Blucora Inc. Wednesday reported a 7% year-over-year decline in the number of financial advisers registered with its broker-dealer and registered investment adviser business, Avantax, but said adviser productivity, in term of revenue per adviser during the quarter, increased 49% on the back of the last year's rising stock market and a company push to its corporate RIA.
Blucora, a tax planning software company, entered the wealth management business half a dozen years ago, starting with its October 2015 acquisition of HD Vest Financial Services Inc. for $580 million from private equity owners. Then in 2019, it said it was paying $180 million in stock for 1st Global Inc., an independent broker-dealer that focused on taxes and CPAs.
As of June 30, Blucora's wealth management group had a network of 3,606 financial advisers, compared to 3,862 at the same time in 2020.
Many who left during the second quarter were low-producing advisers, generating less than $50,000 annually in fees and commissions, Blucora's CEO, Chris Walters said Wednesday on a call with analysts about the firm's second-quarter earnings.
But commission and advisory fee revenues per adviser for the quarter rose to $41,100, compared to $27,500 for the same period last year, just as the market was starting its surge after the 2020 winter collapse due to the Covid-19 pandemic.
According to the company, revenue per Avantax adviser for 2020 totaled $111,000, at the low end of the independent brokerage and RIA business for large enterprises. Its business model has long been different from large competitors, however, with its focus on tax advice first and wealth management second.
With $87.8 billion in client assets, Avantax has two sides to its business: its broker-dealer, Avantax Investment Services Inc., and its RIA, Avantax Planning Partners.
Earlier this week, Avantax said it had agreed to acquire Parsippany, New Jersey-based Headquarters Advisory Group, a registered investment adviser managing approximately $1.1 billion in assets.
That firm had previously had a long working relationship with 1st Global, one of the firms Blucora bought to expand its wealth management business.
Also, Orion has added BlackRock, Fidelity, and Vanguard to its custom portfolios suite, and RedBlack has set up a new headquarters after crossing a trillion-dollar milestone.
Also, New York-based Legacy Edge Advisors names its first-ever CEO, while Novare Capital Management hires a Vanguard veteran with a multigenerational planning focus.
Asset managers are racing to bring private market products to retirement plans, but cost and liquidity concerns linger.
Treasury's latest tax-exemption crackdown on private schools lands in the wake of a separate push to restrict refundable credits for some immigrant filers.
Workforce trust measures predicted which companies came out ahead during COVID-19. The same dynamic may now be playing out across the AI transition — and the data suggests the spread could be just as wide.
Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
