Major independent broker-dealers continue to fight over RIA assets, as Cambridge Investment Research Inc. signs up a huge office formerly affiliated with Osaic Inc., Ameriflex Group Inc., with $11.9 billion in customer assets and 129 advisors, according to a statement Friday morning announcing the move.
The recruitment coup by Cambridge Investment Research is yet another indication of how strategically motivated independent broker-dealers like Cambridge and its competitors are to build their registered investment advisor businesses; RIAs kick off steady cash flows from charging clients quarterly and annual fees and enjoy higher valuations than simple broker-dealer models.
Based in Fairfield, Iowa, Cambridge Investment Research had more than 4,500 registered reps and financial advisors in 2,700 branch offices at the end of last year, according to the Financial Industry Regulatory Authority Inc.
RIA assets are key for broker-dealers right now. For example, Cambridge Investment Research Advisors, the broker-dealers RIA arm, last year said it was willing to pay potential financial advisor recruits a better deal if they move client assets to the firm's in-house money management system, WealthPort.
The firm has recently been targeting the assets of registered investment advisors or so-called hybrid firms like Ameriflex Group, which work with financial advisors who are dually registered to charge fees as an RIA as well as commissions as a FINRA regulated broker.
Meanwhile, Osaic Inc. a giant network of recently consolidated broker-dealers and RIAs formerly known as Advisor Group, has also been targeting RIAs. Just this month, Boston-based RIA CW Advisors, with $13.5 billion in fee assets, said it had agreed to be acquired by Osaic, which did not release term of the acquisition.
Cambridge Investment Research’s recruitment of Ameriflex, however, is not an acquisition or purchase of the firm.
In a statement, a spokesperson for Osaic said the firm and Ameriflex had mutually agreed to end the working relationship, and that over half of Ameriflex advisors “strategically aligned” with Osaic were staying put.
“This decision reflects Osaic’s ongoing strategy to focus our investments and resources on business models that align with our mission to support growth-oriented advisors who are working to create meaningful enterprise value,” according to the spokesperson.
A senior executive with Ameriflex disagreed with the Osaic spokesperson.
“Not surprisingly, Osaic's claims are inaccurate, because the fact is that all the advisors we targeted and fit our strategic vision for the future have joined us in this move,” said Jesse Kurrasch, chief operating officer of Ameriflex, in an email.
“Many of the advisors who remained behind were beholden to Osaic in part due to how that firm requires advisors to manage on-platform assets,” Kurrasch said.
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