Advisor Group, one of the largest networks of independent broker/dealers, is merging its multibrand network into a single entity.
The firm will bring together the eight wealth management firms in the Advisor Group network—representing a collective $565 billion in client assets and 11,000 affiliated advisors—under a new name and a single back office. The goal is to reduce complexity and, executives hope, enable advisors to better take advantage of the firm’s size and scale. The change includes a new technology platform for all its affiliated advisors.
American Portfolios, FSC Securities, Infinex Investments, Royal Alliance Associates, SagePoint Financial, Securities America, Triad Advisors and Woodbury Financial Services will be rolled into the new brand one at a time over the next 18 to 24 months. Sullivan NYC, a New York–based branding agency, has been hired to help with the repositioning.
Advisor Group will announce the new name for the unified firm later this year.
Executives at the firm said they have been working to minimize any repapering requirements and allow advisors to maintain existing business relationships with third-party TAMPs and other vendors.
"Because the firms are already part of Advisor Group, we can significantly simplify the financial professional and client transitions,” said President and CEO Jamie Price. "Moving into one firm is about making it easier for our financial professionals to conduct business and giving them more value through their connection to each other and to our home office.”
For accounts held with the firms, clients will not need to sign any new paperwork and their account numbers will not change. Some held-away accounts will need to follow third-party procedures, but Advisor Group is working to streamline the process with existing partners.
The merging of the firms follows an organizational realignment, completed earlier this year, into three channels focused on specific business models: independent brokerage services, institutions and RIAs. The RIA channel, which comprises about 25% of Advisor Group’s total assets, is something the firm has been working toward for years.
“The point is to have a single legal entity to take the friction points out, while driving our field organization in a much more segmented way,” said Price.
Advisors will become part of the newly branded entity and segmented by channel, with a channel manager, relationship management infrastructure and access to shared services around technology, compliance, legal, financial and more. According to Price, earlier initiatives aimed at aligning similar practices and advisors under the Advisor Group umbrella were well received and beneficial, and he's optimistic these moves will be too.
All advisors will be brought onto a shared technology platform the firm is building from scratch, which includes a cloud-enabled data center and an account opening and maintenance platform called eQuipt, each rolled out in late 2019. New telephone systems are being designed to improve intra-firm communications and a new Salesforce platform will be implemented for day-to-day service requests. API integrations will allow for some customization and let advisors add tools and platforms as they are rolled out, Price said.
“We have an entire new tech stack with a number of pieces we’ll be introducing this year and will be largely off all of the legacy platforms we inherited [from AIG] back in 2016,” he said, referring to Advisor Group's earlier parent company.
Price said the feedback from advisors on the plan has been positive.
“Our national advisory board has actually been pushing us to go faster because they recognize the friction points of multiple legal entities,” he said, pointing to issues like succession planning and M&A as prime examples where an integrated company can work better.
The move will also allow Advisor Group to create unified policies and procedures for each channel; for instance, it will eliminate some of the compliance hurdles and rules built into the platform for broker/dealers that aren't needed by fee-only advisors.
“We've had great feedback from advisors,” said Jen Roche, EVP of marketing and communications. “Across the board, we've done a ton of research with them and interviews on our brand, what it means to them today and how they think about its evolution. And that's been driving a lot of our thinking about going to this new brand, who we aspire to be and who we want to be for our clients.”
There will be obvious benefits to unifying the platform, technology and brand, said Tim Welsh, president of wealth management consulting firm Nexus Strategy.
“Really, the biggest question is what took them so long?" he said. "Many of the legacy b/ds they have acquired through the years don’t really have much brand awareness among consumers, so this move makes sense.
“I imagine there will be some bumps along the way as they switch out the technologies. And maybe there is fear that some of the advisors will leave, but the cost rationalization will more than make up for it," Welsh said.
Pushing back against published reports that private equity backer Reverence Capital Partners is preparing the firm for a liquidity event, Price insisted the announcement has nothing to do with an impending IPO.
“That is absolutely, positively not the case,” he said. A possible IPO "is quite a ways off."
“We drive productivity per advisor at the highest clip in the industry,” said Price. “And our mission, as we laid out our strategic plan, was to help entrepreneurial advisors grow amazing businesses and create true enterprise value. That was really the underpinnings for going to a single, newly branded entity.”