WealthManagement Magazine

Indies Getting Snapped Up, Too

Financial services firms catering to the independent broker marketplace are being snapped up by larger broker/dealers looking for deeper sources of distribution.Denver-based Portfolio Management Consultants (PMC), the largest independent provider of separately managed account services in the country, recently acquired ADAM Investment Services, a registered investment adviser with $1.2 billion under

Financial services firms catering to the independent broker marketplace are being snapped up by larger broker/dealers looking for deeper sources of distribution.

Denver-based Portfolio Management Consultants (PMC), the largest independent provider of separately managed account services in the country, recently acquired ADAM Investment Services, a registered investment adviser with $1.2 billion under management in fund wrap programs. And SunAmerica, the $44 billion financial services giant, recently bought Financial Services Corp. (FSC), a broker/dealer with 1,500 independent contractor reps.

"It's the assets which are important," says Kenneth Phillips, PMC's president. "The real issue in more places today is critical mass." That critical mass translates into increased outlets for products and services. ADAM "plugs into a business strategy that PMC already has, which is managed mutual fund programs."

At SunAmerica, too, the acquisition equates to more potential sales for the company's wide array of proprietary products--life insurance, fixed and variable annuities, mutual funds, investment counseling and trust services.

SunAmerica says it will increase its sales force to 9,000, or some 20%, through the FSC acquisition. That will make SunAmerica the fourth largest seller of investment products in the United States, according to a statement from the Los Angeles-based firm.

"I don't think that it's going to change much," says Alexandra Armstrong, an FSC broker in Washington, D.C. "They [SunAmerica] pretty much let things run on their own, like they did with Royal Alliance. But I think that they will be helpful in providing additional capital to improve our technology and computer support systems."

Richard Haas, of Financial Catalyst Group in Sunnyvale, Calif., who sells through the PMC network, says the ADAM acquisition should add "some much needed expertise in the administration and marketing of mutual fund products." Haas doesn't foresee any other changes in his business from the deal.

Neither PMC nor SunAmerica disclosed the prices of their respective acquisitions.

PMC, based in Denver, provides investment consulting, asset management and investment technology services to the investment adviser community. The publicly traded company has three wholly owned subsidiaries and operates in 11 countries.

ADAM, a private company based in Atlanta, said it would move its headquarters to Denver upon completion of the merger. The deal, which is subject to PMC raising sufficient funds to pay for the acquisition, would put a total of $3 billion of managed assets under the PMC umbrella.

SunAmerica has six subsidiaries besides FSC (which is to remain separate): SunAmerica Life, SunAmerica Securities, Royal Alliance, Advantage Capital, SunAmerica Asset Management and Resources Trust Co.

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