Royal indulges its appetite for acquisitions

NEW YORK — Continuing its focus on buying small to midsize firms, Royal Alliance Associates Inc. late last month completed a deal to acquire United Securities Alliance Inc. The deal follows New York-based Royal Alliance’s December acquisition of Investment Advisors and Consultants Inc. of West Long Branch, N.J. United Securities Alliance of Greenwood Village, Colo., has gross revenue of at least $10 million, according to Royal Alliance chief executive Larry Roth, who declined to provide a specific figure. The firm has 117 affiliated registered representatives and advisers. Terms of the deal weren’t released. Mr. Roth stressed that Royal Alliance is focusing on acquiring smaller firms, some of which may be in a bind in the current market, he said. “I’d like to do two or three of these transactions each year,” Mr. Roth said. Royal Alliance is the largest broker-dealer of the five in the AIG Advisor Group Inc. network. Last year, Royal Alliance had gross revenue of $408 million, an increase of 10.1% from that of 2005, and 2,032 affiliated advisers. “It seems like [Royal Alliance is] one of the more active broker-dealers, acquisitionwise,” said Philip Palaveev, senior consultant with Moss Adams LLP in Seattle. Although Linsco/Private Ledger Corp. of Boston and San Diego is looking to acquire broker-dealers in “big pieces,” Royal Alliance is focused on its strategy of building through smaller acquisitions, he noted. Linsco, the largest independent-contractor broker-dealer, early this month acquired three broker-dealers owned by Pacific Life Insurance Co. of Newport Beach, Calif. (InvestmentNews, March 5). The deal involved nearly 2,200 registered reps and advisers. “If [firms are] run by bright people, they recognize the need to partner with a strong parent,” Mr. Roth said. Jeff Cannella and Shawna Meyer, the co-presidents of United Securities Alliance, will continue to be in charge of the firm, a de facto branch office of Royal Alliance. They will recruit to the Royal Alliance platform, using its technology and product lines, Mr. Roth said. Some industry observers said they wonder whether Royal Alliance will be successful in its latest acquisition, as United had in place many unique agreements with reps and advisers. Those individual agreements simply are not a fit with the Royal platform, those observers said. Mr. Roth acknowledged those reps but downplayed their significance. “Some guys with a product set that didn’t fit ours moved along,” he said.