Broker-dealer Invest Financial Corp. plans to announce today that it will add 57 financial institution relationships through a purchase of contracts held and operated by PFIC Securities Corp., a subsidiary of Morgan Keegan & Co. Inc.
The deal would let Invest, the Tampa unit of National Planning Holdings Inc., add 400 representatives working through community banks, credit unions, and independent contractors. The network of representatives, who collectively manage more than $3 billion of assets on behalf of more than 40,000 client accounts, is to operate under Invest's brand.
Lynn Niedermeier, Invest's president and chief executive officer, said it had $18 billion of assets under management and relationships with 130 financial institutions before the deal, but after the deal would have $21 billion under management and relationships with 187 institutions.
"This is adding a lot of small programs," Ms. Niedermeier said in an interview Thursday.
Morgan Keegan, the Memphis-based securities and investment banking arm of Regions Financial Corp. in Birmingham, Ala., got PFIC as part of Regions' 2004 purchase of Union Planters Corp. in Memphis. Mary Simmons, an executive vice president of PFIC, said Morgan Keegan plans to shut down the Nashville broker-dealer altogether.
"Our company will be dissolved," she said.
Ms. Simmons said Morgan Keegan was not looking to sell PFIC but decided, when approached by Invest, that the costs associated with running the business made it best to sell.
"Morgan Keegan was not proactively looking to get out of this business," she said, "but ultimately this was the best business decision." The deal's price was not disclosed.
Eric Bran, a spokesman for Morgan Keegan, said PFIC sold annuities clearing services to a niche market of community banks, credit unions, and independent contractors but that, after more than two years, Morgan Keegan "decided not to continue in what amounts to a peripheral business to the firm's core business model."
Ms. Niedermeier of Invest said the purchase would let it add banking relationships in Florida, Tennessee, Georgia, Louisiana, Arkansas, Texas, California, the Midwest, and Pennsylvania, but with the heaviest concentration of banks in the Southeast. Invest has been offering its investment platform to banks for 25 years, she said.
Customers with PFIC accounts will continue to get service from their current representatives, she said, and each bank involved had to consent to the deal in order for Invest to begin distributing through that bank.
A "handful" of banks withheld consent, Ms. Niedermeier said. Invest is interested in continuing to expand its presence in banks, she said.
"We are always interested in growing in the bank channel, and given the new technology we have built over the past five years we have a platform that creates a great deal of capacity for us," she said.
Invest's paperless electronic order entry system, which includes an eSignature application, is designed to help representatives increase their productivity by averting the need to print, file, fax, or mail client documentation.
National Planning Holdings, a unit of Jackson National Life Insurance Co., is an independent network of broker-dealers. Jackson National, which is based in Lansing, Mich., is a unit of London's Prudential PLC.
