “thoughtful, long-term approach when making strategic decisions,” matched well with CFG’s culture. That concern with culture is nothing new for Meyers. Capital Financial Group/H. Beck won Investment Advisor Broker/Dealer of the Year honors in 2007, and in an interview in April with the leaders of the other winners, Meyers answered a question about recruiting by saying, “Our biggest challenge is keeping a high level of advisor service and staying relationship-oriented as we continue to grow, and that means maintaining and expanding the open system” the B/D has with its products and services.
This is the second of the four winning 2007 Broker/Dealers of the Year to be acquired in recent months; in August, Securities America said it would acquire independent B/D Brecek & Young, creating a firm that in 2007 would have combined revenues of about $550 million (again with data from the April survey) and slightly more than 2,000 reps.