Allianz dumps its IBD

Advisor Group broker-dealer picks up Questar Capital from Allianz

Oct 11, 2018 @ 4:52 pm

By Bruce Kelly

Another life insurance company is dumping its independent broker-dealer, with Allianz Life Insurance Co. of North America saying on Thursday it was leaving the retail broker-dealer and RIA businesses.

Advisers with Allianz's Questar Capital Corp., the IBD, and Questar Asset Management Inc., the RIA, will now affiliate with Woodbury Financial Services, one of the four broker-dealers in the Advisor Group network.

Terms of the transaction were not disclosed. However, it is common in such transactions that firms have preferred recruiting agreements for advisers moving en masse from one broker-dealer to another. In turn, the firm buying the advisers pays an amount based on how many advisers and client assets eventually move and join.

"This is an agreed-upon partnership to transition advisers and clients seamlessly to Woodbury," said Advisor Group spokesperson Katie Davis.

In 2017, Questar Capital Corp. had 640 advisers and close to $13.3 billion in assets under management, according to InvestmentNews data. The broker-dealer produced $105.7 million in total revenues, and the overwhelming amount, $85.8 million, was from commissions.

Questar Asset Management has $985.5 million in client assets, according to its most recent filing with the Securities and Exchange Commission.

"Questar advisers will feel at home at Woodbury and will benefit from our business-friendly technology and product platforms," said Rick Fergesen, president and CEO of Woodbury Financial, in a statement.

Owned by Don Marron's Lightyear Capital, Advisor Group recently has been on an acquisition roll. In June, Advisor Group said it would acquire Signator Investors, a dually registered broker-dealer and investment adviser with more than 1,800 advisers overseeing approximately $50 billion in assets.

At the time, Advisor Group said it planned to roll Signator, which was owned by insurer John Hancock Financial Services, into Royal Alliance Associates Inc.

The other two broker-dealers in the Advisor Group network are FSC Securities Corp. and SagePoint Financial Inc.

The network now has more than 5,000 reps and advisers who have more than $200 billion in client assets.

Allianz Life Insurance Co. of North America is only the latest insurance company to retreat from the thin margin, high risk retail brokerage business. Last year, LPL Financial acquired the assets of National Planning Holdings, a network of four broker-dealer with 3,200 registered reps and advisers.

Other insurance companies that have moved out of retail brokerage recently include American International Group Inc., which sold Advisor Group in 2016, and MetLife Inc., which sold its retail adviser force the same year.

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