Wentworth buys Purshe Kaplan Sterling

Holding company seeks to acquire more IBD shops as M&A deals continue to heat up in 2017.
DEC 05, 2017

Independent broker-dealer mergers and acquisitions continue to heat up as a buyer of wealth management businesses, Wentworth Management Services, said on Tuesday afternoon it acquired Purshe Kaplan Sterling Investments, a boutique firm that specializes in the securities business for brokers who become financial advisers. The deal, which was announced in Miami at the MarketCounsel Summit, closed last week. Terms were not released. For the year ended in March, Purshe Kaplan Sterling reported $61.6 million in total revenues, but just $183 in net income, according to a filing with the Securities and Exchange Commission. FINRA FINE The Financial Industry Regulatory Authority Inc. in February ordered Purshe Kaplan Sterling to pay nearly $3.4 million in restitution to a Native American tribe, after the tribe paid excessive sales charges on purchases of non-traded real estate investment trusts and business development companies. Finra also fined the firm $750,000 for its failures to supervise the sales of these securities. Purshe Kaplan Sterling has a unique standing in the brokerage industry as the majority of its 1,200 advisers are so-called breakaway brokers from Wall Street banks like Morgan Stanley and Merrill Lynch. Those brokers move most of their business to a registered investment adviser and become licensed with a state or the SEC. Purshe Kaplan Sterling is the broker-dealer for the adviser's remaining transactional or commission business. Purshe Kaplan Sterling has 485 offices in 50 states. The firm's management team will remain in place, according to a statement from the companies. SEEKING DEALS And Wentworth is looking to acquire more brokerage firms, according to its CEO, Ryan Morfin. In the statement announcing the transaction, he said that partnering with Purshe Kaplan Sterling "will enable us to smoothly acquire and integrate additional independent broker-dealers to the Wentworth family." After a slow start to the year, independent broker-dealer mergers and acquisitions have picked up pace. Most notably, LPL Financial said in August that it bought the assets of the four firms in the National Planning Holdings Network. A recent report from Fidelity Investments noted that, as operating margins of IBDs have plummeted over the last decade, two types of business models have emerged as the industry steadily consolidates: large firms with scale, and smaller more focused firms serving a niche.

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.