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A Positive Sign for Small IBDs: Prospera on the Acquisition Trail

A Positive Sign for Small IBDs: Prospera on the Acquisition Trail

Amid constant noise about the tough environment for small b/ds and firms being swallowed up by large players, one small independent broker/dealer, Prospera Financial Services, is bucking the trend. In a rare turn of events, Dallas-based Prospera announced its acquisition of TCA Financial Group, a six-advisor IBD with about $500 million in total assets.

Sure, it’s a small purchase. But when you consider Prospera has about 140 advisors, that’s a 4 percent increase. And with all the doom and gloom that’s written about the IBD business, it perhaps provides a ray of hope for smaller mom-and-pop shops. With the acquisition, that brings Prospera's total assets to $4.5 billion.

In a November 2012 article on, Prospera was featured as one of the firms profiting and attracting FAs despite the looming challenges of increased regulatory and compliance costs and the technology arms race. Here’s an excerpt:


Dallas-based Prospera Financial Services has also tried to pitch its boutique, relationship-based culture to prospective advisors. As a small firm, with about 120 advisors and over $30 million in annual revenue, advisors are going to get more of a connection to senior management, says President David Stringer. Their sweet spot is advisors with north of $300,000 in annual production. The firm’s net operating income—after paying its brokers and bills—is at about 8 percent of total revenue. But a portion of that goes to pay bonuses and compensation of the employees, which is variable—meaning it’s discretionary to the performance of the firm. After that, the firm has about 2 percent left over to reinvest in the firm, Stringer says.


The firm continues to grow at a nice clip. In June, the firm recruited two teams from the largest IBDs in the business. With a combined AUM of $157 million, The Bishoff Financial Group joined from LPL Financial and Matthews Financial Services came on from Wells Fargo Advisors Financial Network.

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