J.W. Cole set to go nationwide with deal

New firm has 400 independent-contractor reps

Nov 25, 2012 @ 12:01 am

By Dan Jamieson

Tampa, Fla.-based broker-dealer J.W. Cole Financial Inc. is acquiring Financial Advisers of America LLC of Carlsbad, Calif., the firms said last week.

J.W. Cole, which has about 300 independent-contractor representatives, will add 100 from FAA.

Terms weren't disclosed, but no outside investors played a role, said John Carlson, founding principal at J.W. Cole.

The acquisition must be approved by the Financial Industry Regulatory Authority Inc.

DUAL HEADQUARTERS

The combined firms will operate under the J.W. Cole name, with dual headquarters.

The merger will increase scale and create a national footprint while maintaining a more family-style business than the national broker-dealers, principals at the firms said.

About two-thirds of the brokers affiliated with J.W. Cole are east of the Mississippi, and about 90% of FAA's reps are west of that divide.

Key to the deal was the good cultural fit, said FAA chief executive Jodi Johnston.

“As we started to get to know each other, through networking and through our [joint clearing firm] National Financial [Services LLC], we heard a lot about each other, compared notes, became friends and found [we were] so similar” in attracting advisers who want a smaller, independent operation, she said.

“Many are tired of the really big corporate B-Ds,” Ms. Johnston said.

Smaller firms with a national reach are “what's missing in the industry,” Mr. Carlson said. “The only press you get about small firms is [when they are] going out of business,” he added.

“Private-equity and venture capital [ownership] just doesn't cut it,” Mr. Carlson said.

djamieson@investmentnews.com Twitter: @dvjamieson

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