Independent B-D Kestra Buys H. Beck, a Smaller Rival
The abandonment of the independent broker-dealer space by insurance companies continued apace on Tuesday as Kestra Financial said it would acquire H. Beck Inc. from insurer Securian Financial Group.
The deal adds 600 H. Beck brokers to Austin-based Kestra’s sales force of 1,700. Financial terms of the deal, which is expected to close before the end of the year, were not disclosed.
Kestra, which was formerly known as NFP Advisor Services before insurer NFP Corp. last year sold a majority stake to a private equity firm, is on the hunt for more deals as regulatory costs and other pressures weigh on independent brokerage firms.
“There’s a lot of activity in the marketplace and a lot of conversations,” said Kestra Chief Executive James Poer.
Announcement of the deal follows decisions by American International Group and MetLife Inc. in 2016 to sell their large independent broker-dealer networks in 2016. Several smaller independent networks also have given up the ship as the Department of Labor’s new fiduciary rule has constricted both the product menus and profitability of independent firms.
H. Beck will continue to operate autonomously under its broker-dealer and registered investment adviser brand names from its headquarters in Bethesda, Maryland. Its president, which Kestra expects to name given the recent retirement of Loyall Wilson, will report to Poer.
Kestra has more than $16 billion in advisory assets under management and 63,471 accounts. H. Beck, which Securian owned for nine years, has $2.4 billion of customer advisory assets and more than 10,000 accounts, according to its Form ADV filings.
H. Beck will continue to clear through Bank of New York’s Pershing while Kestra uses Fidelity’s National Financial Services.