Some potential RIA buyers know they missed the boat: Larry Roth

investmentnews.com:

Veteran dealmaker and CEO Larry Roth has taken a step back from financial advice but is still very active in the industry.  

As the former chief executive of Advisor Group and Cetera Financial Group, Roth ran giant broker-dealer networks during the financial crisis and the bull run in the stock market that materialized afterwards. He’s now managing partner of his own consulting firm,RLR Strategic Partners, and a member of the board of Oppenheimer & Co. Inc., as well as holding other positions in the industry.

InvestmentNews sat down with Roth, 68, recently to get his take on the mergers and acquisition frenzy among registered investment advisors and the buyers, often called aggregators, like Focus Financial Partners Inc., which was recently taken private, and CI Private Wealth, now Corient.

IN: What do you make of today’s emphasis on these RIA aggregators versus the broker-dealer merger and acquisition market of 10 to 20 years ago, starting with LPL Financial being bought by two private equity firms back in 2005?

Larry Roth: The RIA buyers have thoughtful, specific plans or frames for the RIAs they buy. And that’s not just the branding, but client services and all that stuff. Those businesses — most, not all — are great businesses.

And the vast majority of the RIA aggregators or buyers do have some sort of a broker-dealer capability to serve their clients. But they don’t have the kind of regulatory headaches that come along with a broker-dealer, because they’re essentially outsourcing it. Those kinds of firms make a ton of sense.

IN: Are you seeing any flaws in that rollup strategy?

LR: I’m not disparaging them at all, but some names that come to mind are CI and Focus and Hightower. They’ve been buying a bunch of