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Securian affilates’ merger yields $950M firm amid record M&A

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A Securian Financial Services firm acquired another practice within its independent broker-dealer in a sign that last year’s record M&A activity has spilled into 2018.

Diamond State Financial Group’s March 12 merger with Wechsler Marsico Simpson expands Diamond State from 28 advisors to 35 advisors with $950 million in assets under administration, the firm says. The Newark, Delaware-based practice also became the seventh-largest firm at Securian, the No. 18 IBD.

M&A deals in wealth management set a record for the fifth straight year in 2017, reaching 168 transactions, according to Echelon Partners. St. Paul, Minnesota-based Securian itself took part, spinning off No. 44 IBD H. Beck in a deal with Kestra Financial giving Securian a minority stake in Kestra.

An increase in what Echelon calls “peer-to-peer” transactions has fed into the record M&A activity. One Securities Service Network firm, for example, has acquired at least 15 other practices in the past 10 years, and three LPL Financial practices combined into a $2.6 billion firm in the fourth quarter.

Among recent career changes, Merrill Lynch lost brokers managing $2.2 billion to rival J.P. Morgan Securities.
February 20

Diamond State advisors Raymond Bree, Christopher Burgos and Hardik Shah make up the senior management of the newly merged firm. Media, Pennsylvania-based Wechsler Marsico Simpson President Dominic Marsico Jr. serves as an associate partner.

Neither Bree nor Marsico returned requests for comment, but Bree issued a statement in a press release saying Wechsler’s clients will keep the same advisors under the Diamond State brand. Marsico also released a statement explaining the rationale behind selling the practice to Diamond State.

“Diamond State Financial Group will help provide added resources and services for Wechsler Marsico Simpson clients who will continue to receive the customized solutions they have counted on for more than 33 years,” Marsico said.

Marsico’s practice has been aligned with Securian for 22 years, while Bree has been with the IBD for 28 years. The combined practice spans 9,000 clients, including specialty divisions at both Wechsler and Diamond State for medical and dental professionals.

Securian’s roughly 40 firms have about 1,100 advisors. The firm’s revenue ticked up 3% to $325.6 million in 2016 despite contraction across the IBD space that year, according to the latest available figures from Financial Planning’s annual FP50 survey.

Securian’s vice president of individual career distribution, Anthony Martins, released a statement praising the deal and expressing gratitude for Marsico’s two-decade relationship with the firm.

“We are excited about this merger between two longstanding Securian-affiliated firms,” Martins said. “Securian is proud of our relationship with both of them and wish them continued success together.”

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