Taking a page from competitors like
LPL Financial and Cetera Financial Group,
Ameriprise Financial Inc. said on Monday it had agreed to buy Investment Professionals Inc., an independent broker-dealer based in San Antonio, Texas, that focuses on the market for independent reps to operate in banks and credit unions.
It is the first foray into the bank channel for Ameriprise. LPL and Cetera have long had a presence in the bank and credit union market, commonly referred to as the financial institution space in the industry. Founded in 1992, Investment Professionals has close to 200 registered representatives and had assets totaling more than $8 billion at the end of last year.
At the start of the year, many brokerage executives predicted that
the brokerage industry would see a steady pace of consolidation in 2017 as it did in 2016. Independent broker-dealers have seen margins compress steadily since the credit crisis as record low interest rates ate into their bottom lines. New regulations such as the Department of Labor's pending fiduciary standard for retirement accounts have hampered the sale of high-commission products such as nontraded real estate investment trusts and variable annuities, increasing the pressure on firm finances.
But today's announcement by Ameriprise appears to be the first deal struck by a large, national firm in 2017. National Holdings Corp., which controls two independent broker-dealers with about 1,100 reps, said last month it was it was acquiring assets of Williams Financial Group, including its broker-dealer, WFG Investments, with about 230 financial professionals. Otherwise, deal-making for independent broker-dealers has been mostly silent.
Investment Professional "advisers and employees joining Ameriprise will continue to serve clients within established banking relationships and operate as a new Ameriprise adviser channel focused on serving financial institutions," the company said in a statement.
Terms of the deal were not released. Scott Barnes, the founder of Investment Professionals, will serve in an advisory role with Ameriprise and help integrate the business, while Jay McAnelly, president and CEO of Investment Professionals, will join Ameriprise and report to Pat O'Connell, executive vice president, Ameriprise Advisor Group.
The
Massachusetts Securities Division in March ordered Investment Professionals to pay a $100,000 fine for having sold unsuitable investment products to senior citizens, and the company agreed to offer restitution to clients. Last year, the Massachusetts Securities Division charged Investment Professionals with using high pressure sales contests and selling unsuitable investment products to senior citizens who were bank depositors.
