not to solicit Schwab’s employees, and to
provide notice of their resignation.”
Morgan Stanley declined to com-
ment on the matter.
Overall, the position of New York-
based Morgan Stanley, as a member of
the protocol, is that “if the hiring firm
follows the rules, even if the other party
doesn’t, it can say it’s done nothing il-
legal,” according to Sarch.
Schwab’s view, on the other hand, is
that it isn’t part of the protocol and “has
clean hands, because it doesn’t recruit
experienced advisors expecting them
to take their clients with them,” Sarch
explains. “So it may have a stronger
case in front of a judge.”
As Sarch points out, it will be inter-
esting to see how this case and similar
ones play out in the legal system. “It’s
tricky,” he said. “I can see both sides.”
RCS to Add Girard; Renames IBD Group
RCS CAPITAL HAS SAID IT IS BUYING INDE-
pendent broker-dealer Girard Securities. The news came right after RCAP
said its rapidly growing IBD network
will be called Cetera Financial Group
and that it is expanding platforms and
services for advisors.
“We view Girard, along with our recently announced agreement to acquire
VSR Group, as another example of an
exciting accretive ‘tuck-in’ acquisition
for our retail investment advice platform,” said Cetera Financial Group CEO
Larry Roth, in a press release.
Based in San Diego, Girard includes
250 affiliated advisors and over $10 billion of client assets under administration. The reps have average yearly fees
and commissions of $210,000.
Upon completion of the Girard deal,
RCAP’s retail-advice network should include 9,700-plus independent advisors.
RCS Capital—which is led by Executive
Chairman Nicholas Schorsch—also shared
recently that it plans to buy VSR Group
of Overland Park, Kan., for an undisclosed
amount. VSR has some $12.3 billion in
client assets and 264 affiliated advisors.
“This transaction represents another
successful step in solidifying RCAP
as a leading independent retail advice
platform,” RCAP President Michael
Weil explained in a statement.
“This transaction, coupled with
our recently announced agreement to
acquire VSR Group, further demon-
strates our commitment to capitalize
on external growth opportunities in
order to further strengthen RCAP’s
leading platform,” Weil added.
Richard Woltman, who serves as
chairman emeritus of Girard’s board,
founded First Affiliated Securities some
40 years ago with two partners. First
Affiliated went on to become First
Allied, and it joined RCAP last year.
“We believe RCAP’s commitment to
maintaining the separate identity and
culture of Girard was one of the most
attractive aspects of this combination,”
said Gerard CEO and Chairwoman Susie Woltman Tietjen, in a press release.
“This transaction will allow Girard to
leverage the resources of what we believe to be one of the industry’s fastest
growing and most innovative firms.”
Cetera Financial Group expects the
transaction should close in late 2014 or
early 2015, subject to certain regulatory
approvals and associated conditions.
According to Roth, Cetera Financial
Group is not looking to change the cus-
todial arrangements of its advisors. “Per-
shing has been an important partner
and should be part of our strategy going
forward,” he said in an interview. “We
have no plans to disrupt the partnership.”
Cetera’s operations include Cetera Advi-
sors, Cetera Advisor Networks, Cetera
Financial Specialists, Cetera Investment
Services (marketed as Cetera Financial In-
stitutions), First Allied Securities, Investors
Capital, J.P. Turner and Co., the Legend
Group, Summit Brokerage Services, VSR
Financial and now Girard Securities.
All advisors affiliated with these brands
are set to have access to Connect2Clients,
a marketing portal and advice service
for FAs developed by Cetera; Pentam-
eter, First Allied’s practice management
and business consulting platform; and
best practices in service and support
from Summit Brokerage Services and
Investors Capital, for instance.
“We look at the best of what the
independent broker-dealers have to
offer and are taking these tools across
our firms by year-end,” Roth explained.
While acquisitions of more IBDs are
likely to happen “opportunistically,” re-
taining advisors and improving fees and
commissions (“same-store sales”) are
the top priorities, the executive notes.
“We will work to be the best in the
independent space when it comes to
services for our advisors,” he said. We
have eight consultants working with
them [via one program] and will add
people or identify others in the orga-
nization, so we can go to all advisors
and help them grow their business.”
As for its wholesale distribution
business, which includes the sale of
non-traded real estate investment
trusts and related products, RCAP
says revenue for the second quarter
was $325 million, up nearly 83% from
the first quarter.