Blucora Tag

New Study Links Private Equity Ownership to Advisor Misconduct

13:54 10 January in In the News by rafferty

January 6, 2022 By Diana Britton, WealthManagement.com Registered investment advisory firms that take on private equity owners are likely to see higher rates of advisor misconduct after the buyout, according to a study released late last month by the University of Oregon. The researchers found that private equity–backed RIAs had a 147% increase in the percentage of their advisors committing misconduct and 200% increase in the average number of misconduct incidents after the ownership change. Those results were driven mostly by regulatory conduct and customer disputes, the study said. The rate of misconduct is even greater at firms with higher post-buyout growth in assets under management per advisor, and the study notes that it’s concentrated at firms serving retail clients. The results of the study suggested that private equity firms target RIAs with cleaner...

Three Ways Regulators Throw Advisors Under the Bus

14:23 12 July in In the News by rafferty

Financial service is the only industry where you are guilty after being found innocent. Anyone can file a customer complaint against an advisor, and even after the claim is denied or closed with no action taken, a record of the complaint goes on FINRA’s BrokerCheck for the world to see. If an advisor wants to expunge the frivolous claim, you need to spend $10,000 to $20,000 to hire a securities attorney to have it removed. This is just one of numerous issues advisors face with the regulator. Chronic regulatory overreach persists, yet it is tolerated with little pushback. Here are three particularly egregious areas of concern. For perspective, I’m including input from Jodee Rager, chief compliance officer and president of Geneos Wealth Management, and securities attorney Jim Eccleston. Guilty After...

Thomas H. Lee Partners Wants an Independent Broker/Dealer

17:23 07 April in In the News by rafferty

April 7, 2021 By Asia Martin, WealthManagement.com THL managing director Ganesh Rao said THL is looking to buy the "Hightower" of the independent broker/dealer space, but industry observers say it may be too late. Thomas H. Lee Partners, the Boston-based private equity firm with a majority ownership in RIA rollup Hightower Advisors, is also looking for an independent broker/dealer to invest in, says Ganesh Rao, managing director at TH. “I’ve been looking at IBDs for the last 10 years,” said Rao, who has been at THL for 21 years. “The premier firms I’m interested in I’ve been intimately getting to know for the last five years.” Without mentioning any names, Rao said he has eyed two firms that don’t yet have outside ownership. But the opportunity to close the deals has yet to present itself....