Ladenburg Thalmann Financial Services' growing national portfolio has expanded again.

Ladenburg finalized a deal that brings Seattle-based regional powerhouse KMS Financial Services -- with over 300 independent financial advisors and around $14 billion in client assets -- into its independent broker-dealer network, which already includes Securities America, Triad Advisors and Investacorp.

KMS will operate as a stand-alone subsidiary of Ladenburg with its veteran  management team intact -- including Mark Hamby, the firm's chairman and chief executive, and president and chief operating officer Eric Westberg, Hamby says.

The firm, which was founded in 1971 as a spinoff of investment firm Frank Russell, had revenues of approximately $84 million for the 12 months ended at the end of June; it ranked No. 55 on this year's FP50 ranking of the biggest independent broker-dealers.

The Ladenburg network reported a combined total of $721 million for this year's FP50, which is based on 2013 full-year data. Adding in KMS, would increase that combined revenue to around $800 million.

That wouldn't be enough to have moved Ladenburg from its position as the industry's fourth-largest network, behind the combined RCS/Cetera Financial Group ($1.59 billion), Advisor Group ($1.2 billion) and National Planning Holdings ($963 million).


Around 80% of KMS' advisors, who are about equally divided between fee and commission-based business models, are based in Washington, Oregon and Idaho, according to Hamby, a 31-year veteran of the firm.

The firm prides itself on its broad base of advisors and clients and its grassroots appeal, eschewing advertising and relying on referrals for new customers, he adds.

Discussions with Ladenburg started around seven years ago, and culminated earlier this year as a result of "the right timing, the right people and the right structure," Hamby says. "We treasured our independence, but wanted to make sure that independence was a strategy and not a fetish. We see the [acquisition] as more of an alliance where we can share information in our different areas of expertise and broaden the management bandwidth of our firm."

KMS will have access to Ladenburg's platform of services, "while at the same time maintaining their unique identity and culture," Richard Lampen, Ladenburg’s president and CEO, said in a statement. 

Although KMS is open to expanding beyond the Pacific Northwest, Hamby says, most of its advisor growth is likely to remain there because of word-of-mouth referrals among existing advisors.

"Our hallmark has been trying to be a flexible and cost-effective provider for what established independent professionals really need from a B/D umbrella," Hamby says.

Read more:


Register or login for access to this item and much more

All Financial Planning content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access