Securities America, Inc., an Omaha, Neb.-based independent broker-dealer, announced it signed a definitive agreement to buy Brecek & Young Advisors, Inc., a full-service broker-dealer and RIA in Folsom, Calif. Terms of the deal weren't disclosed.
Brecek & Young has more than 300 advisors with roughly $42 million in gross revenue and more than $1.3 billion in fee-based assets. With Brecek & Young expected to join the fold by late 2008, the bulked-up Securities America would have roughly 2,000 independent advisors with about $550 in revenue and $15 billion in assets under management. The deal is pending regulatory approval.
"What Securities America was particularly interested in is our work in the area of retirement planning," says Chris Ranney, Brecek & Young's president and CEO. The company was started in 1992 by Roland Brecek and Hal Young, a couple of educators who worked with 403(b) plans on the side. That eventually became more lucrative than their days jobs, so they left the education field and started their own financial services company. They bought a securities firm in Cincinnati in 2001, and expanded their retirement market niche to include 401(k) and 457 plans.
Since 2004, Brecek & Young has been a wholly-owned subsidiary of Security Benefit Corp., a financial services company in Topeka, Kan. It was Security Benefit that put Brecek & Young on the trading block. "Security Benefit refocused on its core competencies and decided it was in the best interest for all parties to find a new owner for Brecek & Young," Ranney says.
An investment banker representing Security Benefit contacted Securities America about Brecek & Young, and Securities America Chairman and CEO Steve McWhorter says as talks progressed it was evident that Brecek & Young was a good match both from company culture and growth strategy perspectives.
McWhorter says the deal gives Securities America's existing advisors access to Iron Point Capital Management, Brecek & Young's internal fee-based asset management system. In return, Securities America provides various practice management tools, marketing support, and its own wealth management programs.
McWhorter says his company grew revenue by more than 15% last year, and that it's looking for further acquisitions to support similar revenue growth going forward. "We'll continue to look responsibly for other broker-dealers, branch offices and individual producers," he says.Securities America is a wholly-owned subsidiary of Ameriprise Financial. It will retain Brecek & Young's Folsom and Cincinnati offices, and Ranney will report directly to McWhorter.