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Change is Coming to the World of DC-oriented BDs and RIAs

While on the surface there are few changes in our updated list of DC-oriented BDs and RIAs, it’s just the tip of the iceberg. More dramatic shifts in the market and new regulations are likely to change the landscape in the future. 

On the one hand, smaller independent BDs are selling to larger, better capitalized competitors, while others are shoring up to support budding plan advisors. And while most BDs don’t pay much attention to the DC market, changes brought about by the DOL’s pending fiduciary rule will affect IRAs, which almost everyone cares about. 

Meanwhile, aggregators are growing. Most are within a traditional BD structure; for example, the newest entrant, led by Bill Chetney, is inside LPL. 

With the new wave of plan advisors, there will be an estimated 25,000 advisors with $25+ million of DC AUM, up from 5,000 before the Great Recession. With 90% of all advisors getting paid on at least one plan, it’s going to be harder than ever for BDs to ignore this market. 

Finally, the battle between record keepers and BDs over who owns participant data will heat up. That battle will only intensify as more Baby Boomers retire, sparking the greatest transfer of wealth in history.

Here are some highlights on DC-focused BDs and RIAs:

  • Cetera – Though they have slowed down on their 12-BD acquisition spree over the last 18 months, RCAP BDs led by Cetera are planning big initiatives to support plan advisors. Those efforts will be led by Steve Dunlap, Jon Anderson, Guy Hocker and Jim Botsford.

  • LPL – They partnered with Chetney to buy Financial Telesis and launch Global Retirement Partners (GRP), which is essentially “NRP 2.0” with some interesting twists.

  • NFP – The purchase of all RPAG and 401(k) Advisor assets led by Vince Giovanazzo and Nick Della Vedova cements their strong interest in not only the plan market but also in pairing benefit advisors with plan advisors. They will also be more aggressive, acquiring practices like John Spach’s in SoCal, with another pending in the Southeast. 
  • AIG – The four BDs owned by AIG, to this point mostly absent from the DC plan market, will start making waves now that they have hired highly respected DC veteran Kelly Michel, who led Transamerica’s hugely successful MEP initiative and other ventures.

  • Calton – Led by industry icon John Simmers, this small independent BD based in Tampa is making bold moves in the DC market. Those moves are spearheaded by Amy Glynn, who helped Commonwealth build their plan support services.

  • HighTower – VC-backed HighTower has been mostly focused on luring wealth management wire house advisors with an interesting new model. Along the way, however, a few plan advisors — including Jim Pupillo, Steve Bogner and Jania Stout — have signed on. Hightower could become very active in this market; look for Dynasty to follow HighTower’s lead. 

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