First Allied’s move away from Advanced Equities Financial Corp., in a
First Allied, founded in 1994, has built a name as a strong and profitable option for advisors who want to serve mass affluent investors -- or at least investors on the lower rungs of high-net-worth.
“This was probably a long time coming,” Ryan Peterson, president of Wisdom & Wealth Solutions, an independent advisory firm in Raleigh, N.C., said in a telephone interview. “There always seemed to be a culture clash between Advanced Equities and First Allied. I am more of a fan of First Allied.”
Peterson’s practice affiliated with First Allied after the San Diego-based firm acquired its legacy broker dealer, Greenbook Financial Services, about five years ago. Although Ryan’s practice is largely independent, he still uses First Allied’s clearing services for certain clients’ accounts.
Officials at First Allied and Lovell Minnick declined to disclose the terms of the transaction, which is expected to close in the fourth quarter.
On the business side, First Allied President Adam Antoniades has been with the firm for 17 years, shepherding it through its 2002 sale to Wells Fargo, its 2005 buyout by Advanced Equities and now its independence, in partnership with Lovell Minnick. It has also completed a number of acquisitions in the independent broker dealer space.
“This is not their first rodeo,” said Larry Papike, founder of Cross Search, a recruiting and executive search firm in the independent broker-dealer channel. “I haven’t heard anything about anyone looking to move around.”
Specifically, Advanced Equities has a name in offering savvy HNW and ultra-HNW clients opportunities in venture capital deals on the cusp of initial public offering.
First Allied will continue to offer its advisors access to those products, Adam Antoniades, president of First Allied, said during a telephone interview Monday. The firm, however, wanted to focus on helping advisors grow successful financial planning practices managing the complex needs of mass affluent investors.
“First Allied’s reached a critical size where, it really commands, needs and requires an exclusive focus,” Antoniades said. “If we are going to execute our long-term vision and mission, it is important that we have a real focus on the business.”
For its part, Lovell Minnick Partners has been focusing on First Allied for at least a couple of years, said Robert Belke, a managing director of Lovell Minnick Partners.
“The company has been visionary,” Belke said. “An example of that is an early focus on education for advisors, and the growth of existing advisors.”
Also a plus, said Belke is that First Allied has the scale to serve the mass affluent market in a profitable way. The San Diego-based firm has about 1,000 financial advisors in 500 branches across the country.
Looking ahead, Antoniades says Department of Labor proposals to define a fiduciary are likely to impact registered investment advisors greatly.
The DOL and members of Congress are currently debating whether the proposals are calibrated properly, because they might bring workplace sponsored defined contribution plans under regulation by the Employee Retirement Income Security Act of 1974, or ERISA. If that happens, industry professionals worry that RIAs could come under costly restrictions on how they do business.
“When you consider that 30% of all accounts in the industry are RIA accounts,” Antoniades said, “I think there are some significant challenges being contemplated.”
Also, Antoniades firmly supports the idea of one standard of advice for all financial planning and wealth management professionals.
As if the industry itself were not changing enough, First Allied’s decision to break off from Advanced Equities might, naturally, prompted some advisors to assess whether they want to stay at the firm. Industry professionals, though, credit Antoniades with leadership skills that should keep its advisor relationships intact.
“Adam is a tremendous field leader, and one of the sharpest in the industry,” Peterson said. “He’s been with FA from the beginning as well. His presence will be what helps the retention more than anything else.”
