Pacific West Securities, an independent broker dealer with about 290 affiliated representatives and advisors is closing its doors. According to a press release, many of its representatives will be moving to Denver, Colo.-based Multi-Financial Securities Corp, a full-service brokerage unit of Cetera Financial Group. The release says a “recruitment deal” has been struck by the two brokers.
Shrinking margins in the independent broker-dealer space are blamed for the shut down at a time when many of its competitors in the business have also been unable to stay afloat.
“In recent years, we have been faced with a steady increase in costs to operate a high quality broker-dealer,” Karalyn Carlton, Pacific West vice president of marketing said in a statement, pointing to “the increased cost of regulation and supervision, as well as the need for investment in technology and platforms.”
Pacific West CFO Tony Pizelo states in Multi-Financial Services’ press release that “After extensive due diligence, we have chosen Multi-Financial as the best platform for our advisors.” Multi-Financial Securities Corp. and Pacific West are now collaborating on how best to move the brokers, he said.
Pacific West generated $46 million in fees and commission last year and has been on track to see $54 million in gross revenue this year, Investment News reported, adding that Pizelo expects well over 50 percent of Pacific West's brokers to make the move to Multi-Financial Services.
Pacific West is just the latest in a number of broker dealers that have been forced to call it quits since early 2010, Investment News states.
The Pacific-West/Multi-Financial recruitment deal remains subject to FINRA approval, Multi-Financial Services said.
