Fitch Ratings said Friday that it doesn't expect an immediate rating impact from Advisor Group's announcement last week that it would acquire American Portfolios Financial Services Inc., an independent broker-dealer with 850 reps and financial advisers and close to $40 billion in assets.
Indeed, Fitch sounded bullish about the deal, and in a research note wrote that it "believed the transaction will enhance the scale of Advisor Group’s advisory and cash management business, expand its geographic reach and produce synergistic benefits over time."
Fitch affirmed its issuer rating on the broker-dealer network’s debt at B-, meaning “highly speculative” — commonly referred to as junk.
In its note, Fitch “emphasized Advisor Group’s continued ability to enhance its scale and market position in the industry,” Jon Frojen, chief financial officer for Advisor Group, said in an interview Tuesday afternoon. “We’re focused on organic growth first and acquisitions as they come to add to the platform.”
Broker-dealer mergers and acquisitions are a tricky business, and recruiters pepper advisers at firms that are being acquired with offers to jump to competing firms. The purchase price of American Portfolios hasn't been disclosed, but Fitch noted the positives to Advisor Group in its latest transaction, adding that it shouldn't have an immediate effect on the firm's leverage, or debt, ratio.
"Advisor Group’s profitability is expected to improve over time, given additional scale and the favorable impact from rising interest rates on cash balances held in sweep accounts, which will benefit net interest income and should help offset equity price declines," the bond rating agency wrote. "Fitch believes the shift in a portion of American Portfolios’ assets onto Advisor Group’s wealth management platform could lead to an increase in non-compensable revenue and higher profit margins."
This is the second large broker-dealer acquisition by Advisor Group in as many months. In May, Advisor Group said it had agreed to buy a bank-focused broker-dealer, Infinex Investments Inc., with 750 financial advisers who control more than $30 billion in client assets.
Chair also praised the passage of stablecoin legislation this week.
Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.
A new PitchBook analysis unpacks sticking points relating to liquidity, costs, and litigation risk for would-be investors and plan sponsors.
"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.
The collaboration will give RIAs yet another access point into the alternatives space through a new unified managed account capability.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
