The Nicholas Schorsch empire grows yet again. Late yesterday afternoon, RCS Capital Corporation (RCAP), announced its intent to purchase VSR, an independent broker-dealer (IBD) with $12.3 billion in assets under management.
Once complete, RCAP’s network will include over 9,200 registered representatives managing assets for 2,000,000 plus clients.
The Kansas-based IBD is home to 264 financial advisors with an average tenure of about 11 years. VSR’s advisors earn on average $380,000, ranking them in the top amongst independent broker-dealers.
“The acquisition of VSR will be another important addition to the RCAP retail advice platform. In recent years, VSR has been ranked in the top three in average production per financial advisor, according to IBD surveys, and we expect this combination to further strengthen RCAP’s revenue streams,” commented Michael Weil, President of RCAP.
RCAP estimates that the acquisition will generate an additional $112 million in annual revenues in 2015.
Advisors with VSR stay with VSR.
Over the past three years, the firm has averaged a 98% retention rate. Considering the tenure (11 years) and production levels (average $380,000) of the IBD’s advisors, this figure is impressive and most likely caught the attention of executives from RCAP.
“This transaction underscores our commitment to expanding the scope and depth of our financial services platform by acquiring top-tier independent broker-dealer platforms. We believe the acquisition is an excellent example of RCAP’s ability to identify and execute strategic acquisitions of independent retail broker-dealers that should leverage the size and scale of the existing RCAP infrastructure in order to generate and further enhance earnings. We look forward to welcoming VSR’s experienced and dedicated team of advisors to the RCAP family,” added Weil.
Larry Roth, Chief Executive Officer of Cetera Financial Group, added, “We view the addition of VSR as a great example of an accretive ‘tuck-in’ acquisition for our retail investment advice platform.”
RCAP announced its acquisition of Cetera in January 2014 and closed on the transaction during the second quarter.
The VSR acquisition marks the sixth separate IBD transaction and the tenth overall acquired by RSC Capital Corporation, a Schorsch entity that also owns his wholesale distribution business, a research unit (SK Research), investment banking and capital markets unit amongst others.
RCAP’s independent broker-dealer network already includes the Cetera Financial Group, First Allied Securities, Legend Securities, Investors Capital Corp, JP Turner, and Summit Financial Services.
The transaction is expected to close late 2014 or early 2015, based on customary regulatory approvals and closing conditions.