Last week, Jim Nagengast, the longtime president and CEO of Securities America, left Osaic (formerly Advisor Group), the broker/dealer’s parent company. Industry observers say Nagengast's departure reflects a broader trend of seasoned leaders in the IBD space leaving firms as the business landscape changes.
Osaic recently went through a rebranding and last April announced plans to unify its eight broker/dealers under one entity. Executives said they intend to reorganize the company around the advisors’ business models, including independent brokerage services, institutions and RIAs, versus legal entity. The firm has already converted Royal Alliance, SagePoint and FSC Securities to the Osaic brand.
Nagengast’s Securities America became part of Osaic via that firm's acquisition of Ladenburg Thalmann in 2019; Ladenburg Thalmann, which acquired Securities America from Ameriprise Financial in 2011, allowed its b/d subsidiaries to operate independently.
Nagengast had been with the company for 30 years, starting as vice president of finance in 1994. He has an MBA in accounting and finance from Columbia University, and an A.B. in economics magna cum laude from Harvard.
“He grew that business dramatically for a long time. He’s a true CEO, and I’m sure he’s not done yet career-wise,” said Larry Roth, managing partner of RLR Strategic Partners, and former CEO of Cetera and Advisor Group.
But when a broker/dealer is consolidating a smaller b/d into the larger organization, many of those leadership skills are no longer needed.
“The firms are combining their operations, their whole strategy, and branding,” Roth said. “They don’t need super high-quality traditional executives in those roles. They need people that are more focused on management of relationships. You don’t need a multi-million-dollar executive to focus on relationship management,” ”
Securities America will now fall under the purview of Executive Vice President Erinn Ford, who leads the broader Osaic independent channel, said an Osaic spokesman.
Nagengast did not return a request for comment on what he’s doing next.
Roth doesn’t believe Nagengast was forced out, but rather the move is a natural progression of the integration.
“What I’ve seen happen is, rather than buying a business and showing the CEO the door, so to speak, they’re buying the business, the CEO helps them with the integration, and then at that point, the CEO is probably not having a lot of fun, and she or he will just negotiate an exit,” Roth said. “It’s not so much forced, as it is coordinated or synchronized with the onboarding of the advisors.”
There are plenty of examples of IBD executives changing seats in recent years as a result of similar situations. Jeff Nash, CEO and co-founder of BridgeMark Strategies, a recruiting firm, said he’s seen these b/d leaders join OSJs, start a new OSJ or move into the RIA channel.
Summit Brokerage, a Boca Raton, Fla.-based IBD acquired by Cetera’s previous parent company in 2013, was shuttered in 2019 and rolled up into Cetera Advisor Networks as an OSJ. Marshall Leeds, president of that b/d, continues to lead the OSJ.
Investacorp, one of the former Ladenburg b/ds, was folded into Securities America in 2020. In 2021, Investacorp’s former CEO, Patrick Farrell, resurfaced at Associated Financial Consultants & Investor Services, a super OSJ at Securities America, as an advisor.
Brian Heapps, the former president of Signator, another b/d acquired by Osaic, is now running a branch office for the firm.
Nash said he expects to see more executives move on from Osaic. Other networks, such as Cetera and Atria, each pursuing their own acquisition strategies, will be watching Osaic to see how the consolidation plan plays out, he said.
“I think the industry is taking an absolute note of what is going on in Osaic,” Nash said. “I think the end result will be two different schools of thought: is it better and more profitable to consolidate under one brand, or is it better to stay under multiple brands, almost like Marriott has done with all their multiple brands of hotel chains?”
“The broad trend is, continued growth through acquisition, moving the advisors onto an existing brand or platform—technology stack, however you want to describe it—keeping the exec team around through the transition,” Roth said. “And if for some reason, they need them elsewhere in the organization—and that’s great because they’re talented people. But if they don’t need them, they generally have employment contracts that’ll last two to three years and then they leave.”