Broker Check

MassMutual Firms Merge

MassMutual enterprises merge as insurer bolsters wealth management arm

Tobias Salinger | February 11, 2020

Originally published by Financial Planning Magazine


A trio of MassMutual enterprises have merged into a single firm as the giant insurer moves in the opposite direction of rivals that have spun off their broker-dealers.

In absorbing the Southeast Coast and South Florida offices of MML Investors Services early this year, Fort Lauderdale, Florida-based Coastal Wealth now has more than 450 advisors, support staff and managers, the firm said last month. The 27 offices in Florida and Georgia now manage some $10 billion in assets on behalf of more than 200,000 clients.

MassMutual's wealth management arm vaulted from as low as No. 17 in 2014 to No. 5 on Financial Planning’s most recent annual IBD Elite ranking of the largest firms in the sector. In 2016, the insurer acquired the MetLife Premier Client Group for $165 million MetLife’s former U.S. retail advisor force affiliated with MML Investors the following year. 

Big Insurers like Jackson National Life Insurance, Allianz Life Insurance Company of North America and John Hancock have sold their BDs in recent years amid higher regulatory expenses and lower margins. In contrast, MassMutual’s BD has more than tripled its annual revenue. It struck a deal in

2019 to use Commonwealth Financial Network’s advisor software.

MassMutual’s use of Commonwealth’s Advisor360 platform — combined with a heightened regulatory burden under rules like the SEC’s new Regulation Best Interest — display the appeal of the deal, according to CEO Jeremy Straub and Chairman Harris Fishman.

The enterprise’s combined services and the new technology are part of “a concerted effort to support the independent advisor” by MassMutual, Straub says.


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Chairman Harris Fishman (left) and CEO Jeremy Straub (right) of Coastal Wealth lead the Fort Lauderdale, Florida-based enterprise of more than 450 advisors and employees.

“They don't want to be just an insurance company. While margins are getting squeezed in all product lines, what's really important is that the advisor makes sure they're managing clients’ entire wealth,” Straub says.

“You want to be in a big boat,” he adds. “With this regulatory environment, you're better off being associated with a broker-dealer and a large regional that's going to be able to support your business and handle that change.”

Coastal’s support staff of more than 60 employees will provide the hundreds-strong force of advisors with specialty resources and scaled services like 401(k) business, fee-based accounts and life insurance, according to Straub. He and Fishman are sole owners of the enterprise.

“This is a growth opportunity as a result of these mergers,” Fishman says. “We want to grow all the markets that we're in and add more resources and services for our advisors so that they can better serve their clients.”

The parties didn’t disclose financial details of the deals, which they say closed on Jan. 7. Roger Dominey, former CEO of the Southeast office, is currently part of Coastal’s leadership team as executive vice president. MassMutual tapped Fishman — who is also general agent emeritus of the Philadelphia office — to help Straub lead the new enterprise.

"Jeremy and Harris are visionary leaders who each bring unique experiences and leadership to the financial services industry at large," John Vaccaro, head of MassMutual Financial Advisors, said in a statement. “The resources available in the larger firm will provide a tremendous opportunity to invest in progressive strategies to serve the evolving needs of customers." 

Fishman and Dominey have been affiliated with MML Investors since the 1980s, while Straub affiliated under MassMutual’s acquisition in 2017 after two years with MetLife’s MSI Financial Services, according to FINRA BrokerCheck.

According to Straub, Coastal can serve as a middle ground for potential breakaway advisors between going fully independent as an RIA and remaining in the career employee channel. “Our advisors don't have to choose between a small boutique firm or a big firm,” he says. “They could have both.”

 

Tobias Salinger

Senior Editor, Financial Planning