First Allied Securities Inc. has paid First Montauk Financial Corp. a $250,000 advance to pick up the latter’s affiliated registered representatives and advisers and persuade them to change firms, the companies said this morning in a statement.
This deal likely signals the end of First Montauk, said Victor Kurylak, the firm’s president and chief executive.
“I anticipate an orderly wind-down of the business,” he said. "The intent is for First Allied to take all the reps."
At play are 180 independent First Montauk reps and advisers who are on pace to generate a combined $24 million in fees and commissions this year.
Along with the $250,000 deposit, First Allied of San Diego said it would pay First Montauk of Red Bank, N.J., 30% of the commissions and fees that those reps generate.
The deal is subject to approval by First Montauk’s shareholders as well as the Financial Industry Regulatory Authority Inc. of New York and Washington,
The First Allied deal is much less sweet than a broker-dealer acquisition concluded last week.
Thursday, Ladenburg Thalmann Financial Services Inc. of Miami said it was acquiring Triad Advisors Inc. of Norcross, Ga. for 71% of its sales.
First Montauk reps who jump ship will eventually share in the deal’s proceeds, getting 25% of the total, Mr. Kurylak said.
The firm’s advisers have worked with 45,000 retail and institutional customers with about $3 billion in assets.
First Allied, one of the broker-dealers in the Advance Equities Financial Corp. network, generated $232.1 million in revenue last year.
The firm has seen some shift in its top management of late.
Former Chief Executive Keith Gregg moved to Advanced Equities Wealth Management this month and is now executive vice president and chief sales and marketing officer.
Adam Antoniades, president of First Allied, replaced Mr. Gregg.
For a full report, see next week’s issue of InvestmentNews.
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