Securities America Reps: The Prettiest Girls in School?

Securities America Reps: The Prettiest Girls in School?

prom-shotDespite expectations that Ladenburg Thalmann’s purchase of Securities America would likely be a positive for reps, advisors are still heading for the hills. The latest defections included three advisor teams totaling more than $700 million in assets, which landed at Commonwealth.

Brian Fischer, president of Economic Concepts of Annandale, N.J., said he had been inundated by calls from all kinds of broker/dealers looking to recruit him. “I felt like it was prom time, and I was the prettiest girl in school.”

Fischer’s firm, which boasts $400 million in assets and $1.7 million GDC, had been with SAI for 14 years. But when news of the b/d’s pending lawsuits hit the fan, Fischer became concerned that the firm might be hit by a huge lawsuit or that it would be sold. “I didn’t like either of those scenarios.”

They started looking around for another firm that would fit their needs, and they narrowed it down to Commonwealth, LPL Financial, and Raymond James, which Fischer said felt too much like a wirehouse. Meanwhile, SAI execs said Fischer and his team were AAA clients, and that they’d do anything to retain them. But the firm wouldn’t follow up on that, he said.

Chuck Olsen, founder and managing partner of Olsen & Associates of Norfolk, Neb., was also turned off by the uncertainty at SAI related to its sale of allegedly fraudulent private placements by Medical Capital and Provident. Olsen, which generates $1.7 million in GDC and has more than $250 million in assets, had been with SAI for nine years before jumping ship to Commonwealth. He started looking for a new b/d a year ago, and when he started seeing the big number SAI would likely have to pay out in addition to other b/ds going bankrupt as a result of MedCap exposure, he decided that was the last straw. He didn’t feel a new owner would be much different.

And that’s exactly what people are saying about Ladenburg Thalmann’s pending purchase of SAI—not much will change. Perhaps that’s not such a good thing after all. “[SAI’s] compliance outlook is not practical from a real-world perspective,” Fischer said.

Springfield, Mo.-based Peterson Wealth Management, led by founder Eric Peterson, has also joined Commonwealth, bringing another $75 million in assets and $550,000 in revenues. Edgar Heissler, an SAI broker out of Gresham, Ore., also left SAI recently to start his own RIA, according to Meridian-IQ.

In these uncertain times with IBDs imploding left and right, reps are going to seek refuge at the largest, most stable broker/dealers, and that means LPL, Commonwealth, Raymond James and Cambridge will continue to benefit.

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