Blucora, the publicly traded parent of Avantax Wealth Management, the tax-centric broker/dealer created from the acquisitions of HD Vest and 1st Global, reported total advisor head count of 3,349 at the end of the second quarter, down by nearly 2% from the first quarter and about 7% from the year-ago quarter.
But the company said that attrition was skewed heavily to “nonproducers,” with 90% of those financial professionals who left during the quarter having less than $50,000 in rolling gross production.
Avantax recruited $514 million in new assets during the second quarter and just over $1 billion for the first half of 2022. That compares with $929 million in recruited assets for the full year 2021.
The firm had net new assets of $185 million during the quarter and reported total client assets of $76.5 billion, down from $86 billion a year ago.
The firm says it has refined the methodology for calculating client assets but has not recast the numbers for prior periods. The firm said the change was immaterial.
“With our financial results on track for the year, despite a volatile macro picture, we are confident in our ability to deliver even stronger results next year driven by continued strong operating performance as well as favorable interest rate impacts,” said Chris Walters, president and CEO of Blucora, in a statement. “We expect our positive trajectory to deliver valuable free cash flow in the coming years as we continue to deliver differentiated value and services to our customers and clients.”
Trailing-12-months advisor production was $616,428 for the quarter, down from $617,648 in the first quarter.
Avantax has shifted its recruiting strategy to focus on more-tenured advisors that have larger practices already. The firm’s legacy businesses, including HD Vest and 1st Global, had historically focused on recruiting newly licensed financial professionals—tax professionals, accountants and CPAs that have been in the wealth management business before.
Overall, Blucora’s second quarter non-GAAP earnings per share was 99 cents, down nearly 23% from a year ago but beating analysts’ expectations by 4 cents, according to SeekingAlpha.com. Revenues was $256.9 million, up 1% year over year, in line with expectations.
