In the midst of Proxy Battle, Avantax expands the management team


While an activist investor is waging a public proxy battle with its parent company Avantax Wealth Management, the tax-centric broker / trader that emerged from the acquisitions of HD Vest and 1st Global, it expanded its leadership team on Thursday.

Mike Holmes, former Marketing Director at USAA, joins the company as Chief Marketing Officer responsible for growing and supporting IBD’s 3,700 consultants and building the Avantax brand.

Mike Kobs, who most recently ran an Avantax practice, MRK Financial Solutions, has been named vice president of corporate relations and consulting. Kobs recently completed his succession plan at MRK. He will lead a new ambassador program at Avantax, providing high-level advice, planning and relationship management for the company’s top 100 practices.

Jamila Ramnanan has been named vice president of human resources for Avantax. She joined Blucora, the parent company of Avantax, in 2015 when she acquired HD Vest, where she held executive positions in the practice. She will be responsible for human resources for Avantax and Avantax Planning Partners, the recently renamed HK Financial Services business. She will also lead diversity and inclusion initiatives at Avantax and Blucora.

Avantax declined to comment on the leadership changes.

A management team with little industry experience in wealth management was one of the charges recently brought by an investor trying to impose revenue on Blucora’s board of directors. Ancora, a $ 8.7 billion AUM investment advisory firm that owns approximately 3.4% of Blucora’s stock, filed proxy voting with shareholders for four seats on Blucora’s board of directors. The current management team has not found any promised synergies between Avantax and Blucora Legacy business with professional tax software that is pushing the share price.

The mismanagement also alienates Avantax’s advisors, says Ancora, and sends many on the run to other brokers / traders.

In an open letter from Ancora’s four board nominees to Avantax’s 3,770 consultants sent out Wednesday, Ancora CEO Fred DiSanto pointed out that Avantax had suffered a net loss of 100 consultants over the past year, citing a lack of industry experience in the management team.

The list of complaints in the letter notes that advisors are being pushed away from their traditional direct-to-fund model and towards Avantax’s separately managed accounts, fees are being charged on advisors, and their business is generally not understood.

On Monday, Blucora’s board of directors issued a letter calling on shareholders to vote for the incumbent board members. He claimed DiSanto began «demanding» seats on the board shortly after his company began buying shares last November. This letter also criticized Ancora’s nominees.

Jonathan Henschen, president of the recruiting firm Henschen & Associates at Marine on St. Croix, said Avantax has had service and communication issues in recent years and recent leadership changes are not addressing them.

«These things don’t address the issues of the drop in service, the drop in communication with the advisors, and doing things that conflict with the advisors, such as increasing costs,» said he.

In particular, he said the firm last year imposed a $ 60 annual fee on mutual fund advisors held directly with the mutual fund companies, as opposed to brokerage accounts.

«I’m not blaming the shareholder,» said Henschen. “You hope the stock price will rise, and then you see the broker / dealer do things to get employees to flee. From the shareholder’s point of view, he would like a wake-up call for management to reverse this trend as it will affect the company’s profitability going forward. «

Avantax management also lost contact with the employees.

“They had a great relationship with Herb Vest through representatives from HD Vest. they enjoyed the culture; Everything was great. Their perception of Blucora is, «It’s very entrepreneurial, management does what management does and they really don’t care about us.» There is no management connection that they had at HD Vest and the same goes for 1st Global, ”he said. «Avantax has this ivory tower management that has no contact with the consultants on many levels.»

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