Just months after completing its acquisition of the Ladenburg Thalmann network of broker-dealers, Advisor Group told financial advisers on Monday it was going to shut down three of the Ladenburg firms and move those advisers onto the platform of Securities America Inc., the largest broker-dealer that was part of Ladenburg.
The broker-dealers that are being closed are Investacorp, Securities Service Network and KMS, according to a memo sent to advisers. Consolidating broker-dealers is typically a way for large networks like Advisor Group to lower costs, as separate back offices and employees for each firm often deliver similar services to advisers.
The three broker-dealers being rolled into Securities America have about 1,200 reps and advisers. Advisor Group said last fall it was buying Ladenburg Thalmann for about $1.3 billion.
The combination of the two broker-dealer networks created a giant firm with more than $450 billion in assets under management, $3 billion in annual revenues and nearly 11,500 advisers.
“As we work toward the end state of the merger between Advisor Group and Ladenburg Thalmann, we’ve been evaluating how to add the most value to you and your business,” according to the memo. “The deep dive we’ve conducted over the past few months has made it clear that the best way to give you the industry-leading tools, platforms and technologies you deserve, in an expedited manner, is to realign our corporate structure.”
“To that end, we’ve made the difficult, but necessary, decision to consolidate Investacorp, SSN and KMS into Securities America,” according to the memo. Investacorp will be the first to close and merge into Securities America in July with the other two following in September.
No further integration of broker-dealer or RIA firms is expected at Advisor Group, the company said in a press release, and many of the home office staff will continue serving and supporting them after they move to Securities America. And no repapering of client accounts will be needed, the company said.