Advisor Group said late Monday that — as had been anticipated — it’s buying Ladenburg Thalmann. This merger brings together up to 11,500 independent advisors, nine broker-dealers. $3.5 billion in yearly revenue and $450 billion in assets.
What asked about his view of the deal, recruiter Jon Henschen said the timing is good given the industry’s embrace of a fiduciary standard.
Uniting two firms that are “dual-clearing friendly will give the opportunity to CFPs and those that adhere to a fiduciary standard to offer best pricing and best choices to their clients,” Henschen said.
It also helps the firm position itself as “the LPL alternative,” Henschen said, referring to a term he’d heard from a manager with the newly formed firm. (LPL Financial — like rivals Ameriprise Financial and Raymond James — is self-clearing.)
As for what would make the combined entities’ advisors happy and improve retention, “The best gift is to make no changes and to keep the process as paperless and seamless as possible, while making things better overall for advisors,” the veteran recruiter said.
As part of keeping the management and different broker-dealers’ cultures in place, “I wouldn’t mess with staffing or pricing,” he added. “You don’t want to rock the boat.”
In terms of how the deal could benefit advisors, “There’s new scale that could bring lower ticket charges and lower administrative fees on advisory services,” Henschen said.
Plus, Advisor Group’s advisors should gain access to Ladenburg’s IPOs, trust and other offerings, such as certain model-portfolio platforms.
Discussing the next steps of the deal, which should wrap up in the first half of 2020, Advisor Group President and CEO Jamie Price was cautiously noncommittal when asked about any retention bonuses for the Ladenburg-affiliated reps. “There is not a ready answer for that today,” he said in an interview early Tuesday.
“First, the merger involves no putting of Advisor Group firms into Ladenburg firms [or] Ladenburg firms into Advisor Group firms,” Price explained.
Advisor Group includes FSC Securities Corp., Royal Alliance Associates, SagePoint Financial and Woodbury Financial, while Ladenburg has Securities America, Investacorp, KMS Financial Services, Securities Service Network (SSN) and Triad Advisors, which launched a hybrid-RIA affiliation model in 1998.
“Second, because we share the same clearing firms — NFS [National Financial] and Pershing — on both sides, there is no repapering and no [real] differences for the advisors,” he said.
Still, Price added, “Between the signing and close [of the deal], if we thought there were some areas [where] it was necessary,” it might consider some type of retention program.
“At this point, it doesn’t feel that way to us. The change is only positive in terms of bringing more capabilities … to advisors … ,” he explained. “We will have more to think about on that [before the deal closes]. But it’s really business as usual for the advisors.”
Price is set to become head of the merged entity. He’s held the position for three years. (Earlier this year, private equity group Reverence Capital Partners bought a majority stake in Advisor Group from Lightyear Capital, PSP Investments and others.)
As for any changes to the back-office operations of the combined broker-dealer groups, Price said, “It’s early days.”
The executive added that the merged firm is “committed to the existing cultures, multi-branding and multi-clearing [of its network]. There’s no other brand that looks like this,” Price explained.
“Having a community of like-minded advisors is important,” he said. “The independent space is a lonely business [in which it’s best] if you do not have the feeling that you are just a number among 11,500.”
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