With business booming, Schorsch's RCS Capital eyes further growth

Reported $2.28 in adjusted earnings per share in first year as public company

Feb 12, 2014 @ 11:19 am

By Bruce Kelly

+ Zoom

On the back of booming sales of nontraded real estate investment trust, RCS Capital Corp. reported $2.28 in adjusted earnings per share for last year, its first year as a publicly traded company.

The company, which released its quarterly results on Wednesday, reported 28 cents a share in adjusted earnings per share in 2012.

“We have achieved a great deal since our [initial public offering],” chief executive Nicholas Schorsch said during a conference call with investors Wednesday.

RCS Capital, which met Wall Street's guidance with its earnings, is building the second-largest independent broker-dealer network — 9,000 registered representatives and financial advisers — through several acquisitions that it announced last year, he said.

Independent broker-dealers and their reps last year sold $8.6 billion in shares of nontraded REITs affiliated with RCS Capital, which is the wholesaling and distributing broker-dealer for those REITs. At $803 million in 2013 revenue, that business line is the lion's share of the company's revenues.

RCS Capital, however, has been on a breakneck path of growth and diversification away from the sales of nontraded REITs. It became a public company in June and then went on a buying binge for broker-dealers.

In July, it agreed to acquire First Allied Holdings, shocking the independent broker-dealer industry. And then in October and November, respectively, it agreed to acquire Investors Capital Holdings and Summit Financial Service Group Inc.

The company started the year as it left off 2013, and last month it announced agreements to buy Cetera Financial Holdings Inc., with almost 6,000 reps, by far its largest acquisition, and J.P. Turner & Co.

In October, RCS Capital also agreed to buy a manager of liquid alternative investments, the Hatteras Funds Group.

“We have not taken our eye off the ball with pending acquisitions,” said Edward M. Weil Jr., president.

The company has received approval from regulators on its acquisition of First Allied, which was valued at $207 million and has 1,500 reps under its roof.

There has been no rep or adviser attrition at First Allied, Mr. Weil said.


What do you think?

View comments

Recommended for you

Featured video


Why the bionic adviser is the way of the future

The bionic adviser is the way of the future. We spoke with Simon Roy of Jemstep to get his insights on how technology will continue to impact the industry.

Video Spotlight

Will It Last As Long As Your Clients Do?

Sponsored by Prudential

Video Spotlight

The Catalyst

Sponsored by Pershing

Latest news & opinion

Brian Block's $4 million bonus was tied to a key metric at ARCP

Prosecution rests case in fraud trial against CFO of American Realty Capital Properties.

Edward Jones is winning the Google search war

Brokerage firm's digital marketing investment helps land it at the top of local and overall search engine results, report finds.

Voya's win in 401(k) fee suit involving Financial Engines bodes well for other record keepers

Fidelity, Aon Hewitt and Xerox HR Solutions are currently defending against similar fiduciary-breach claims.

Collective investment trusts getting more attention from 401(k) advisers

The funds are catching on due largely to lower costs and more product availability, but come with some inherent drawbacks.

Vanguard rides robo-advice wave to $65B in assets

Personal Advisor Services, four times the size of its closest competitor, combines digital and human touch.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print