After tapping a new CEO and acquiring a major retirement-plan practice, a hybrid RIA firm with nearly 100 advisors and about $10 billion in client assets changed its broker-dealer.
Prime Capital Investment Advisors, which has 15 offices and an affiliated employer-plan firm named Qualified Plan Advisors, left Cambridge Investment Research for Private Client Services in late April. The suburban Kansas City RIA has nearly $8.4 billion in assets under management.
The move on the brokerage side of its business by Prime Capital preceded a similar BD switch earlier this month to PCS by an LPL Financial hybrid practice with $1.7 billion in client assets. The 50 to 60 affiliated practices of PCS span roughly 95 offices with 375 advisors nationwide, according to the firm.
Prime Capital joined after a couple of major announcements of its own. In late December, the ownership team of Scott Colangelo, Tim Hakes, Joe Hildebrand and Joe Zdeb tapped Glenn Spencer, the former global CEO of insurance brokerage Lockton, to be Prime Capital’s CEO and part owner.
The following month, Qualified Plan Advisors purchased Houston-based Ascende Wealth Advisers, which the company says brought about $4 billion in client assets to the firm. Prime Capital made the BD swap to retain brokerage services while aligning its relationship with its needs, Spencer says.
“We have a pretty robust in-house compliance organization, and we basically have all the capabilities to oversee our RIA business. We were getting limited value out of the broker-dealer in terms of compliance oversight of our fee-based RIA business, which was 80% of our business,” he says, noting the importance of the other 20% as well. “We have a lot of clients that are fee-based clients that are very interested in investment products that you can only get through a broker-dealer.”
A spokeswoman for Cambridge, Cindy Schaus, confirmed the exit by Prime Capital.
“We believe in the importance of independence, and this includes independent advisors making decisions for their business,” she said in an email.
The Overland Park, Kansas-based practice had spent seven years with Cambridge prior to aligning with PCS on April 25, according to FINRA BrokerCheck. Prime Capital first registered its RIA with the SEC in July 2017, and advisors who only provide plan services operate under the Qualified Plan Advisors brand.
PCS works with hybrid advisors who mostly have their own RIAs and want to keep some commissionable business, according to Steve Higdon, the Louisville, Kentucky-based IBD’s chief development officer. The IBD met the new recruits through Prime Capital's main RIA custodian, Charles Schwab, Higdon says.
“It was just a really good fit,” says Higdon, who describes his firm as “highly selective” about its affiliated practices. “They’re large, they’re growing and they wanted a hands-on partner.”
Spencer, who the firm says helped boost Lockton from $300 million in annual revenue and 10 offices to $1.5 billion in revenue and 1,000 offices in 11 years, has major growth plans for Prime Capital. However, quality “is way more important” than quantity in terms of recruiting and acquisitions, he cautions.
In addition to the branches in Houston and Overland Park, the firm’s offices include locations in San Francisco, Denver, Dallas, San Antonio, Minneapolis and several other major cities. Prime Capital will also be adding new offices in North Carolina and Indianapolis in coming months, Spencer says.
“We believe that we need to be the very best value proposition for our clients and end-clients. At the same time, we believe we need to the best value proposition for advisors,” he says, noting the firm’s compliance, marketing and other back-office capabilities.
“Our objective is to remove all the noise for our advisors,” Spencer adds, “to allow them to do what they’re really talented at and great at doing, which is providing financial advice to their clients.”