Investor Phillip Frost, the largest shareholder in, and chairman of, Ladenburg Thalmann Financial Services Inc., issued a challenge Friday to the independent-brokerage business, saying that his firm's plans to expand are second to none.
“It is worth noting that our commitment to growth in the independent-brokerage business is without equal,” he wrote in a letter to the firm's shareholders.
Mr. Frost's fortune, made primarily in the pharmaceutical business, is $2.2 billion, according to Forbes. Last year, Forbes ranked him the world's 437th-richest man.
In line with Ladenburg Thalmann's growth plans, the firm in August agreed to buy Securities America Inc. for $150 million plus considerations from Ameriprise Financial Inc. It was Ladenburg "s third acquisition of a major independent broker-dealer since 2007, Mr. Frost said. It bought Investacorp Inc. that year and Triad Advisors Inc. in 2008.
“We are the strategic player in our industry, committed for the long term to building an industry-best platform to drive profitable growth for our advisors and for the company,” Mr. Frost wrote.
Once the Securities America transaction is completed, more than 2,700 independent representatives and financial advisers will be affiliated with firms under the Ladenburg Thalmann umbrella, making it one of the largest independent-broker-dealer networks in the country, he wrote.
The firm last year reported revenue of $195 million and a loss of $11 million. The acquisition of Securities America, which typically generates more than $400 million in revenue per year, adds significantly to Ladenburg Thalmann's top line.
The firm's goal is to place its independent-broker-dealer operations side by side with its institutional business, Mr. Frost wrote.
“Since 2007, our plan has been to marry the stable and recurring revenues of the independent-brokerage business with the more volatile but potentially very profitable investment-banking/capital markets businesses, and we are pleased to report that it is working very well,” he wrote.
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