While rumors persist about possible suitors for Securities America, Morgan Keegan and other broker-dealers on the market, experts say the pool of buyers has shrunk dramatically over the past few years. For advisors, the longer the sales process take, the more likely it is that advisors will leave, they add.
“There are fewer buyers out there right now,” said Jon Henschen, head of Henschen & Associates, a recruiting firm for independent advisors in Marine on St. Croix, Minn., in an interview. “There are just not many insurance firms looking for brokers, for instance, since many of them have gotten out of this business.”
This leaves private-equity and venture-capital firms as the primary group of buyers right now, Henschen says. “But the name of the game when you sell a firm is retention,” he explained.
Despite the poor market for broker dealers, the recruiter says Ladenburg Thalmann appears to be at the top of the list of potential suitors for Securities America, which has about 1,800 reps but some lingering legal issues surrounding its sale of private placements. Ladenburg Thalmann is the parent company of two independent broker-dealers: Triad Advisors in Norcross, Ga., with some 600 FAs, and Investacorp, in Miami Lakes, Fla., which has about 500 advisors.
“I’m thinking that Ladenburg Thalmann is probably turning over all the stones to check on potential liability,” said Henschen. “There’s also the issue of whether or not it should bring on Securities America as a stand-alone entity or merge it with Triad. But that [merger] could be an overwhelming task for Triad, since Securities America has so many reps.”