Advisor Group will acquire Signator Investors, a dually registered broker-dealer and investment adviser with more than 1,800 advisers overseeing approximately $50 billion in assets.
Advisor Group said it plans on rolling Signator, which is owned by John Hancock Financial Services, into Royal Alliance, one of four firms in its network of 5,000 advisers overseeing about $190 billion in client assets. Advisor Group is owned by private equity firm Lightyear Capital, which has also been identified as one of the firms interested in acquiring Cetera Financial Group.
Daniel Seivert, chief executive of investment bank Echelon Partners, said John Hancock was looking to "offload the orphan broker-dealer."
"Signator is kind of a tweener in that they are not small enough to get by on a boutique business model and not big enough to enjoy true economies of scale that can come with this business," he said. "Given that we're long in the tooth on this economic expansion, Hancock is looking at the business cycle risk ....[and] they concluded they better sell because of the prospect of stormy seas ahead."
Royal Alliance and Signator both operate using a Super Office of Supervisory Jurisdiction business model, which creates an ideal situation for Signator's managing partners to affiliate with a firm of "like-minded peers and business owners," Advisor Group said in a statement.
"With Signator and Royal, we immediately saw the compatibility between the two firms, which have a shared focus on the Super OSJ business model and independent advisor community," Jamie Price, president and CEO of Advisor Group, said in a statement. "This is an exciting new chapter for us all,"
Signator's advisors will gain access to Royal Alliance's technology, holistic wealth management solutions, comprehensive marketing services, and broad-based business-building support, according to Advisor Group's statement.
John Hancock Financial Services responded to a request for comment with the following statement:
"We are pleased to enter into this agreement to sell Signator to Advisor Group. The capital from this transaction will help us execute on our growth priorities and will provide Signator's firms and advisors with significant growth opportunities of their own."
An email to Signator advisers, obtained by InvestmentNews, stated that Advisor Group has relationships with both Pershing and National Financial that are expected to continue. It also emphasized Royal Alliance's "state-of-the-art" technology resources, as well as the access to a wide range of investment products.
The acquisition, which is expected to be completed during the fourth quarter of this year, comes on the heels of a record-breaking recruiting year for Royal Alliance, which saw the addition of 171 new advisers, representing a combined $4 billion in assets.