A wealth management holding company with a different approach than most private equity-backed acquirers is buying its sixth independent broker-dealer.
Atria Wealth Solutions agreed to acquire SCF Securities, a Fresno, California-based IBD with 150 registered representatives and $4 billion in assets under administration, the firms
Lee Equity Partners, the New York-based acquiring firm’s parent, supplied Atria with institutional growth equity capital directly from the PE firm’s investors rather than issuing debt for a leveraged buyout, according to recruiter Jon Henschen.
Henschen classifies midsize SCF as part of a select group of “fiduciary-friendly” BDs that offer more choice and lower prices for reps on technology, advisory account fees, and other shared corporate services.
“You're not calling into a phone tree and having all of those frustrations that you get at larger broker-dealers,” Henschen says. “I thought it was a good move for both sides to bring the two together.”
In the five years since its launch, Atria has earned a reputation for avoiding the “roll-up” deals common in the industry, says fellow recruiter Jodie Papike of Cross-Search. Atria’s subsidiaries retain their brand, headquarters, custodians and other operations.
“With the acquisitions that they've done, they really have developed a niche for acquiring midsize broker-dealers,” Papike says. “The good thing for the advisors that are at SCF is that, really, with this type of acquisition, there shouldn't be that much change.”
The strategy differs from other acquiring firms that often require a change in BD or an integration into a larger network. Representatives for the buyer and seller said no one from either firm was available for an interview about the deal.
"SCF's focus on meeting the growing expectations of financial professionals and their clients completely aligns with our vision for reinventing the advisor experience and providing solutions that enhance the advisor and client relationship,” Atria CEO Doug Ketterer said in a statement.
The RIA has $1.39 billion in assets under management, including more than $1.26 billion from 6,301 individual and high-net-worth clients, according to SCF’s latest Form ADV. At least 20 advisory practices use the firm’s corporate RIA, its Part 2 brochure states.
“With Atria at our side, our ability to provide our advisors with additional resources, enhanced technology and an even greater level of support grows exponentially,” SCF CEO Randy Meadows said in a statement.
Meadows will continue to lead the 29-year-old firm as president after the close of the deal. In August, the firm agreed to pay $767,000
Atria’s last acquisition of Western International Securities brought some 400 advisors with $13 billion in AUA into the fold
