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Oct 30, 2009 9:11 pm

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!    
Nov 3, 2009 6:48 pm

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.

Nov 10, 2009 4:00 am

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.