Wunderlich acquires wealth management assets of Dominick & Dominick

The transaction follows several similar deals in recent months, and the trend is likely to continue.
SEP 09, 2014
Midsize and small broker-dealer mergers and acquisitions continue at a steady pace as Wunderlich Securities of Memphis Wednesday said it was acquiring the wealth management assets of Dominick & Dominick, a privately held firm in New York. “There are currently 210 financial advisers at Wunderlich,” said spokeswoman Kathy Ridley. “The break down is 165 in-house and 45 independent affiliates. With the expected addition of 44 Dominick & Dominick advisers and other growth, the total headcount should be above 250 when the acquisition closes in January 2015.” Terms of the acquisition were not disclosed. The Wunderlich transaction comes on the heels of several such deals in the past few months and the trend is likely to continue, noted one industry recruiter. “Barring some sort of major market correction, I believe the M&A trend for small to mid-sized IBDs will continue for some time,” said Bradley Fay, president of IBDSearch. “Recruiting is not getting easier and firms are offering very aggressive economic terms for producers here in 2014 and still falling behind their business development goals.”

SHRINKING INDUSTRY

A shrinking brokerage industry is pushing firms to seek out mergers in order to grow, Mr. Fay said. “The pool of BDs keeps getting smaller,” he said, adding that “in 2008, there were about 5,000 Finra member firms and now there are 4,100. In 2008, there were over 670,000 registered reps and now there are less than 630,000.” “That's nearly 1,000 firms and 40,000 registered reps gone,” Mr. Fay said. “All firms want to grow and, with materially less producers out there, many have decided that acquiring small to mid-sized firms is the way to go.” The pace of similar deals for small and mid-sized broker-dealers has been steady the past few months. Three firms, RCS Capital Corp., LPL Financial, and Ladenburg Thalmann Financial Services, have spurred the acquisitions. Ladenburg Thalmann last month said it had agreed to buy Securities Service Network Inc., which has close to 450 independent reps and advisers. In August, Ladenburg said it was buying KMS Financial Services Inc., with 325 reps and advisers. In July, LPL Financial said it had reached an agreement to buy the assets of independent broker-dealer Financial Telesis Inc., with 470 registered representatives. In August, RCS Capital Corp. said it had agreed to buy two independent firms: Girard Securities Inc., with 250 reps and advisers, and VSR Financial Services Inc., with 264. Also over the summer, one of Ladenburg Thalmann's subsidiary broker-dealers, Securities America Inc., said it was acquiring the assets of Sunset Financial Services Inc., which has 268 reps. The sales force of Sunset Financial consists primarily of insurance agents of Kansas City Life, according to a Securities and Exchange Commission filing. Kansas City Life was the former owner of Sunset Financial.

Latest News

SEC bars ex-broker who sold clients phony private equity fund
SEC bars ex-broker who sold clients phony private equity fund

Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.

The key to attracting and retaining the next generation of advisors? Client-focused training
The key to attracting and retaining the next generation of advisors? Client-focused training

From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.

Chuck Roberts, ex-star at Stifel, barred from the securities industry
Chuck Roberts, ex-star at Stifel, barred from the securities industry

"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.

SEC to weigh ‘innovation exception’ tied to crypto, Atkins says
SEC to weigh ‘innovation exception’ tied to crypto, Atkins says

Chair also praised the passage of stablecoin legislation this week.

Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest
Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest

Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

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.