Harold C. Brown & Co., one of Buffalo's oldest independent brokerage firms, is dissolving, partly in response to the increasing regulatory burdens on small investment firms.
The firm expects to complete the breakup around the end of the year, with each of its five three-member investment teams going its own way. One team plans to form its own investment firm, while others will become partners or employees of existing firms, said Maureen Maguire, Harold C. Brown's vice president and chief operating officer.
"At the end of the day, Harold C. Brown will no longer exist," she said.
Maguire said the regulatory burdens from being a broker-dealer have grown in recent years, taking away from the time available to focus on clients. "It's just taken more and more time when you're both a broker-dealer and a registered investment adviser," she said.
As a result, the firm came up with several options to restructure or sell the firm, but none of those possibilities had unanimous support.
Rather than come up with a hybrid approach, the firm's partners decided to dissolve the firm. "Everybody has chosen an option that is compatible with our foundations," Maguire said.
"It was a well-thought-out process," she said. "This isn't a quick, or overnight, decision."
Harold C. Brown, one of the few remaining independent brokerage firms in Buffalo, was founded in 1932 by the firm's namesake. Longtime company executives Charles W. McCollum and W. Lawrence Buck acquired the firm in 1994 from Herbert F. Harvey, who took over the firm following Harold C. Brown's death in 1974. Katherine A. Christoferson later joined the ownership group, which has since been supplanted by the seven-member limited liability company that now owns the firm.
The firm has 32 employees and about $750 million in assets under management.
Members of two of the firm's three-member teams are forming their own investment advisory firms.
Buck, Deborah Stauring and Stephen Harts are forming Winthrop Financial, while Michael Pratt and Matthew Collard are forming Pratt Collard Advisory Partners.
One team, consisting of Peter Grogan, William Kelly and Mimi Schanzlin, will join United Capital Financial Advisers, where they will be managing directors.
Members of two other teams -- Christoferson, McCollum, William Deacon and Douglas Druzbik -- plan to join Wells Fargo Advisors.