“The board earnestly sought to engage with Ancora and its candidates, but on multiple occasions, Ancora refused to allow the board to even speak to its candidates,” it says. The firm is “making significant progress” in carrying out a new strategy to place it in position for long-term growth, and the activists have “the wrong plan for Blucora,” according to the March 15 letter to shareholders from Walters and the nine other board members. DiSanto’s firm began speaking with management in December, roughly a month after one of its affiliates began purchasing shares and 11 months after longtime board member Christopher Walters became Blucora’s CEO. 24 in the District of Delaware.Īsked about Ancora’s claims against the firm, representatives for Blucora referred the questions to a detailed nine-page summary in the company’s annual proxy about the activists’ talks with management. The solicitation of shareholder support also extends to a federal lawsuit seeking an injunction against Blucora’s board nomination process that Ancora filed on Feb. … It's important to understand that, and I don't think they do.” “The advisors drive this business, they are your lifeblood. “It's not too late - they have a good business, they have a very good niche,” says Ancora CEO Fred DiSanto, referring to CPA practices that add wealth management through Avantax. In addition, the activists cite high management turnover, a base of advisor-tax professionals that fell by a net 214 financial representatives to 3,770 in the past year and a fee of $60 per account on direct-to-fund assets. Much of Ancora’s criticism of management revolves around the dearth of connections between the two business lines - more than five years after Blucora acquired the independent broker-dealer then known as HD Vest for $580 million.
Blucora responded to Ancora in its own March 15 letter to shareholders, saying the activists’ plan is “deeply flawed and would destroy shareholder value.” The dispute will cost Blucora $1.3 million in estimated expenses, its 2021 proxy states. In nominating four new board candidates ahead of the Dallas-based Blucora’s annual meeting next month, Ancora is calling for Blucora to sell its tax preparation software, TaxAct, and stop charging a fee to advisors for direct-to-fund assets.
An activist investor aiming to overhaul a midsize wealth manager’s parent firm is appealing directly to the firm’s advisors for support.Īncora Holdings - an asset manager with $8.7 billion in assets that owns 3.4% of outstanding shares in Avantax Wealth Management parent Blucora - sent an open letter on March 17 to Avantax’s roughly 3,800 advisors, arguing they have “suffered for far too long due to Blucora's missteps and poor decisions.” The salvo came three weeks after Ancora made its dispute public, in one of the few activist-investor campaigns to hit wealth management.