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Will a Wealth Management SPAC Succeed?

16:48 17 December in In the News by rafferty

December 16, 2020 By Diana Britton, WealthManagement.com While the structure is appealing, RIA sellers often focus more on who the partner is going to be and what they bring to the table in terms of peer groups and resources. With a SPAC, a lot of those are unknown. Last month, Kingswood Acquisition Corp., a special purpose acquisition corporation, or SPAC, sponsored by the owners of British wealth management firm Kingswood Group and a sister company to advisory firm Kingswood U.S., announced that it had raised $115 million in its initial public offering. Kingswood plans to use the proceeds from the public markets to invest in U.S.-based wealth management firms, bringing a new source of capital and a new option to registered investment advisors considering a sale. One of the benefits, observers say, is that a SPAC...

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Avantax Wealth Management Launches New Affiliation, Referral Businesses

19:30 14 December in In the News by rafferty

December 11, 2020 By Diana Britton, WealthManagement.com Avantax recently added new CPA referrals for advisors at the IBD as well as those affiliating under a new, full-time employee model. Avantax Wealth Management, Blucora’s wealth management business created from the acquisitions of HD Vest and 1st Global, recently launched two new affiliation models to help recruit and support financial professionals whose value proposition is largely tax-centric financial planning. The firm continues to run its independent broker/dealer model, which serves tax-focused advisors who want to run their businesses independently. But executives at the firm recently added multiple new referral models where tax professionals and CPA firms can refer relationships to one of Avantax’s independent financial advisors at the IBD, as well as to a new W-2 advisor affiliation model stemming from parent Blucora's acquisition of HK Financial Services, a CPA-focused registered investment advisor, earlier this year. “We’re in...

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Advisor Group still facing hurdles on debt: Fitch Ratings

17:52 08 December in In the News by rafferty

December 7, 2020 By Bruce Kelly, Investment News Advisor Group, a leading network of independent broker-dealers, is juggling both obstacles and advantages in the marketplace, and that means its debt is being closely watched, according to a report last month from the rating agency Fitch Ratings Inc. On one hand, Advisor Group has a business model that generates cash, a relatively flexible cost base, which could help cushion revenue declines in the current environment, and attractive retention rates of financial advisers, according to Fitch, which issued the report November 10 and left its ratings for Advisor Group’s bond unchanged at B-, or junk. Fitch also maintained a ratings outlook of “negative” for the bonds. On the other, the broker-dealer network faces risks of integration of broker-dealer back office functions, hitting profitability levels, and reducing...

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Why LPL’s Waddell & Reed Deal Is a Big Score for Both Sides

20:35 03 December in In the News by rafferty

December 3, 2020 By Janet Levaux, ThinkAdvisor The $300 million transaction is is “a quality acquisition” for LPL with “substantial benefits” for W&R advisors, Jon Henschen says. A day after LPL Financial said it was buying Waddell & Reed’s wealth management unit from Macquarie Group for $300 million, industry experts gave their quick evaluation of the deal’s value for both firms. W&R’s business has 921 independent advisors and $63 billion of assets. LPL has some 17,168 financial advisors. “It seems to be a real solid acquisition for LPL,” said Chip Roame, head of Tiburon Strategic Advisors. “There are very few opportunities left for LPL to pick up 921 independent financial advisors, [which] is about a year of recruits for LPL … or about a 5% addition in advisors.” Assuming LPL generates about 15 basis points on...