Signature RIA set to open broker-dealer

A year after the $18 billion registered investment advisor Signature Estate & Investment Advisors said it was selling a portion of the firm to Reverence Capital and Advisor Group, now Osaic, the RIA announced Tuesday that its new broker-dealer will be up and running on Sept. 1.

The firm, Signature Estate Securities Inc., was acquired last year and revamped, and has gotten the seal of approval from the Financial Industry Regulatory Authority Inc., said Christopher Maryanopolis, chief operating officer at Signature Estate & Investment Advisors, or SEIA, which is based in Los Angeles.

SEIA was a large office under its former broker-dealer, Royal Alliance Associates Inc., which is now Osaic Wealth Inc. Broker-dealers like Osaic are now investing substantially in large RIA branches or enterprises that already work with them, because this type of transaction tethers the RIA to the broker-dealer before it can be bought by one of the giant RIA roll-ups or aggregators currently scouring the market for deals.

The thinking at SEIA about the need to open its own broker-dealer was in place before the investments by Osaic and Reverence, Maryanopolis said in an interview Tuesday morning. "We started this process prior to the Reverence deal because we wanted a simple solution to help clients on the guaranteed income side of their portfolios as well as estate planning. Now, we're also thinking that this is a good tool to recruit hybrid advisors."

The new broker-dealer expects to transition up to 30 financial advisors who are currently registered with Osaic, he added. SEIA will continue to work with Osaic through its turnkey asset management program, or TAMP, offering.

For years, small broker-dealers have been closing, unable to compete with rising costs in technology and compliance. The brokerage industry has been losing market share to RIAs.

"In an environment where so many smaller firms are rolling up to larger competitors, it's refreshing to see a new broker-dealer," said Jodie Papike, president of Cross-Search, a recruiting firm. "Many advisors are still looking for a small to midsize broker-dealer where they know the staff and executive and enjoy the culture."