A $5.5 billion LA-based RIA is getting purchased by First Republic Bank
Luminous Capital has gone from a 2008 Merrill Lynch breakaway to a big bank puzzle piece in 2012
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Oisín's snippets: Charles Schwab brand goes up on Omaha's TD Ameritrade stadium, home of college baseball world series • Interactive Brokers lands an RIA custody insider, Charlie Latimer, to climb the custodian ladder
The TDA brand lives on until the techies figure out how to make two systems into one, but change is in the air in Omaha, while Interactive Brokers gets a leg up in the custody business with a new hire.
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TD Ameritrade
Asset Custodian
Top Executive: Tom Nally
DeVoe & Company
Consulting Firm
Top Executive: David DeVoe
Matt Cooper
This is a very clear example of how an RIA/wealth manager with large AUM and scale can attract the interest of a larger strategic buyer. Because the Luminous partners were wise enough to leave Merrill as a team with over $1.5 billion, they had the foundation to scale and grow fast, ultimately (and quickly) attracting a strategic buyer. There are very few RIAs with greater than $5 billion. This validates the break away model for larger teams and it validates the M&A market for larger RIAs. What it may also do is confuse some smaller break away brokers and RIAs that believe they can have this same success and as quickly. A small break away broker, who forms a sub $500 million RIA will most likely will not have the same success.
For smaller RIAs, this also speaks to the competition that is evolving in the marketplace from larger wire house teams breaking away and forming RIAs. Look for more large teams forming very formidable competitors over the next few years. Scale is going to be more and more important….it already is!
Frederick Van Den Abbeel / TradePMR
These types of acquisitions by a financial institution I believe are a growing trend. I’ve been following these types of purchases for years. I believe more banks and related financial institutions are now more than ever considering acquiring RIAs.
Will be interesting to see how the culture of an RIA firm which is typically very innovative and entrepreneurial will blend into a bank culture. Sometimes they clash, sometimes they compliment.
