National Holdings’ acquisition of broker-dealer WFG Investments and its 200 advisers called off

National Holdings’ deal to acquire WFG Investments, an independent broker-dealer, has fallen apart.

Wilson Williams, the chairman and CEO of Williams Financial Group, the parent of WFG, said in an interview on Monday that selling the firm’s assets to National wound up being too “complicated.”

National Holdings said in March it was acquiring select assets of Williams Financial Group, including the retail broker-dealer, WFG, for $2.3 million. The firm’s brokerage and advisory assets add up to about $3 billion, Mr. Williams said.

Both National Holdings and WFG “decided to go in a different direction,” Mr. Williams said. Rather than sell the assets, which would require the approval of the Financial Industry Regulatory Authority Inc., WFG is helping its 200 brokers and advisers move to three different firms, including a National Holdings broker-dealer, National Securities Corp.

“It’s not as productive financially, but it’s the right thing to do for the advisers and their clients,” Mr. Williams said.

Mr. Williams, who is retiring, declined to name the other two broker-dealers who are picking up WFG advisers and added it was too early in the process to know exactly how many were moving to National Securities.

WFG has recently been in Finra’s crosshairs. At the end of 2014, Finra fined WFG $700,000 for failing to commit the time, attention and resources to a range of critical obligations in its supervision of registered reps.

Mr. Williams said Finra did not put the kibosh on the deal. Rather, large legal fees and certain business lines, including WFG’s institutional trading and bond desk, were not a good fit for National Holdings.

David Levine, the CEO of National Securities, did not return calls seeking comment.

At the start of the year, industry executives and consultants widely believed more consolidation was coming to the IBD industry in 2017, and the market has been slowly developing. Small broker-dealers, who many consider the most…

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