Good Afternoon All,I'm sure everyone read the news about the potential sale of ING Broker-Dealers' to Lightyear Capital. I believe at one point AIG's B/D network was also being considered by a private equity firm. My question to the forum, does this appear to be a growing trend of B/Ds being purchased by a private equity firm and is this a good thing, bad or neutral for the Advisors and their clients? What should Advisors be on the watch for -- please share your wisdom. Thanks and have a wonderful weekend!
They’re giving retention bonuses. ING certainly hasn’t been pumping money in lately, so possibly that could change. Nothing is changing but advisory accounts do need to get a new agreement.
I was at LPL when two VC firms purchased majority stakes. It was not a terrible thing for the company overall. Basically, a VC group will be focused on creating a liquidy event within 5 years. So they are focused on growing the company and beginning to manage it like a public entity. If you want a small boutique firm with a family feel, this probably is not going to be your cup of tea. In general, I think being owned by a VC firm is an upgrade over an insurance company. To an insurance company, the b/d represents distribution - pure and simple. Plus, it is the lowest margin and highest risk business it owns, so management has no incentives to push resources to the broker/dealer. If the VC firm that buys the b/d is any good, they will grow the business reasonably and upgrade the service and tech so they can attract and retain more producers.