Ladenburg Thalmann Financial Services' $150 million purchase of Securities America, Ameriprise's independent broker-dealer unit, will greatly increase the size and reach of Ladenburg Thalmann, but isn't likely to shift the rankings of the largest independent firms in the financial advisory industry. At least not right away.
Ameriprise, with its nearly 8,000 advisors, was ranked No. 2 in annual sales in a survey conducted earlier this year by Financial Planning magazine, well behind giant LPL Financial, with its 12,600 advisors, and ahead of third-ranked Raymond James Financial.
Ameriprise, whose FAs operate for the most part as “branded” advisors not employed by the company, were, from both an organizational and accounting perspective, kept separate from the Securities America operation.
Securities America and its 1,700 advisors checked in No. 7 in total revenue in the 2011 rankings, just behind MetLife Securities and ahead of Northwestern Mutual.
Jonathan Dorley, a Ladenburg Thalmann spokesman, claimed the Miami-based acquiring firm plans to keep Securities America as a separate, independent unit, making it unlikely that the firm will make any dramatic moves in either direction in total revenue ranking this year.
“This is a transformational growth event for Ladenburg Thalmann," Dorley said. “It definitely puts us up in the big leagues.”
As Dorley noted in an interview with Financial Planning, “Ladenburg Thalmann owns Triad Advisors and Investacorp and it has a history of keeping both of those acquisitions operating as independent units. And that is how it plans to handle Securities America.”
Triad Advisors was ranked No. 42 on the 2011 Financial Planning list, and Investacorp was No. 60.
But even if one were to count the 1,100 advisors of Triad and Investacorp together with those of Securities America, the combined total of 2,800 financial advisors and the combined sales of the three operations would be unlikely to jump past MetLife Securities and cause a change in the Top 10 rankings.
Clearly the addition of Securities America to the much smaller Ladenburg Thalmann advisory operation is a big deal for the acquiring company, nearly tripling its forces on the ground (assuming that Securities America’s advisors, a number of whom left the firm during the months it awaited an eventual sale by parent Ameriprise, don’t continue to jump ship).
But even if all the advisors of Triad, Investacorp and Securities America are counted together, they do not come close to the 5,500 advisors working with sixth-ranked MetLife Securities.
Ladenburg Thalmann spokesman Dorley says the company has “no intention” to consolidate following its purchase of Securities America.
“Even where there are two offices in one location, we will not be getting rid of any advisors,” he said.
Nor, he added, are there any plans to look for savings in headquarters or back-office operations. “The intention is to simply expand the whole advisory operation,” he explained, adding, “Securities America will keep its same headquarters in Nebraska and will keep operating just as it has been doing.”
For more details and background on the Ladenburg Thalmann purchase of Securities America, take a look at these stories: