US Wealth Manager Buys In Wealth Advisors

Matthew Smith

20 February 2007

The acquisition of 120 advisors by US investment manager, Integrity Mutual Funds, signified the exit by insurance provider, United Heritage Financial Group, from its retail investment advisory business. Integrity acquired the United Heritage Financial Services advisors through its broker-dealer subsidiary, Capital Financial Services, which now has around 440 advisor representatives, according to Brad Wells, senior vice president for Integrity’s retail administration. Mr Wells told WealthBriefing the deal is an example of the consolidation trend among US dealer-brokers as a result of the increased regulations on advice firms. “The critical mass for broker-dealers is increasing,” he said, noting Capital Financial Services is now large enough to be considered a “medium-sized” advisory business. The United Heritage advisors, based predominantly in the upper and mid-west of the country, will be folded under the Capital brand. This deal allowed United Heritage Group to focus on its core insurance business, the group’s president Jack Winderl said in a statement. Mr Wells was confident the firm could make the acquisition work and retain its new advisors. He said Integrity – the mutual fund company with around $450 million assets under management – purchased Capital Financial Services in 2002, then an established broker-dealer with 80 advisors. The firm has since added advisors mainly though acquisition. “We have very similar cultures and are committed to providing the brokers with all the tools necessary to compete in today’s marketplace,” he said. Mr Wells wouldn’t rule out any future acquisitions to continue to grow the advisory business.