B-D Battle for Independent Advisors Heats Up

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Securities America has ramped up the fierce competition for independent advisors, launching a new RIA targeting advisors with between $50 million and $250 million assets under management.

The new firm, called Arbor Point Advisors, is structured as a joint venture with Securities America and minority partner NorthStar Financial Services Group. It's  designed to “attract new advisors to the organization who want to work with outside custodians and don’t want the hassle of running their own RIA and spending time on technology, compliance and administration, and want to spend more time with their clients” Securities America president and chief executive Jim Nagengast tells Financial Planning.

Arbor Point will let advisors choose from major custodians such as TD Ameritrade, Schwab and Fidelity Institutional -- a “major difference” distinguishing from similar ventures from other independent broker-dealers competing for RIAs, says Arbor Point president Curtis Reed. “With Arbor Point they’re not locked into a self-clearing platform,” Reed says.


The move comes among new efforts by the big B-D firms to lure independent advisors.

Commonwealth executives rolled out their own new RIA-only affiliation model two months ago, thinking it would help them accomplish two things: retain advisors who were looking to dump their commission business and go fee-only, and attract new advisors, predominantly breakaway brokers looking for a high-end way to go RIA.

But the company says it’s been pleasantly surprised by the interest from existing RIAs looking for a different service provider. To date, the company has discussed the option with a few dozen advisors, with a half-dozen good candidates in serious conversations, say Commonwealth executives.

“By far the largest numbers of contacts are already RIA-only” advisors, says Andrew Daniels, Commonwealth’s managing principal for business development. “I never expected that.”

Meanwhile, Raymond James this week hired four new regional directors earlier this week for its RIA custody unit, Investment Advisors Division, and announced plans to expand the operation.


Tim Welsh, president of Larkspur, Calif.-based Nexus Strategy, says that Arbor Point's separate branding will make the new firm stand out. "What is different about this approach from previous attempts to target the hybrid advisor is that two strong organizations are coming together to create a joint venture," he says -- "whereas the other big IBDs, [such as] LPL, Raymond James, have chosen to create a separate RIA unit under their brand."

Arbor Point’s affiliation with Securities America and NorthStar gives the new venture another competitive advantage, Nagengast argues.

“Arbor Point isn’t a roll-up and is different from firms offering pre-packaged RIA solutions,” Nagengast says. “Advisors maintain their autonomy and unlike a start-up RIA, they are supported by 400 Securities America and 400 NorthStar employees.”

While the move targets hybrid advisory firms that want a turnkey RIA platform, Reed -- a CFP who operated his own RIA, Windy City Wealth Management -- says overlooked smaller firms also present a market opportunity.

“Many of the companies that service RIAs have moved their focus upstream to larger firms,” he explains. “For every advisor with $1 billion in assets looking to form or join an RIA, there are hundreds of firms with $100 million who need the same support to serve their clients. The traditional advisor office is feeling less valued and a little lost. There is a strong need for focused practice management and business growth support.”

Arbor Point will use NorthStar subsidiary Orion Advisor Services for new account processing, fee billing, performance reporting and technology. Securities America will provide commission-based business processing, compliance and supervision, as well as practice management programs and retirement income distribution.


The new venture marks a new step in Securities America’s comeback. The firm nearly went under in 2011 after its parent company at the time, Ameriprise Financial, reached a wide-ranging $150 million settlement with investors who had sued Securities America over sales of private-placement securities that the SEC said in 2009 were fraudulent.

After the settlement, Ameriprise sold the unit off to Ladenburg Thalmann Financial Services in 2011. Since then, Securities America bought Investors Security of Suffolk, Va., as a “superbranch” last year, and has been actively working to recruit other advisors.

For the last two years “we’ve kept our heads down, worked hard and built relationships with advisors one at a time,” Nagengast says.

Rachel F. Elson contributed to this story

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