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Tampa, Fla.-based Calton & Associates, an independent broker/dealer with over $2 billion in assets, has recently ramped up its marketing and recruiting efforts after flying under the radar for the last 25 years. The firm plans to build itself up through mergers and acquisitions with smaller b/ds as well as by bringing on new reps and RIAs.

“The regulatory requirements for a $250,000 b/d, like we are, just continue to mount,” said Dwayne Calton, president and CEO of Calton. “If you’re not growing, you’re dying; you just don’t know it yet.”

To solidify its plans, Calton recently formed a recruiting and marketing agreement with John Simmers, who co-founded IBD Financial Network Investment Corporation, which eventually became part of the ING Advisors Network, and Scott Sherwood, who co-led Investacorp from 1980 through its acquisition by Ladenburg Thalmann. Simmers and Sherwood are both licensed with Calton and will be in charge of synergistic relationships, Sherwood said.

When the firm was founded in 1987, it had 18 shareholders, including Calton and his reps, who simply wanted to create a “safe” work environment for themselves. The firm never advertised; it grew over the years through word of mouth. Also, the group did a lot in the municipal bond space at the time, Calton said. But now, the firm’s business model has changed, with only five of the original shareholders left and about 200 total reps, doing all sorts of investments, including equities, corporate and government bonds, mutual funds, insurance and options. In addition, things have changed on the regulatory front, with greater regulatory fees and requirements facing IBDs, Calton said. All of these factors added up to now being the time to get out there and grow more aggressively.

“It’s a very very expensive business,” Sherwood said. “If you’re not growing and securing quality agreements and securing the knowledge to avoid some of the minefields, it’s a dangerous place to be.”

“I have seen these ‘let’s reinvent ourselves, and bring people in that are good at recruiting and good at repackaging the story, making some tweaks here and there to make the firm more attractive,’” said Jon Henschen, a recruiter with Henschen & Associates, who likened it to the growth of Ausdal Financial Partners in Davenport, Iowa. “So I’ve seen it done.

“It is increased expenses for b/ds, and one way to raise your profitability is to raise your revenues, and economies of scale can help.”

Simmers and Sherwood are tasked with growing the firm, and are also making a few changes to make the firm more appealing to potential reps.

For example, while Calton used to clear only through Southwest Securities, they recently added National Financial Services to its list of clearing firms. New reps that join the firm will also get equity-like participation, as Sherwood calls it. This is not equity shares of the company, but rather a share of potential profitability as a component of their compensation so reps are tied into the success of the firm. Calton also added new technology for consolidated reporting.

Sherwood said they don’t have any quotas as far as new advisor headcount or revenues, but he’s confident they’ll grow steadily.

“There will be spots where, or points where we may grow more rapidly than other points, as other firms maybe lose sight of the things that are important to quality advisors,” Sherwood said. “Sometimes there will be large blocks of folks available. As long as we can provide excellent support for them, and they’re good quality people, we want to be their home.”

Calton is not looking for advisors with any particular niche, except for those with larger practices that should be national in scope, Sherwood said. These are advisors who have more business than they can properly support, such as a radio or TV personality or an FA with a special in with a company. Sherwood said Calton can help these FAs achieve national exposure.

The new effort will also involve mergers and acquisitions with smaller b/ds. The firm is currently waiting for FINRA approval on one b/d asset acquisition of about 35 to 40 FAs, Sherwood said. Other potential deals range up to $28 million.

“Hopefully it’s not so much taking advantage of what’s blown up as it is helping to provide a lifeline of sorts to firms that realize that going it alone, if you don’t have the size, if you don’t have the ability to grow, that there are some alternatives,” Sherwood said.

At Investacorp, Sherwood helped grow the firm from 15 reps and $150,000 in commissions to 500 reps and $65 million in commissions. Simmers grew ING Advisors Network (now Cetera) from zero to over 8,500 advisors and $1 billion in revenue.