As part of the ongoing trend of broker-dealer consolidation, Securities America says it is poised to add up to 210 independent advisors and over $5 billion in client assets with a deal to buy some assets of Foothill Securities.
Securities America — which has some 2,000 affiliated reps, is based in Nebraska and is owned by Ladenburg Thalmann Financial (LTS) of Florida — says that Foothill has about $38 million in yearly revenue. It was founded in Silicon Valley in 1962 and has advisors in 12 states.
The deal comes together as smaller broker-dealers face increasing compliance costs, such as those associated with the new Department of Labor fiduciary rule, which reinforced Foothill’s decision to find a buyer, according to President and CEO Steve Chipman.
(The industry shifts are also prompting insurance firms to get out of the business. For instance, AIG is selling the Advisor Group of indie broker-dealers to the private-equity firm Lightyear Capital.)
Securities America “will offer our advisors additional compliance support, better technology, broader asset management resources and practice-management programs for the full practice life cycle,” said Chipman, in a statement on Friday, adding that the broker-dealer has been actively seeking a larger firm to acquire its assets for several months.
The Foothill executive also believes the deal makes it attract to prospective advisors. After the purchase is completed, advisors “will still receive the close-knit culture and personal attention of our branch support team. Securities America, like Foothill Securities, understands the importance of the advisor’s role in helping clients achieve their financial goals,” Chipman explained.
“We’re pleased Foothill Securities chose to partner with Securities America on this important decision,” said Securities America CEO and President Jim Nagengast, in a statement. “Foothill’s advisors can be confident they’re joining a broker-dealer with the right people and resources to help them promote and grow their practices.”
Securities America says this purchase represents its eighth deal, and in these acquisitions some 900 advisors with $12.6 billion in assets and some $114 million in yearly revenue have joined the firm.