RCS Capital Corporation said today that it has agreed to purchase Girard Securities Inc., a San Diego-based independent broker-dealer with 250 advisors and $10 billion under administration.
The transaction is the latest in a string of deals by RCS Capital Corp. (RCAP) and its executive chairman, Nicholas Schorsch, together with Larry Roth, CEO of Cetera Financial Group, who runs RCAP’s retail advisor unit. Also this month, RCAP announced it was buying VSR Group Inc., a $12.3 billion Overland Park, Kan.-based firm with 264 advisors.
About 60 percent of Girard’s business is done directly with product sponsors, 20 percent is general securities business and another 20 percent is fee-based. The deal is expected to close late this year or early next year.
Together with VSR Group, the Girard acquisition will give RCAP a base of more than 9,700 advisors and close to $250 billion in assets. Girard will continue to operate under current management with the "Girard" brand, RCAP said.
“We believe RCAP's commitment to maintaining the separate identity and culture of Girard was one of the most attractive aspects of this combination,” Susie Woltman Tietjen, Girard CEO, said in a prepared statement.
Girard was founded in 1986 by Woltman Tietjen’s father, Richard Woltman, currently Girard’s chairman emeritus of the board. The senior Woltman, a pioneer in the independent broker-dealer industry, in 1975 founded the predecessor firm of First Allied Securities, which is now owned by RCAP. Woltman and his wife Kaye later acquired and merged Spelman & Co. Inc. and Sentra Securities Corp., eventually selling to SunAmerica Inc. Kaye Woltman passed away in 2010.
Woltman Tietjen was not immediately available, but in an interview last April with Financial Advisor, she stressed the importance of personal relationships with advisors. “Bigger isn’t always better” for an independent firm, she told FA. “It just depends on how bigger is structured. Bigger can be better if the [large] entity understands the important of the service component and the relationship component.”
One advantage larger firms offer is a bigger pool of potential partners for succession planning purposes, Woltman Tietjen told the magazine. In today's statement, she said the sale to RCAP will provide “greater opportunities for our advisors and a more diverse service offering.”
Girard and VSR will be joining RCAP’s conglomeration of broker-dealers that operate as Cetera Financial Group. The group includes Cetera Advisors, Cetera Advisor Networks, Cetera Financial Institutions, Cetera Financial Specialists, First Allied Securities, the Legend Group, Investors Capital Corp., J.P. Turner & Company and Summit Financial Services Group.