For those following the acquisitions of five IBDs over the last year (including Cetera and First Allied) by Nicholas Schorsch-led RCAP, recent news about ACRP, their affiliate which focuses on non-traded REITs, might seem ominous for their IBD efforts. But according to Mike Weil, one of the original founders of ACRP and head of RCAP, the reality is quite different.
ACRP just announced that Schorsch was stepping down as CEO and that Weil and another founder, William Kahane, were resigning from the Board. Recently, Mercato Capital management, an activist investor and major ARCP shareholder, had requested that the company slow down its acquisition pace and expressed concerns about the stock sale by the founders.
But Weil stated that the management changes had been carefully planned, though perhaps too soon, and that he and Kahane resigned to focus on RCAP and the IBD market, which they have targeted as ripe with opportunity. While there might be similar shareholders, the pledge to slow down acquisitions by ARCP does not affect RCAP’s strategy — though Weil said that new acquisitions would be measured and accretive.
“IBDs offer the best platform for independent advisors looking to serve high net worth and affluent clients who need unbiased advice and are concerned about retirement and wealth transfer,” Weil said. With Baby Boomers retiring and a shift from DB to DC plans, advisors are only going to play a more significant role. But, says Weil, they need a platform that includes technology and research — which can be hard for IBDs, especially smaller ones that have razor-thin margins.
Whether they are successful or not, it has to be heartening that a group of smart business people who took over the non-traded REIT market in five years sees opportunities not just in the IBD channel but for all retirement advisors. Now it becomes all about execution.
