Advisor Group last week continued the process of absorbing broker-dealers that were part of Ladenburg Thalmann Financial Services Inc. and offered jobs to about half of the close to 70 back office employees at one of those firms, Securities Service Network, but the remaining employees have been left in the dark about their futures.
It's not clear what's going to happen to the other back office employees, but two industry sources said some portion are likely to be let go.
"Advisor Group is keeping on influential back office people at SSN, but dozens of people are being laid off," said one industry executive, who asked not to be named.
Advisor Group near the start of the year completed its acquisition of Ladenburg Thalmann and in May said it was going to shut down three of the Ladenburg firms and move those advisers onto the platform of Securities America Inc., the largest broker-dealer that was part of Ladenburg.
Over the summer, Advisor Group shut down Investacorp Inc. and moved about 450 reps and advisers to Securities America. Last week, it rolled SSN's 390 reps and advisers into Securities America and made job offers to close to half the back-office staff of the Knoxville, Tenn.-based firm. Meanwhile, the other employees will be notified in the near future whether they have jobs or not.
"As part of this organizational realignment, nearly half of SSN’s employees have already accepted offers ensuring continuity of service for SSN’s advisers, and a significant number will continue employment within Advisor Group’s shared services functions,” a company spokesperson, Joseph Kuo, wrote in an email.
KMS Financial Services Inc. is the final former Ladenburg Thalmann broker-dealer Advisor Group will consolidate into Securities America.
Layoffs after broker-dealers merge are ways for firms to reduce costs and potentially boost profits. Financial advisers at mid-sized firms like Investacorp and SSN, however, are often sensitive to changes in staff at the back office because they have close ties and relationships with those staffers.
Raymond James Financial Inc. last week said it was cutting 500 jobs, spelling layoffs for 4% of its workforce, in order to control costs during the pandemic.
Advisor Group said last fall it was buying Ladenburg Thalmann for about $1.3 billion. The combination of the two broker-dealer networks created a giant firm with more than $450 billion in assets under management, $3 billion in annual revenues and nearly 11,500 advisers.
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