Pershing Advisor Solutions LLC in Jersey City, N.J., meanwhile, has instituted a host of new strategies to support and help clients grow their firms as the ranks of its RIA clients swell, says Kim Dellarocca, director of global marketing.
Big Changes In B-Ds
A number of big changes took place in the broker-dealer space in 2010. In the third-quarter, giant player Securities America Inc., the La Vista, Neb.-based firm with $53 billion in client assets and 1,900 registered reps, named a new CEO from its own ranks, Jim Nagengast, to replace 23-year company vet Steve McWhorter, who retired. Nagengast has been with the company since 1994.
Securities America is also hitting the acquisition trail. Among the smaller broker-dealers it has acquired is Brecek and Young Advisors Inc., Folsom, Calif., which came aboard in late 2008 with more than 300 advisors, after Securities America bought the firm from Securities Benefit Corp. in Topeka, Kan. Securities America is also actively seeking and attracting large branch offices to fold into its network. The firm's strategy is not just to recruit individual advisors one at a time but also to help branch managers build groups. In September 2010 it added the firm Equitas Financial in Grand Rapids, Mich., which brought along 45 new independent advisors. In 2009, Securities America scooped up one of the Financial Network's largest supervisory offices-Nate Bergeland/USAdvisors Network-as a new branch.
Securities America also has a concerted effort under way to grow in the financial institution channel.
From 2006 to the end of 2009, the company saw a 250% growth in gross dealer concession per advisor (GDC, the gross trails, fees and commissions), according to Gregg Johnson, the company's senior vice president of branch development. "We've seen some leveling off and slowdown in 2010, but we're optimistic for 2011. We think that advisors have seen their markets and practices stabilize, and are now ready to contemplate a change to a better position."
The industry has also seen a new player emerge this year from the rollup of three former ING Advisor Network brokers-dealers into a new firm, Cetera Financial Group, on Feb. 1. The three companies-Financial Network Investment Corp., Multi-Financial Securities Corp. and PrimeVest-were bought by private equity firm Lightyear Capital LLC and its fund Lightyear Fund II LP. The three firms have kept their names, but operate under the umbrella of Cetera, headquartered in El Segundo, Calif. Valerie Brown, formerly the CEO of ING Advisors Network, continues to lead the business as CEO of Cetera.
The Financial Network, also based in El Segundo, has 2,000 independent advisors, 1,300 branches and $310 million in revenues. The firm is going after individual reps and small supervisory offices but also after large advisory groups with more than $5 million in GDC, says Jack R. Handy Jr., president and CEO.
"The bear market and low interest rates have impacted the profitability of small B-Ds," Handy says, "so many of them are looking at how to stay in business but [also] outsource their back-office operations. We're the perfect solution for them because they can outsource technology, commissions and net capital issues, and bring their organization to us intact and focus on the sales and marketing side."
Handy says most of the new reps coming to the firm are from other independent B-D firms. "We also have a lot of reps new to the business," he says, "and these tend to be second career people."
2010 was a new beginning for Brett L. Harrison, the president and CEO of Multi-Financial in Denver.