Kestra poer
Kestra Financial CEO James Poer

Another Insurance Firm Sheds Broker/Dealer

Securian will sell H. Beck to Kestra Financial, adding about 600 advisors and $2.4 billion in client assets.

Kestra Financial, the independent broker/dealer formerly owned by NFP, has entered an agreement to acquire H. Beck, a firm owned by insurance company Securian Financial Group. The deal adds about 600 advisors and $2.4 billion in client assets to Kestra’s platform.

Securian is the latest insurance company to sell a broker/dealer unit. Securian purchased H. Beck nine years ago. The firm still owns Securian Financial Services, its other b/d, with 1,200 advisors. 

“We’ve entrusted this business to Kestra Financial with the intention to increase our focus on our other businesses, including Securian Financial Services, and the expectation that Kestra Financial will be a good steward for the 600-plus advisors affiliated with HBI,” said George Connolly, senior vice president in charge of wealth management at Securian Financial Group, in a statement. 

“The relationship between H. Beck and Securian was about as functional as Securities America and Ameriprise, with the independent arm considered a regulatory burden with little profitability,” said Jonathan Henschen, president of recruiting firm Henschen & Associates in Marine on St. Croix, Minnesota. “You can now count the number of insurance-owned broker/dealers on one hand.”

Teresa Schuelke, an advisor in Chandler, Arizona, said she noticed H. Beck’s services have been lagging over the last year. The firm cut out its annual conference, and it hasn’t staffed up the West Coast office as much as in the past. In addition, many people on the management team also have books of business, so they’re not as available as she would have liked.

“But I think being acquired by a company that focuses on independent advisors instead of an insurance company might help some of those problems,” she said.

H. Beck will not be rolled up into Kestra; it will continue to operate as a standalone b/d, with its own management team. The firm’s home office in Maryland and advisor services will remain intact, as well as its brand. The firm will continue to clear through Pershing, even though Kestra uses National Financial. Kestra plans to invest in H. Beck's technology and operations.  

The firm notified advisors of the acquisition this morning, just before the announcement went public. Many advisors contacted by WealthManagement.com didn’t know about the deal, or had learned about it from sources outside the firm.

"I didn't know anything about it,” said William Harry Gullborg, an advisor in Canonsburg, Pennsylvania.

Although Schuelke has just sold her book of business to an advisor at another firm, she wished she had received “a little bit more notice, so that if we had clients that watch that, we weren’t bombarded. My clients wouldn’t be worried about it because they know they’re transitioning over anyway. If this hadn’t happened, I would be getting a few calls from people who keep their eye on the news and would be wondering, how is this going to affect them?”

The firm did provide a pre-approved letter for advisors to send to clients, notifying them of the acquisition. 

“They gave us something that we could send immediately to our clients if we chose to do that, and that was good," Schuelke said. 

In April 2016, NFP sold a majority stake in its independent b/d to Stone Point Capital, a Greenwich, Connecticut–based private-equity firm that invests in financial-services companies. The b/d then rebranded to Kestra.

Terms of the deal, expected to close by the end of the year, were not disclosed. 

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