FA Magazine March/April 2026 | Page 30

INDEPENDENT BROKER-DEALER REVIEW AND RANKING 2026

2025 GROSS REVENUE RANK

FIRM NAME

NUMBER OF PRODUCING REPS

GROSS REVENUE 2025($ MM)

GROSS REVENUE PER REP 2025

FIRM PAYOUT % 2025

AUM 2025($ MM)

32 cfd Investments 144 59.03 409,960 Up to 92 % 7,500.00 33 Founders Financial Securities 86 52.51 656,437 Up to 90 % 5,640.13

34 XML Securities 23 27.35 1,056,521

Varies with an average of 50 %

4,075.99

* Total AUM includes brokerage and advisory assets. ** Responses based on firm ' s fiscal year. † Northwestern Mutual Investment Services '( NMIS ' s) AUM and revenue information includes NMIS brokerage accounts and investment advisory accounts of NMIS ' s affiliated federal savings bank, Northwestern Mutual Wealth Management Company( NMWMC), which are held at NMIS. We combine the information provided because NMIS markets itself under the umbrella of the Northwestern Mutual enterprise, which combines the offerings of NMIS and its parent and affiliates. ‡ 2025 AUM is as of 9 / 30 / 25. § Represents gross revenue per producing rep.

To download an expanded version of our survey, visit fa-mag. com / research / bd-survey.

“ The lines are kind of blurred now and broker-dealers and RIAs they’ re all competing with each other for the same business,” she says.

But many companies feel they get better value out of an advisor who is an employee rather than a free agent, and that it works out better if they join the employee W-2 channels, which are more profitable for the firms than 1099 business models.

“ PE does not like the uncapped salaries,” says Parhizkar.“ As [ private equity firms ] are coming in and buying up RIAs and B-Ds, they are putting advisors more in a traditional W-2 and saying‘ Hey, you ' re earning this much money, you may get some bonuses here and there because it ' s more predictable.’”

Buying In

Jeff Nash, a co-founder of Bridgemark Strategies who consults with financial planners for recruitment and buyouts, says that it’ s become a huge part of the business model for broker-dealers to buy up advisors’ books of business, even partially, because that book goes straight to the B-Ds’ bottom lines, a huge deal in a business hampered by lower EBITDA margins. The RIA world has bigger margins, and as long as B-Ds are constrained, they’ re going to look into buying their advisors’ businesses directly to brighten them up.

“ They’ re now buying percentages of advisors’ businesses,” he says.“ So you’ re buying 20 % of an advisor’ s business. And some firms are doing dollar for dollar where if I sell you 20 % of my business I’ m taking a 20 % reduction in payout.”

That’ s not a smart deal in some cases, he says. He asks rhetorically if selling 20 % of your revenue for four times is the same thing as selling 100 % of the revenue at four times.

“ And the answer is not even close,” he says.“ And the reason … is because if you’ re selling four times revenue and only 20 % of your revenue, you’ re keeping all of the expenses.”

That’ s good for an LPL’ s or Osaic’ s EBITDA margins, he says, less so for the advisor’ s. And it’ s happening at the RIA and the OSJ levels as well.

Larry Roth, the founder of consulting firm Ascentix Partners( and a former chief of two giant B-Ds himself: both Cetera and, before its rebrand as Osaic, the Advisor Group) agrees that when broker-dealers buy partial books of advisor business, the math simply works out in their favor.

“ Certain firms, Kestra being a good example, but also Osaic and LPL and Cetera, more of the independent firms are acquiring at an ever-increasing rate equity in their affiliated advisors,” he says.“ And it’ s beginning to move the dial on their valuation. One reason it does is when you buy those businesses your margins increase dramatically on those assets. And secondly, the investing public is placing a higher value on the broker-dealers that are growing their EBITDA as a result of this strategy. So you get a double benefit if you’ re a firm because not only are you growing your free cash flow and EBITDA but people who are investing in your firm are paying a higher multiple on the business.”

That’ s been true both in both public companies and private companies selling or recycling equity, he says.

26 | FINANCIAL ADVISOR MAGAZINE | MARCH / APRIL 2026 WWW. FA-MAG. COM