SagePoint Buys Small Nebraska Brokerage Firm To Deepen Its Community Bank Focus

Sunday, July 10, 2011 23:27
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SagePoint Buys Small Nebraska Brokerage Firm To Deepen Its Community Bank Focus

Tags: M&A

Not all mergers in the industry are transformative deals, much less sales of desperation. The big firms are still buying smaller players who can serve niches they need to grow on an incremental basis.

 

For example, SagePoint -- one of the members of the AIG Advisor Group -- just bought Omaha broker-dealer Spectrum Capital Inc.

 

Spectrum has maybe 25 reps under its banner producing a total of $3.5 million in revenue last year. 

 

That's about $140,000 per advisor, which isn't the lowest in the industry, but it's not exactly at the top end either.

 

And as far as the company's SEC filings indicate, that revenue was almost 99% commission-based.

 

But while SagePoint dwarfs its acquisition, Spectrum shares its clearing platform, so transitioning its accounts will be relatively easy.

 

In fact, Spectrum will keep operating under its own name as a supervisory jurisdiction of SagePoint.

 

Interestingly, SagePoint CEO Jeff Auld points to Spectrum's penetration of local community banks as a selling point. 

 

Might we see more of the big players move toward this previously under-the-radar market in order to bolt on bits of AUM here and there?

 

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