Insurance broker NFP says it is buying Bronfman Rothschild, a $6 billion RIA that it plans to merge with its wealth manager Sontag Advisory. The combined firm should have over $10 billion in assets and potentially more than 55 advisors.
The news comes three years after NFP moved to sell its brokerage advisory business — which had 1,400 affiliated advisors — to Stone Point Capital (who renamed it Kestra Financial) and is yet another sign that the industry is betting that growth in the RIA channel will top that of brokerage firms going forward.
“It appears to me that NFP is focusing on RIAs rather than broker-dealers, perhaps seeing RIAs as a growth segment while independent BDs will be shrinking, [and] more importantly, that RIAs don’t have to deal with FINRA and all the litigation risk that comes with commission products,” explained recruiter Jon Henschen.
By 2020, the RIA segment — which includes about 650 firms — could account for 30% of the retail financial-services business, up from about 21%, a recent Cerulli report said. In addition, assets under management by RIAs hit $82.5 trillion, up from $70.7 trillion in 2017, according to the Investment Adviser Association and National Regulatory Services.
“NFP continues to seize opportunities across all our businesses to strengthen capabilities and increase scale,” said Chairman and CEO Doug Hammond, in a statement. “The vision of integrating two successful firms like Sontag and Bronfman Rothschild is now a reality that will drive tremendous growth in our wealth advisory business.”
The deal should close by June 30, with Sontag Chairman Howard Sontag set to become chairman of the combined entity; Bronfman President and Chief Operating Officer Mike LaMena to be CEO; and Sontag President and COO Eric Sontag to assume the roles of president and COO.
“We are pleased to welcome Bronfman Rothschild to Sontag and the NFP family,” Howard Sontag explained in a statement. “Since our initial contact, it was clear that their focus on comprehensive personalized and consultative wealth management services aligns remarkably well with our client-centric business.”
Founded in 1995, Sontag is based in New York, while Bronfman has its headquarters in Rockville, Maryland.
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