Advisor Group CEO Jamie Price had quite a week, wrapping up the sale of the 75% of the firm to private-equity group Reverence Capital Partners from Lightyear Capital, PSP Investments and others.
After Thursday’s announcement, Price answered questions on Friday about the deal and shared his thoughts on what it means for the company he leads, which includes FSC Securities, Royal Alliance Associates, SagePoint Financial and Woodbury Financial Services, and what its says about the independent broker-dealer industry.
Recruiters like Jon Henschen, of course, are following the sales process closely. “The Advisor Group advisors have grown accustomed to receiving retention bonuses with the ownership changes they’ve experienced,” Henschen said. But given that some recent PE purchasers of other IBDs did not offer retention bonuses to advisors, he is skeptical about what the latest deal means for them.
“With Reverence being a new player in the IBD channel, we don’t have a track record to gauge,” Henschen explained. “It will be a wait and see situation on if they decide to go public or flip the broker-dealers within a couple of years.”
Price’s conversation with ThinkAdvisor has been lightly edited for clarity.
What is Advisor Group’s retention-bonus plan?
“As part of this transaction, we will be working closely with Reverence Capital to launch an advisor recognition and retention program, and we’ll be finalizing the details in the coming months,” Price said.
What did Advisor Group get for Reverence’s equity stake?
“I won’t comment on pricing … for a whole host of reasons,” he explained. (Reports circulated about two weeks ago that Centerbridge Partners had offered more than $2 billion.)
Why is Executive Chair Valerie Brown leaving?
“Lightyear pulled her out of retirement, and now three years later, she’s returning [to it]. … The timing was perfect for her,” Price said.
Since Brown has been a “tremendous partner,” her departure is “bittersweet,” he added.
News of Brown’s exit came a day after BNY Mellon Pershing announced CEO Lisa Dolly was leaving the firm July 1 — and both have been significant role models and advocates for women in the business.
What is Advisor Group’s commitment to supporting women leaders in the advice business?
“Our leadership team is about 50% female today, and the whole company — its employees — are 51% women. There is lots of depth and breadth in our senior leadership … and we are passionately working to get the industrywide advisor figure for women up from where it is now,” he said, which is at about 15% female.
Advisor Group just wrapped up its yearly leadership event for women, W Forum, which included over 300 participants, Price says.
+How about the RIA route for advisors?
“We have an RIA at each of our [member] firms, and about half of our business is in the RIA side of the equation. We are a firm believer in the hybrid models and in both models,” he said.
“We do not believe the best way is to drop Finra registration and go all RIA,” Price added. “Sometimes the commission option makes sense for clients, with products like bond ladders. It all starts with the client.”
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