What You Need to Know
- Advisor Group alleges Venerable breached the terms of a marketing agreement between the firms.
- Private equity firm Reverence Capital Partners is a majority owner of Advisor Group and a part owner of Venerable.
- The broker-dealer is seeking at least $900,000 in compensatory damages.
Advisor Group is seeking at least $900,000 from Venerable Insurance and Annuity Co. and Directed Services, alleging the variable annuity firm and its affiliate breached the terms of a marketing and support agreement by abruptly terminating the deal and payments made to the broker-dealer under the pact.
In a complaint filed against Venerable and Directed Services in U.S. District Court for the Eastern District of Pennsylvania, Advisor Group said that, on or about Aug. 31, 2015, the defendants entered into a letter agreement with the BD under which Advisor Group would provide marketing services and support to Venerable and Directed Services for certain insurance products.
The complaint was first reported by InvestmentNews, which pointed to a twist in the dispute: Private equity firm Reverence Capital Partners is a majority owner of Advisor Group and a part owner of Venerable.
Reverence Capital Partners declined to comment on Tuesday. Advisor Group and Venerable did not immediately respond to requests for comment.
As part of the agreement, Venerable and Directed Services were to provide Advisor Group with a quarterly “marketing allowance” with a “floor” set at $300,000 annually, according to the complaint. If the allowance wound up being less than $300,000, the difference was to be included as a supplement to the fourth-quarter payment, Advisor Group said.