Financial advisors who stayed with Advisor Group as it changed hands twice in four years will reap the rewards of their loyalty to the tune of $50 million in awards from the firm.
“We wanted to do something for them to say thank you,” says Advisor Group CEO Jamie Price.
The independent broker-dealer network’s new majority owner, private equity firm Reverence Capital Partners, closed the acquisition of its stake in Advisor Group earlier this month. It’s the largest M&A deal of the year across wealth management in terms of Advisor Group’s $272 billion in client assets and the reported price tag of more than $2 billion
For the network’s advisors, the deal yielded the thank-you awards, a yearlong net new asset program and, in some cases, company stock.
Funds affiliated with Lightyear Capital and Canadian pension manager PSP Investments also sold their remaining interest in the IBD network to Neuberger Berman’s private equity arm, according to Price. The parties haven’t disclosed the financial terms of the deal.
Price also declined to provide exact figures for the 7,000-advisor network’s three-part “advisor appreciation program.” He did the share that the total “thank-you award” amounted to around $50 million, saying the amount for each advisor varied by production, manager decisions and other criteria.
“What we wanted to do was really continue the momentum we’ve had as a company,” he says of the advisor appreciation program. “It’s a significant pool of money we put up with Reverence’s concurrence.”
Price spoke with Financial Planning after winding up his seventh stop on the company’s third annual 20-city “roadshow,” in which he and other executives visit advisors across the country. Former Executive Chairwoman Valerie Brown also remains an investor and board member under Reverence.
The asset program rewards advisors for bringing additional brokerage or advisory account holdings from new or existing clients onto the network’s platforms, including an incremental incentive if they use the eQuipt digital onboarding tool the firm launched last November.
Advisor Group will pay awards for net new asset flows from the beginning of this month to Aug. 7 of next year, according to Price. The assets must go to its platforms under clearing partners Pershing or Fidelity Clearing & Custody Solutions’ National Financial Services.
With the SEC’s Regulation Best Interest going into effect next June, the product-neutral program will help advisors and the four-firm network comply with the disclosure and supervisory requirements of the rule, Price says.
“[Reg BI is] going to come faster than people think,” he says, adding that the firm aims “to do the job that we’re supposed to do as a wealth management company, and that is have [advisors’] backs on this kind of stuff.”
