Securities America to Buy Foothill Securities' Advisor Business

"We have a very sophisticated and detailed process to efficiently work through all the details and requirements associated with this type of transaction," said Gregg Johnson, head of branch office development and acquisitions, for the IBD, in a statement. "Our project list includes more than 750 tasks across 12 departments, led by a cross-departmental team of more than 25 employees."

In 2014, for instance, Securities America bought some assets from Sunset Financial Services, which was then owned by Kansas City Life Insurance Company. Sunset has roughly 270 registered reps, $2.4 billion in assets and some $18 million in yearly revenue.

Earlier this month, Securities America agreed to pay over $1.5 million in restitution tied to mutual fund overcharges paid by 1,514 clients over six years, according to the Financial Industry Regulatory Authority.

Parent Performance

Ladenburg Thalmann, which does not break out the revenue and profits of Securities America, said it had a loss of $25 million and total revenues of $270 million in Q2'16; sales were down 9% from Q2'15. Commissions declined 11% year over year to $127 million, while advisory fees weakened 6% to $112 million. Service-fee revenues also declined by 3% to $20.8 million. However, the firm insists its Independent Brokerage and Advisory Services business (IBD) "continued to perform well during the second quarter, growing advisory assets under management despite challenges that impacted revenues across the sector. We were also pleased to improve margins in our IBD business through continued focus on expense reduction and harvesting synergies," said Dr. Phillip Frost, chairman, in a statement.

"The firm is preparing for the implementation of the upcoming Department of Labor fiduciary rule and will continue our track record of providing industry-leading support to our network of 4,000 independent financial advisors," Frost added.

Across the company, client assets stand at $128 billion at June 30 on par with year-ago assets; cash balances are roughly $4.4 billion. The financial group also says that in Q2'15, recurring revenue represented 75% of the independent brokerage and advisory services business.

Ladenburg's operations include Securities America, Triad Advisors, Securities Service Network, Investacorp and KMS Financial Services, as well as Premier Trust, Ladenburg Thalmann Asset Management, insurance broker Highland Capital Brokerage and the investment bank Ladenburg Thalmann.