A person could be forgiven for not immediately connecting Ladenburg Thalmann to the independent space; the firm's sea change in strategy occurred only a few years ago, after all. Even so, their outsized impact is already being felt.
"We feel very good about our decision in 2007 to focus on the independent broker and advisor spaces," Richard (Dick) Lampen, president and CEO of Ladenburg Thalmann Financial Services, explains. "Our legacy business was as a traditional Wall Street investment bank and all that it entails. We focused on raising capital for small- and mid-cap companies, which is a volatile space. It can be great, but then of course it can shut down."
As Lampen relates, the firm had a good 2007, but for the sustained value and growth it wanted, it decided to "foray into the independent space." And foray the firm did, with high-profile acquisitions of Investacorp, Triad Advisors and, most recently, Securities America.
"We now have 90% of our revenue coming from that side of the equation," Lampen says. "It's stable and recurring."
However, Lampen stresses that the firm is "keeping our foot on the investment side of the business" as well. It's a boost to business when times are good, he notes, but the firm no longer has to "depend on the vagaries of the capital markets."
"The greatest potential for growth in financial services is on the independent side," Lampen adds. "With the demographics that will result from the 'graying of America' and baby boomer retirement, we're seeing that growth on a parallel track with assets leaving wirehouses. The strong pickup in assets, plus 401(k) rollovers into IRAs, makes us very bullish on the independent advisor and brokerage businesses."
One might wonder if the firm has exhausted itself of more acquisitions, or whether it will continue to be a growth strategy moving forward.
"We are certainly open to new acquisitions opportunities, but our objective is not scale for scale's sake in order to grow large enough to self-clear," he explains. "We get this question a lot from our advisors, and that is most definitely not our plan. We feel it's not right for us or for our advisors."
