Capital Guardian, a Miami-based independent broker/dealer and registered investment advisor, has dissolved its b/d and joined Fort Lauderdale-based Kovack Securities as a super office of supervisory jurisdiction (OSJ). The firm’s 35 advisors have moved their brokerage business over to Kovack in a tape-to-tape transfer. Capital Guardian will maintain its own RIA, Capital Guardian Wealth Management, under which it will service advisors’ fee-based accounts.
While many small IBDs are exiting the business to shed regulatory and administrative burdens, Capital Guardian made the move to focus on its RIA business.
“It was clear that if we could find the right partner in an independent firm that would allow us to focus our advisors and our business model on the RIA wealth side, that would be the best way we could service the advisor,” said Greg Hogan, executive managing director of Capital Guardian Holding.
Kovack, a mid-sized independent b/d, has been growing lately by adding smaller b/ds as independent branches, the last being an acquisition. In May, the firm announced it would acquire the assets of TKG Financial, a small firm in Santa Barbara, Calif., which also became an OSJ.
“We’re seeing a significant appetite among successful firms that are interested in becoming independent branches, or OSJs, offices of supervisory jurisdictions, of Kovack,” said Brian Kovack, president and co-founder of Kovack Securities. “What we’re seeing are smaller independent broker/dealers who want to leverage technology, who want to leverage clearing with either Pershing or NFS and who, yes, do want to leverage an existing compliance department and let go of that responsibility.”
Kovack now has $10 billion in advisory and brokerage client assets and about 400 advisors.