Insurance company wants to take its securities business up
market. German-owned annuities provider Allianz Life has
purchased Questar Capital Corporation, a securities brokerage
based in Ann Arbor, Mich. Allianz Life says the acquisition will
double its annual broker-dealer sales and pave the way to its
USAllianz unit becoming a top-10 U.S. broker-dealer by the end of
this decade, in part by enhancing its wealth-management
Details of the transaction weren’t disclosed. Questar’s
principals – Robert Boone, Scott Chimner, John Gakenheimer, Jason
Kavanaugh – will either join USAllianz as senior managers or work
as consultants to the newly expanded broker-dealer.
“This is an opportunity for us to grow our business,” says Lynn
Tyson, president of Minneapolis-based Allianz Life's retail
securities division. “We now have the tools to offer our clients
total wealth management.”
Yes and no
The deal adds Questar’s nearly 400 independent brokers to
USAllianz roll of 668 independent reps, and it includes Questar’s
small registered investment advisor platform. Questar, which was
founded in 1997, is registered to sell securities and security
products in all 50 states.
Allianz Life’s hope of doubling its securities brokerage sales
seems plausible given the fact that Questar reps, though fewer in
number, work up market from their USAllianz counterparts.
Though annuities dominate both platforms, Questar’s fee-based
business, at $350 million in assets at the end of 2004, is about
10 times bigger than USAllianz’ fee-based platform, according to
data from SourceMedia. For that matter, Questar edges USAllianz
out in commission sales as well, $29 million to $23 million in
2004. Average annual payout for a Questar broker was $75,585 last
year; at USAllianz it was $29,961. At Questar 14% of brokers
pulled in $150,000 or more; at USAllianz only 3% did.
USAllianz and Questar recorded impressive sales gains in 2004,
with USAllianz increasing revenue by 48% and Questar adding 34%
to its top line.
Both firms clear through Pershing. Both offer access to fee-based
portfolios through AssetMark. USAllianz also uses the third-party
investment platforms of Lockwood, which is a unit of Pershing,
and Jackson National Life-owned Curian Capital. Questar brings
third-party provider Advisorport, part of PFPC, to the table.
USAllianz has its work cut out to become a top-10 broker-dealer
by the end of the decade. Even if the wirehouses and other large
full-service players were to vanish, Allianz Life’s brokerage
unit, including Questar, would have 47 broker-dealers to surpass
in annual sales before it achieves top-10 status in the
independent category. And that’s assuming the competition stays
still through 2010.
Allianz Life is part of Frankfurt-based Allianz Group. –FWR