In one of the biggest recruitment moves among independent wealth managers this year, a firm overseeing 2,000 employer-sponsored pension plans has switched brokerages.
Gallagher’s Retirement, Investment & Fiduciary Consulting Practices, which has more than 90 advisors and 50 support staff with listed discretionary assets under management of $6.27 billion on behalf of 55 clients, has left Kestra Investment Services for Advisor Group’s Triad Advisors, the companies announced in April. 11. This decision represents the second largest among independent brokers in 2022 after only CUNA Brokerage Services Pending Migration to LPL Financial, according to Financial planningmonitoring of company announcements.
In terms of client assets, Gallagher’s Retirement flip brokerage ranks above all but six moves in the independent channel last year and any other incoming team unveiled by Advisor Group since its mega-acquisition of former relative of Triad Ladenburg Thalmann in 2020. The Chicago-area subsidiary of publicly traded insurance brokerage, risk management and consulting firm Arthur J. Gallagher has changed companies to operate with greater flexibility as a hybrid practice using its own RIA and Triad’s broker, an executive said in an interview.
“We’ve made a few retirement acquisitions in the past,” said Jeff Leonard, head of Gallagher Retirement’s North American financial and retirement services practice. “We expect to do more retirement acquisitions and financial planning in the future, and I think this model really helps us do that. So I expect us to make more acquisitions.
Kestra Investment Services and its parent companies, independent wealth manager Kestra Financial and Kestra Holdings, are “proud to have been a partner of Gallagher for over a decade,” spokeswoman Leah Pappas said in a statement sent by e-mail.
“As their business has grown, the natural evolution is for them to follow that path and build their own in-house RIA solution,” Pappas said. “We appreciated the opportunity to play a part in this growth and appreciate their loyalty over all these years.”
For service providers with a large base of sponsors and 401(k) plan participants, choosing a brokerage firm revolves around operational issues, including business structure, technology upgrades for employers and employees and how to create a successful and compliant turnover capacity. in the middle of potential new guidance from the Department of Laboraccording to Scott Smith, director of consulting relations at research firm Cerulli Associates.
“It’s how they handle that and how they make sure they’re still able to service those retail customers when they want to take that next step,” Smith said. “This is a key area that Labour, the SEC and FINRA are all digging into. I don’t know what any of us will look like in the landscape five years from now.”
Gallagher’s Retirement parent company traces its roots to the insurance agency started by founder Arthur Gallagher in Chicago in 1927, its website says. In 1975, the company’s benefits division created its first self-funded plan. Last year, the parent company generated total net income of $1.18 billion on revenue of $8.06 billion, according to to the adjusted totals on its most recent quarterly statement. Revenue climbed 21% year over year.
John Jurik, Gallagher’s national practice leader for pension advice, had been affiliated with Kestra for 14 years, according to FINRA BrokerCheck. The company officially moved to Triad on April 1.
“Autonomy was a key factor in our decision to consolidate most of our core businesses, including the more than 2,000 pension plans we oversee,” Jurik said in a statement, adding that the new configuration under the hybrid RIA model offers growth potential to solidify it.
In an effort to attract such potential incoming teams, Advisor Group has appointed ex-RBC Wealth Management veteran recruiter Kristen Kimmell to be its executive vice president of business development last year. The private equity-backed company faces tough recruiting battles. In 2021, competing firms captrust, Sequoia Financial Group and LPL Financial each picked up businesses with at least $1 billion in client assets from Advisor Group-owned brokers, while the independent wealth manager did not unveil new $1 billion teams.
Asked in an interview about all of the recruiting metrics available for the past year, Kimmell said the company exceeded its targets for incoming assets under management and administration with “strong performance” in 2021. Gallagher “really showcases the partnership that we seek to create and build with these finance professionals in meeting the needs of their practices,” she said.
The other top five recruitment moves by client assets at independent brokerages so far this year have taken a former UBS practice with $3 billion in client assets to NewEdge Wealtha former Wells Fargo Advisors group with $1 billion to LPL and Stratos Wealth Partners and an ex-Concourse Financial Group team with $950 million in Kestra and Bluespring Wealth Partners. In 2021, LPL alone carried out four of the 10 greatest transitions in the channel.