Wentworth buys Purshe Kaplan Sterling

Holding company seeks to acquire more IBD shops as M&A deals continue to heat up in 2017

Dec 5, 2017 @ 4:00 pm

By Bruce Kelly

Independent broker-dealer mergers and acquisitions continue to heat up as a buyer of wealth management businesses, Wentworth Management Services, said on Tuesday afternoon it acquired Purshe Kaplan Sterling Investments, a boutique firm that specializes in the securities business for brokers who become financial advisers.

The deal, which was announced in Miami at the MarketCounsel Summit, closed last week. Terms were not released.

For the year ended in March, Purshe Kaplan Sterling reported $61.6 million in total revenues, but just $183 in net income, according to a filing with the Securities and Exchange Commission.

FINRA FINE

The Financial Industry Regulatory Authority Inc. in February ordered Purshe Kaplan Sterling to pay nearly $3.4 million in restitution to a Native American tribe, after the tribe paid excessive sales charges on purchases of non-traded real estate investment trusts and business development companies. Finra also fined the firm $750,000 for its failures to supervise the sales of these securities.

Purshe Kaplan Sterling has a unique standing in the brokerage industry as the majority of its 1,200 advisers are so-called breakaway brokers from Wall Street banks like Morgan Stanley and Merrill Lynch. Those brokers move most of their business to a registered investment adviser and become licensed with a state or the SEC. Purshe Kaplan Sterling is the broker-dealer for the adviser's remaining transactional or commission business.

Purshe Kaplan Sterling has 485 offices in 50 states. The firm's management team will remain in place, according to a statement from the companies.

SEEKING DEALS

And Wentworth is looking to acquire more brokerage firms, according to its CEO, Ryan Morfin. In the statement announcing the transaction, he said that partnering with Purshe Kaplan Sterling "will enable us to smoothly acquire and integrate additional independent broker-dealers to the Wentworth family."

After a slow start to the year, independent broker-dealer mergers and acquisitions have picked up pace.

Most notably, LPL Financial said in August that it bought the assets of the four firms in the National Planning Holdings Network. A recent report from Fidelity Investments noted that, as operating margins of IBDs have plummeted over the last decade, two types of business models have emerged as the industry steadily consolidates: large firms with scale, and smaller more focused firms serving a niche.

0
Comments

What do you think?

View comments

Recommended for you

RIA Data Center

Use InvestmentNews' RIA Data Center to filter and find key information on over 1,400 fee-only registered investment advisory firms.

Rank RIAs by

B-D Data Center

Use InvestmentNews' B-D Data Center to find exclusive information and intelligence about the independent broker-dealer industry.

Rank Broker-dealers by

Featured video

Events

Transamerica's Boan: Crafting better retirement income conversations

Retirement income is a challenge for investors. How can advisers have better conversations about retirement income? Transamerica's Joseph Boan offers insights and tips for advisers.

Latest news & opinion

HighTower on prowl for new CEO, Weissbluth to become chairman

Move is latest in Chicago-based RIA consolidator's effort to expand senior leadership team.

What's in a name? For TCA by ETrade, everything

Trust Company of America is gone, and there's big buzz over the name change. But turning the custodian into an industry powerhouse will take a lot longer — if it happens at all.

When it comes to regulating AI in financial services, murky waters are ahead

Laws are unclear on how the technology fits in with compliance.

As Ameriprise case shows, firms on hook when brokers go bad ​

The SEC will collect $4.5 million from the brokerage firm for failing to supervise brokers who were ripping off clients.

10 highest paid professions in America today

These are the top-paying jobs in the U.S., according to Glassdoor.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print