As B. Riley Financial Inc. works to raise cash and manage its $2 billion debt load, and possibly be acquired, dozens of advisors have exited the firm's wealth unit, intensifying scrutiny around its financial stability.  As reported by AdvisorHub, nearly half the advisors from B. Riley Wealth's Boca Raton office joined Kestra Advisory Services, according to FINRA records. Their departure, coupled with other recent exits, represents about 8 percent of B. Riley's brokerage force.

Last month, several Memphis-based advisors, including Philip Wunderlich, left for Prospera Financial Services, bringing along $650 million in client assets. In Philadelphia, Wedbush Securities hired three B. Riley advisors managing $300 million in assets. The recent wave of departures could complicate efforts to sell the wealth unit as B. Riley navigates debt pressures, SEC investigations, and the fallout from soured investments. The company has reportedly received informal bids for portions of its wealth business, though no formal offers have emerged.

Founded on acquisitions, B. Riley Wealth grew through the purchase of Wunderlich Securities in 2017 and, later, National Holdings Corp. in 2021, which added $10 billion in assets. However, National Holdings faced costly compliance issues, leading to fines and settlements related to past missteps, including a $9 million penalty imposed by FINRA in 2018 for regulatory breaches. B. Riley has since worked to resolve these legacy issues, de-risking the business and cutting headcount by nearly half to focus on stability.

Despite these efforts, potential buyers may focus on acquiring only the most profitable segments of B. Riley's wealth business. According to AdvisorHub, analysts note that buyers likely will seek to avoid past liabilities while securing high-value advisors with established client relationships.

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