Harold C. Brown & Co. began during the Hoover administration, weathered numerous economic cycles, thrived even as its hometown of Buffalo suffered its Rust Belt crisis, and altered its business model to change with the times. All the while, it built a loyal client base--a number of whom are the progeny of individuals served by the company's namesake founder. But by the end of this year's first quarter, the advisory firm will be history.

Brown says its self-described friendly breakup resulted in part from the increased regulatory burden that adds layers of complexity to a company operating as both a broker-dealer and a registered investment advisor. But more than anything, says CEO Katherine Christoferson, the split resulted from divergent ideas within its five client service teams on how to best serve their clients. 

"We came to realize that each of our teams want to do things slightly different," she says.

The firm was founded as a broker-dealer in 1932 by Harold C. Brown, and that was its calling card until it became dually licensed as a broker-dealer and RIA in 1974. It changed its business focus to a fee-based advisory model and added financial planning services in the late 1990s. Before the split, it had nearly $800 million in AUM.

Through the years, it has hewed to its value-oriented, long-term investing approach. And it prided itself on its stock picking acumen. These days, Christoferson says, some of Brown's advisors would rather construct portfolios with mutual funds and exchange-traded products than rely on picking individual stocks and bonds. And she adds that not all of its advisors embrace financial planning. "We have one team who would rather outsource that."

Things came to a head last year when Brown held strategy meetings to discuss its future. The lease on its 38th floor office in the HSBC Center, with its commanding view of Lake Erie and downtown Buffalo, was up for renewal this May. And some of its major vendor contracts were set to expire that month, too. During those discussions, it became clear that changes needed to be made.

Christoferson says the firm collectively realized it'd probably be better off finding a partner who could provide the tools and resources that each team felt it needed. But as the firm explored possible partners to affiliate with, none appealed to all the teams. "It was at that point we decided to break up," she says. "The good news is that it's a very amicable split. We're all friends and nobody is suing anyone."

Christoferson says the company's split is based on the revenue controlled by each client service team, with each team taking their fair share with them. "Nobody is stepping on anybody else's toes," she notes.

Christoferson's team will become an independent advisory practice at Wells Fargo Advisors Financial Network, the independent brokerage unit of Wells Fargo & Co. Another Brown employee, who acted as a one-person team, will join the broker-dealer Wells Fargo Advisors as an employee. Among Brown's three other teams, one has joined United Capital Financial Advisers, and two have become affiliated with Raymond James' RIA division. 

The clients' reaction to the break up has been positive, Christoferson says, particularly after they were told they'll still be working with their current advisors. "It's basically going to be business as usual but with a different name on the statement."

It's sad when a long-standing business closes shop, but life marches on. "There's certainly a nostalgia for the name and the history of the company," Christoferson says. "But it's time."

-Jeff Schlegel