Ameriprise Financial is 900 advisors stronger after it purchased H&R Block Financial Advisors (HRBFA) for $315 million in cash yesterday.
The deal, which will close within four to six month, adds 376,000 client accounts and $30 billion in client assets to Ameriprise, and brings its advisor count to about 13,000. HRBFA's advisor force, which is spread across 135 offices in the U.S., will now be employed as Ameriprise reps. (Prior to the acquisition there were about 2,800 employee reps and about 10,000 independent advisors at Ameriprise.)
"The acquisition of H&R Block Financial Advisors reinforces our growth strategy and underscores the strength of our financial position," says Jim Cracchiolo, Ameriprise Financial, chairman and CEO.
H&R Block apparently decided it didn't have the scale to survive on its own. “The securities brokerage business increasingly demands size and scale, and HRBFA simply did not have the size to be able to compete at the highest levels in the future," says H&R Block chairman Richard C Breeden. "This transaction will give the HRBFA financial advisors a dynamic parent company with a growing platform so that they can compete effectively and efficiently.”
Last year, Brian Heath, president of Ameriprise’s U.S. Advisor Group told Registered Rep. that the firm had reduced the number of novice advisors it employed in order to focus on the productivity of the more experienced advisors already on board.
“It's a mistake to underestimate Ameriprise the way the industry does,” says Dennis Gallant, principal of consulting firm Gallant Distribution Consulting in Sherborn, Mass. “They have strong resources, they have changed their stance on proprietary products, and their reps have increased production numbers. If you're a b/d, then Ameriprise is a firm to keep on your radar,” he adds.
Check out Registered Rep.’sfeature from last October for more about the changes at Ameriprise.