B-D SPAC deal takes shape; Larry Roth to have lead role

Larry Roth, an independent broker-dealer veteran of veterans, has returned.

Some questions that were raised over the summer with the announcement that an aggregator of small to midsize broker-dealers, Wentworth Management Services, intended to go public by merging with a special purpose acquisition company were answered late last week when the parties involved said that Roth had been tapped as executive chairman of the enterprise, which is to be dubbed Binah Capital Group Inc. when the deal closes in the next few months.

Roth has decades of experience in the independent broker-dealer industry as a business owner, senior executive, investment banker and currently, a consultant.

Most notably, Roth was CEO of AIG Advisor Group, now just Advisor Group, from 2007 to 2013, steering that network through the financial crisis. He then served as CEO of Cetera Financial Group for the next two years and shepherded that network through the bankruptcy of its parent, RCS Capital Corp.

The SPAC, Kingswood Acquisition Corp., said in July that it was planning to merge with Wentworth and operate under the new umbrella of Binah Capital. Wentworth Management Services is owned by Alexander Chiam Markowits, who also owns a string of nursing homes.

Markowits created the broker-dealer aggregator in 2016, buying Purshe Kaplan Sterling Investments at the end of 2017. It was his first deal for a brokerage firm, followed by a few others: Cabot Lodge Securities, World Equity Group Inc. and Broadstone Securities.

According to an investor presentation filed with the Securities and Exchange Commission Friday, the Wentworth Management network has 1,900 reps and advisers and $25 billion in assets under management. In 2021, it generated $187 million in revenue and $9.1 million in pro forma adjusted earnings before interest, taxes, depreciation and amortization.

Roth has been a director at the Kingswood SPAC.

"The SPAC market in general is terrible right now, but the market for RIAs and hybrid broker-dealers has been resilient," Roth said in an interview Tuesday morning. "The idea is to merge the Kingswood entity into Wentworth and become a hybrid RIA shop. Purshe Kaplan Sterling is the largest friendly broker-dealer supporting RIAs."

Current Wentworth president Craig Gould will become Binah's CEO, and David Shane, an industry veteran and former chief financial officer with Sanctuary Wealth, will become Binah’s CFO, the company said. The existing management teams of the broker-dealers will remain in place.

How would a smaller broker-dealer network compete against the giants that Roth used to run in this active market for mergers and acquisitions, Roth was asked.

"We're not competing directly with the biggest firms," he said. "We're building a business that provides optionality for hybrid advisers who have their own RIA or use a corporate RIA or have full-time RIA or broker-dealer W2 employees. The largest business is Purshe Kaplan Sterling. It's a platform for high-quality advisers to use for brokerage capabilities and insurance."