Atria Purchases California’s SCF, Reaches $95B In Assets Under Administration
February 2, 2021
By Eric Rasmussen, FinancialAdvisor
New York City-based wealth management holding company Atria announced last week it would purchase Fresno, Calif., broker-dealer SCF Securities, a firm with 150 independent financial professionals. With the latest deal, Atria’s broker-dealer subsidiaries will have $95 billion in assets under administration and 2,500 advisors.
According to SCF’s Form ADV, it had $1.2 billion in regulatory assets under management as of September, as well as $178 million in non-discretionary assets and some 6,300 individual clients, as well as 200 institutional and corporate clients. The firm opened for business as “Securities Consultants Financial Inc.” in 1992, according to its website.
Randy Meadows, the president and CEO of SCF, will continue in his role of president after the acquisition of SCF. The deal was for a 100% purchase of SCF Securities, SCF Investment Advisors and SCF Marketing.
Atria’s founding partner and CEO, Doug Ketterer is a Morgan Stanley veteran. He told Financial Advisor in 2019 that his firm’s approach to the broker-dealer space was to seize on multiple business channels, including those overlooked. CUSO and Sorrento, for example, are broker-dealers that specialize in credit unions and banks.
Jon Henschen, a recruiter in the independent broker-dealer space at Henschen & Associates in Marine on St. Croix, Minn., said SCF likely decided to go with a bigger firm because firms its size need more discretionary capital for forgivable notes to offer advisors transitioning to their platforms. SCF “is a fiduciary friendly hybrid and dual-clearing friendly,” Henschen said. “They offer admin fees [charges to advisors] that are reasonably priced. These are things financial advisors looking for a fiduciary standard look for.
“They are probably on the large side of the small broker-dealers and on the small size of the midsize broker-dealers,” Henschen said of SCF. That made it a good fit for an acquirer like Atria, he added.
Atria has developed a tech platform that it wants to plug its subsidiaries into. And as a hybrid with dual clearing, SCF likely fit the bill.
In August 2020, the Securities and Exchange Commission ordered SCF to pay more than $767,000 in disgorgement and penalties, saying the firm had recommended funds with 12b-1 fees for clients when cheaper versions of the funds were available. Also, the agency said SCF recommended or purchased sweep money market funds for which it was compensated but failed to disclose the compensation to clients.
