Citing the shift to fee-based accounts in the wake of the Labor Department’s fiduciary rule, Nationwide has entered into a definitive agreement to purchase Louisville, Ky.-based Jefferson National.
The companies said that the acquisition will expand Nationwide’s ability to sell financial service products through Jefferson National’s network of RIAs and fee-based advisors while enabling the firms to “meet the needs of investors and retirement savers who want to do business in a fee-based advisor environment after implementation of the DOL fiduciary standard,” Nationwide CEO Steve Rasmussen said in a press release. “This will complement our strong brokerage distribution channel and allow customers to do business with us in the manner they prefer,” he added.
Jefferson National currently serves nearly 4,000 RIAs and fee-based advisors. According to the firms, this transaction will allow Jefferson National to “considerably expand and enhance” its ability to serve RIAs and fee-based advisors with a far greater variety of value-added products and services “built to fit the way RIAs and fee-based advisors run their practice.”
Under terms of the agreement, Nationwide Life Insurance Company will purchase all of the stock of Jefferson National, which will become a wholly owned subsidiary of Nationwide.
Commenting on the acquisition, Nationwide Financial President and Chief Operating Officer Kirt Walker said, “Combining forces with Jefferson National will accelerate Nationwide’s ability to establish a credible foothold in the fee-based market rather than trying to build this capability on our own.”
Terms of the purchase agreement between Nationwide Life Insurance Company and Jefferson National are not being disclosed. Both parties, which are privately held, expect the transaction to close early in 2017. The transaction is subject to customary closing conditions, including approvals from the appropriate state and federal regulatory bodies.
