Seeking to be ‘the best, not the biggest,’ Atria to buy fifth midsized IBD
With incumbent wealth management firms racing to buy up longtime rivals, a private equity-backed upstart is taking a different approach.
Atria Wealth Solutions agreed to purchase independent broker-dealer Western International Securities in what would be the wealth management holding company’s fifth IBD acquisition since launching in 2017, the parties said Nov. 21. The Lee Equity Partners-backed buyer and Pasadena, California-based seller didn’t disclose terms of the deal.
Upon the expected close in the first quarter, Western’s 400 advisors with $13 billion in assets under administration would bring the total at Atria’s five IBD subsidiaries to 2,500 with nearly $80 billion. Atria’s last deal added Next Financial Group to its ranks earlier this year.
CEO Doug Ketterer calls Western a strategic acquisition for Atria rather than “a scale play,” noting the firm expects to do more deals in cases where they make sense. He spoke after Advisor Group announced its acquisition of the five-IBD network Ladenburg Thalmann and the first reports that Charles Schwab is acquiring fellow custodial giant TD Ameritrade.
“We already have the scale we need to provide what advisors need to best serve their clients,” the former Morgan Stanley executive said in an email. “We are not a roll-up, not a consolidator, not an aggregator. We are only interested in being the best, not the biggest — we will leave that to others.”
Ketterer and Western CEO Don Bizub — who will remain in his role atop the independent subsidiary after the deal — met at an FSI conference a few years ago, Bizub recalls. Their teams negotiated the deal over the past eight to nine months.
“I was very impressed with Doug, and we stayed in touch. I was able to see a lot of the technology that they're able to develop by not being bogged down by a legacy platform,” Bizub says. “I really think that we'll be able to get to market faster by partnering with Atria. This is more about, ‘fast fish eats slow fish’ not ‘big fish eats little fish.’”
The nearly 25-year-old IBD enables advisors to use their own hybrid RIAs rather than its corporate RIA, along with a different kind of affiliation it calls a turnkey branch. The firm provides office space, tech and support staff to roughly 100 indie advisors under the model, Bizub says.
“We're allowing more people to come to our world and to be independent,” he says. “It's obvious the world is going this way. We're just a catalyst to help change the world of financial services.”
About $2 billion out of the firm’s AUA comes from the assets under management on Western’s corporate RIA. Bizub is also the CEO of a firm called Hamilton Grant, which isn’t being acquired by Atria but provides advisors with back-office support for investment banking services.
Atria’s other IBD subsidiaries include bank-channel BDs CUSO Financial Services and Sorrento Pacific Financial, along with fellow midsized IBD Cadaret, Grant. The record M&A activity of recent years displays how wealth management is a “very fragmented industry,” Ketterer says.
“We have built something different in the marketplace — we've built an operating model that provides advisors with optionality,” he says. “We believe that personalized choice will become even more critical in the future and those firms that can provide scalable optionality will prosper.”