One Of Biggest Names In Planning To Opt Out Of Indie Business

Edelman Financial Group Incorporated is one of the largest names in the financial planning business and has been the one of the top ranked investment advisory firms in the country by Barron’s Magazine. Just this week, the firm announced that it was getting out of the independent brokerage business, according to Investment News.

According to the news release, Edelman will continue with its wealth management business and financial planning unit. Citing “challenging economics”, Ric Edelman, the firm’s biggest shareholder and CEO, said the firm would be getting out of the independent brokerage business and he questioned the success of those who remained. Economic challenges have resulted in some company restructuring already and the fact that the independent brokerage business accounted for less than 1% of the company’s total revenue of $169 million was likely the last straw. The announcement will affect some 75 brokers, who have until March 2012 to find another place to work. If they choose to stay with Edelman, they will have to stay as registered investment advisers (RIAs).

Mr. Edelman has been in the independent brokerage business for years. He was with Royal Alliance Associates Incorporated, which was one of the largest indie firms. He left there is 2005 and went with a Houston, Texas firm, Sanders Morris Harris Group Incorporated. Eventually he was the biggest shareholder in the firm and it was renamed the Edelman Financial Group. According to the article, Edelman sees the challenges for firms as being the competition for advisers, increasing regulatory demands and supervising those demands, and technology demands and requirements. His comment was “we have better things to do with our resources than play in that game.”

Contact Us
Contact Us: (800) 259-9010