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John Hancock to sell Signator to Advisor Group in latest insurance pullback

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Advisor Group’s Royal Alliance Associates will acquire Signator Investors from John Hancock, as private-equity capital aided in another retreat from the independent broker-dealer space by an insurance company.

Advisor Group’s part-owner Lightyear Capital, which experts have identified as a possible suitor for Cetera Financial Group, moved to bring Signator, which is the No. 16 IBD by revenue, into the fold of the Jersey City, New Jersey-based No. 12 firm. The two sides did not disclose the purchase price.

Advisor Group announced the deal, which is expected to close in the fourth quarter, on June 21, and representatives for Signator confirmed it. The acquisition would merge two firms of roughly 1,800 advisors each and push Advisor Group’s headcount across its four IBDs to more than 6,800 advisors.

“I believe that the most critical component of a successful acquisition is cultural alignment,” Advisor Group CEO Jamie Price said in a statement, noting that both firms use the office of supervisory jurisdiction structure prevalent in the IBD space.

“With Signator and Royal, we immediately saw the compatibility between the two firms, which have a shared focus on the super OSJ business model and independent advisor community. This is an exciting new chapter for us all.”

Thirteen of the top 25 companies generated double-digit growth in 2017 as rivals close in on the perennial No. 1 firm.
June 4

The deal follows several other major retreats by insurance firms from the IBD space, often with private equity in the mix.

Insurance giant AIG sold Advisor Group in January 2016 to Lightyear and Canadian pension manager PSP Investments. Later that year, insurance brokerage and consultant NFP spun off its IBD unit in a deal with private equity firm Stone Point Capital that created the renamed Kestra Financial.

And just last August, Jackson National Life Insurance sold the assets of the four IBDs in the National Planning Holdings network to LPL Financial for $325 million. The purchase sent roughly 3,200 advisors to LPL, and rivals eagerly recruited from its incoming crop.

John Hancock’s parent firm, the global insurance, asset management and other financial services firm Manulife, also unveiled plans on June 21 to “transform” its Canadian business and reduce its workforce by 700 employees. A spokeswoman confirmed the Advisor Group deal.

"While the two announcements today are unrelated, both are part of our global strategy to support our strategic priorities, specifically expense efficiency and portfolio optimization,” Signator spokeswoman Melissa Berczuk wrote in an email.

“We are pleased to enter into this agreement to sell Signator to Advisor Group,” she continued. "The capital from this transaction will help us execute on our growth priorities and will provide Signator’s firms and advisors with significant growth opportunities of their own."

The two firms produced more than $900 million in combined revenue last year, according to Financial Planning’s annual FP50 survey of the largest IBDs.

In addition to the roughly 3,600 advisors, the merged Royal Alliance would manage some $115 billion in client assets with the addition of $50 billion from Boston-based Signator. Royal Alliance also added a record 171 new advisors with $4 billion in client assets through recruiting in 2017.

“We are confident that our decades of experience working with business owners and independent advisors will enable us to deliver immediate value to Signator’s advisors,” Dmitry Goldin, the CEO of Royal Alliance, said in a statement. “We are excited to welcome them into the Royal Alliance family, and to provide access to the wide range of capabilities I believe will drive efficiencies and growth in their businesses.”

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