A small Indiana-based broker dealer firm with almost $1 billion in client assets has partnered with Securities America. Dalton Strategic Investment Services will be joining Securities as a super OSJ -- or "super branch" -- of the independent broker-dealer firm.
As a super-OSJ, the firm, which has about 60 advisors in 18 states, will have a greater degree of control over its practices than a standard branch -- letting it maintain its individual culture and oversight over its advisors.
Gregg Johnson, senior vice president of branch office development with Securities America, says that part of the reason Dalton was designated a super OSJ was its size and various locations.
"That has been the big appeal for us with Dalton," Johnson says. "They're able to continue to provide a high level of service and continue to do that for their advisors and provide the culture that has made them successful."
For a smaller firm, such linkups offer multiple benefits, explains Matt Lynch, principal at Tiburon Strategic Advisors in Tiburon, Calif.
"There are some obvious benefits to that," Lynch says. "Part of that is access to the scale, the technology, the resources, the product depth. It allows smaller firms, [which] may not have been able to keep up with the capital requirements or investment necessary to provide state-of-the-art services to their advisors, to do so in a meaningful way."
Independent broker-dealers who pick up smaller B-D firms can often streamline the transition process, Lynch adds: Instead of going through 10 or 20 reps to get that done, they're able to move these over and, depending on how they structured the deal, [smoothly address] the regulatory requirements of moving accounts over."
Indeed, the appeal of the super-OSJ model was a large factor in Dalton Investment Services' founder Steve Dalton's decision to join Securities America -- which itself is part of the Ladenburg Thalmann network of IBDs.
"The model allowed us to have a certain level of autonomy," notes Dalton, who says he considered 10 other broker-dealers before aligning with Securities America.
"We're as independent as we could be under their umbrella," he adds. "We still maintain an identity as a firm while leveraging their products, technology and our ability to use their resources to recruit -- so we could marry those two together and still be autonomous."
Securities America, ranked No. 9in our most recent FP 50 rankings, has made six similar deals with small broker-dealer firms in the past.
Most recently, it picked up 30 advisors from Iowa-based Eagle One Investments last year. According to Johnson, the IBD has already looked at "dozens" of potential deals and will continue to do so.
Securities America is "looking for additional opportunities in the space," said CEO and president Jim Nagengast in a statement.
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