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Advisor Group roadshows yield 95% retention in Signator deal

Advisor Group’s Royal Alliance Associates has completed one of the largest deals in the independent broker-dealer space this year, retaining 95% of production from John Hancock’s Signator Investors.

The Lightyear Capital-backed network added 1,860 advisors and 93% of Signator’s roughly $50 billion in assets under administration in closing the deal with Hancock parent Manulife on Nov. 2, according to the firms. Advisor Group retained 96% of the shuttering No. 16 IBD’s 1,933 advisors.

Other than one major ex-Signator team snagged by LPL Financial, none of Advisor Group’s rivals announced new additions from the IBD absorbed by Royal Alliance. Only three advisors out of a sampling of about three dozen top advisors mentioned in Signator press releases in the past two years chose other firms.

Advisor Group CEO Jamie Price cited “cultural alignment” between Royal Alliance and Signator while announcing the deal in late June. As a comparison, LPL kept less than 72% of production and only about 1,850 advisors out of the 3,200 from National Planning Holdings after acquiring the assets of the network last year.

Revenue at Royal Alliance and Signator Investors

Experts had also cited Signator and Royal Alliance's identical clearing firms of Pershing and Fidelity’s National Financial Services and similar office of supervisory jurisdiction structures as helpful for retention. The network could add some 600 more representatives next year under a deal for the advisors of Allianz’s Questar Capital.

Price and Dmitry Goldin, CEO of Jersey City, New Jersey-based Royal Alliance, met with 800 Signator advisors in 11 roadshows held by the private equity-financed network’s leadership. The executives spoke with a few hundred more advisors at Signator’s conference in September, the firm says.

Advisor Group had planned to provide onboarding assistance to Signator’s advisors. However, such recruiting packages are typically not very big offers when there are no major differences under an acquirer, such as a custodial switch or a structural change to practices, says recruiter Jodie Papike of Cross-Search.

“Royal has really made it a focus to keep as many things the same as they can, from what those advisors are used to. It makes it pretty streamlined for advisors and a pretty simple process in deciding to stay put,” Papike says. “They felt like it was equivalent, or in some cases, an upgrade.”

Firms’ head counts show how they’re responding to a challenging time in which experts predict the number of advisors to fall in coming years.
September 17

Representatives for Advisor Group said Price and Goldin were not immediately available for interviews, but they provided answers to some emailed questions. John Hancock spokeswoman Melissa Berczuk issued a statement saying that the firm is “pleased with the successful conclusion” of the deal.

Signator President Chris Maryanopolis changed his affiliation to Royal Alliance on the date of the closing, according to FINRA BrokerCheck. He will assist Advisor Group with the transition, according to spokeswoman Srishti Assaye, who had no comment on a question about his ongoing status with the firm.

Advisor Group and Royal Alliance, the largest of its four IBDs and the No. 12 firm in the space by annual revenue, offered positions to a “significant percentage” of Signator’s staff, Assaye said in an email. Signator’s managing partners are acting as individual OSJ groups at Royal Alliance.

The IBD network carried out the tape-to-tape transfer of assets at Pershing, NFS and Envestnet over the weekend. Directly held assets will move over in coming weeks, according to Assaye. Royal Alliance added 95% of Signator’s gross dealer concessions under the deal, she added.

Advisor Group’s successful retention came from “the cultural fit of the two firms, the strong value proposition of both Royal Alliance and Advisor Group, and the overall ease of the transition,” she said. The two sides have not disclosed the financial terms of the deal.

Notable additions to Royal Alliance after the acquisition include Edgewood Financial Network Managing Partner Brian Heapps, Signator’s ex-president. Brian Holmes’ Signature Estate & Investment Advisors, which has $8 billion in assets under management, also joined the firm, BrokerCheck shows.

Additionally, Advisor Group held on to advisors Jeffrey Owens, Alice Tang and Jonathan Owens of BPG Wealth Management, Signator’s 2017 practice of the year. The sampling of 34 top advisors came from press releases issued by Hancock to announce the firm’s prize-winning advisors and forums for women advisors.

Onetime top 10 advisor Judith Tengler moved to LPL from Signator a couple of weeks before the announcement of the deal, BrokerCheck shows. Donald Healey, another ex-member of Signator’s top 10 advisors, went to Cambridge Investment Research the month after the agreement.

Thomas Whelan of Whelan Scott Asset Management also left Signator for Cambridge last month. The three advisors didn’t respond to requests for comment on their moves, although they represented a very small portion of Signator's representatives leaving from Royal Alliance’s incoming crop.

Advisor Group’s three major acquisition deals this year could help push its $1.4 billion in revenue last year above the $1.8 billion generated by rival Cetera Financial Group. The 7,700-advisor network’s sale of a majority stake to Genstar Capital represents the largest acquisition in the IBD space this year.

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