Executives at most independent BDs, 97%, see more consolidation ahead. And the minority, 6%, view such deals as negativefor the industry; that figure jumps to 14%, though, when they’reasked specifically about the Schwab-TD Ameritrade merger.
The main forces driving these transactions are higher regulatory and technology costs, as well as lower fees and commissions.
On May 11, Advisor Group issued an update on its plansfor the former Ladenburg Thalmann broker-dealers, whichit recently acquired. Three of these five BDs — Investacorp,Securities Service Network and KMS Financial Services — areset to merge with Securities America.
“From the outset, we have been clear that no formerLadenburg firms would be combined with the four originalAdvisor Group firms,” according to Advisor Group CEO JamiePrice. The aim is to move one BD at a time into SecuritiesAmerica through November.
Overall, the four Advisor Group BDs — FSC Securities,
Royal Alliance Associates, SagePoint Financial and Woodbury
Financial — and the remaining ex-Ladenburg BDs — Securities
America and Triad Advisors — should have over 11,000 advi-
sors and some $450 billion in assets.
Meanwhile, LPL Financial just said it would buy LuciaSecurities, which works with $1.5 billion. The giant IBDacquired Allen & Company, its roughly 30 advisors and $3 billion in client assets last year.
“M&A continues to stay on our strategic radar,” according toLPL’s Arnold. The IBD sees “opportunities” particularly withsmall BDs and with RIAs. The current climate, he adds, points to”continued consolidation within that segment of the marketplace.”About 80%, or four out of five, IBD leaders see more marketvolatility ahead tied to coronavirus. LPL, Raymond James andothers have cancelled national conferences, but they hope toresume in-person visits with recruiting prospects when moreof the economy opens up.
6 How much market volatility do you
expect in 2020?
1 Do you expect more consolidation/
M&A in 2020?
97% | Yes
3% | No
2 What’s the impact of consolidation
on the BD you lead?
4 What’s the expected impact of the
planned Schwab-TD Ameritrade merger?
3 What’s the top factor driving
Higher compliance costsHigher technology costsLower fees/commissionsAll of the aboveOther
5 Do you expect this $26 billion deal
to be approved by the government?
94% | Yes
6% | NoA great deal Some Little/None
7 What’s the greatest driver of
CoronavirusElection-related issuesTrade issues/disputesAll of the above
General economicconditionsCoronavirusThese and other issues
9 What will most impact the
elections this year?
8 As of late March, how is your
BD responding to the coronavirus?
Cancelling events, putting in newtravel/meeting policiesMonitoring the situationConsidering plans to cancel events, putnew policies in place