Scion of former B-D owner bolts B. Riley

B. Riley Financial Inc. bought Wunderlich Securities in 2017 and made it a cornerstone of its wealth management business.

Now, with B. Riley’s stock down 90% in the past year and the company facing $2 billion in debt, Philip Wunderlich, the scion of the founder of the former Wunderlich Securities, has bolted and joined Prospera Financial Services Inc.

Philip Wunderlich leads a team of about a half-dozen financial advisors, industry sources said, and is based in Memphis. He left B. Riley Wealth Management on September 19, according to his BrokerCeck report.

The next day, Reuters reported that Stifel Financial Corp., which has experience in making deals to acquire struggling financial services firms,  iwas in talks to buy B. Riley’s retail brokerage group for $100 million. InvestmentNews has since confirmed that B. Riley is indeed exploring a sale of its financial advisor business. 

It’s not clear the client assets or annual revenue that Philip Wunderlich and his team controls.

Meanwhile, other broker-dealers are talking to teams of B. Riley financial advisors, trying to convince them to move as the firm faces various uncertainties, saources said.

B. Riley has more than 400 financial advisors who control $26 billion in client assets.

A spokesperson for B. Riley Financial did not return a call on Thursday to comment. Tim Edwards, co-CEO and managing partner of Prospera Financial, with 181 financial advisors who control $20 billion in assets, also did not return a call Thursday.

“Advisors like Philip Wunderlich are employees and not independent contractor reps, and that kind of a move out could rattle B. Riley management,” said one industry executive who spoke confidentially to InvestmentNews. “Those employee advisors are part of the core there.”

Shares of B. Riley Financial $5.21 on Thursday afternoon; last October, the investment bank’s share price hit a 52-week high of $43.41.

B. Riley’s wealth management group has two parts. Gary Wunderlich sold Wunderlich Securities in 2017 to B. Riley for close to $70 million. It then took a stake in National Holdings Corp. and eventually acquired the firm in 2021.

B. Riley is under considerable pressure following a plunge in its share price amid an SEC assessment of whether the firm correctly disclosed risks in some of its assets, and questions about its founder’s interactions with Brian Kahn, the former CEO of the Franchise Group Inc., who stepped down in January months after Riley's investment in the firm. 

Last month, chair and co-CEO Bryant Riley informed the board of directors of his intention to take the company he founded private, with a proposed purchase price of $7.00 per share. He is currently the firm’s largest shareholder with a 24% stake.