Royal Alliance acquires small independent B-D

Royal Alliance Associates Inc., one of the four broker-dealers that comprise the AIG Advisor Group, has acquired the Affiliated Advisors Group, an independent broker-dealer previously known as First Midwest Securities Inc. Affiliated Advisors is comprised of 33 reps and advisers and manages about $600 million. The group will operate as a “super OSJ” under Royal Alliance, meaning a large office of supervisory jurisdiction or branch, said Dmitry Goldin, president and chief executive of Royal Alliance. “It's the perfect time to play the acquisition game,” Mr. Goldin said. “Smaller broker-dealers can't keep doors open because of technology costs, as well as increasing legal and compliance costs.” According to its website, First Midwest Securities, which is closing, was founded in 1989 and was most recently headquarted in Bloomington, Ill. Royal Alliance did not release terms of the acquisition. In an interview in January, Kevin Beard, executive vice president of recruiting and acquisition strategy for the AIG network, was sanguine about the prospects of making deals to acquire smaller broker-dealers, with annual revenue of $5 million to $45 million. “I believe we are going to have a few strategic acquisitions in 2015 that fit into the Advisor Group and will be partners for the long term,” Mr. Beard said. By acquiring such firms as a super OSJ, advisers are able “to continue adhering to the culture they are accustomed to,” Mr. Goldin said. “We don't turn the firm's business environment on its head.” He added that he expected to complete more such acquisitions this year. The AIG Advisor Group currently has 6,100 registered reps and advisers.