Ameriprise to buy H&R's advisory unit

Ameriprise Financial Inc. of Minneapolis said Thursday afternoon it is buying H&R Block Financial Advisors Inc. for $315 million in cash, scooping up more than 900 reps and advisers. It appears that parent company H&R Block Inc. is taking a bath on the deal. In 1999, H&R Block Inc. acquired Olde Financial Corp. of Detroit for $850 million and renamed it H&R Block Financial Advisors. The H&R Block advisers will become part of Ameriprise’s employee platform. Ameriprise has a variety of platforms for reps and advisers, and will have 13,000 advisers in all when the acquisition closes within the next six months. The advisers’ clients have $30 billion in assets. H&R Block Inc. of Kansas City, Mo., recently has been realigning its business strategy to put more focus on tax preparation. Richard Breeden, an activist investor, took over as chairman last November and said he wants H&R Block to get out of businesses not related to tax preparation, such as banking, lending and brokerage. In May, H&R Block sold Option One Mortgage Corp. of Irvine, Calif., its subprime-mortgage lender. Ameriprise chairman and CEO James Cracchiolo said in November 2006 that he was interested in making acquisitions of broker-dealers and has carried through on that pursuit. Last week, Ameriprise’s independent-broker-dealer subsidiary, Securities America Inc. of Omaha, Neb., said it would acquire Brecek & Young Financial Advisors Inc. of Folsom, Calif.