UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934

 

Check the appropriate box:

INVESTORS CAPITAL HOLDINGS, LTD.

(Name of Registrant as Specified In Its Charter)

Payment of Filing Fee (Check the appropriate box):

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PROXY STATEMENT/PROSPECTUS

To the Stockholders of Investors Capital Holdings, Ltd.:

You are cordially invited to a special meeting, referred to as the “special meeting,” of stockholders of Investors Capital Holdings, Ltd., or “ICH,” a Delaware corporation, at the Sheraton Colonial Boston North Hotel & Conference Center, One Audubon Rd., Wakefield, Massachusetts, on July 8, 2014, commencing at 10:00 a.m., local time.

We are pleased to inform you that ICH has entered into an Agreement and Plan of Merger, dated as of October 27, 2013, as amended as of February 28, 2014, referred to as the “merger agreement,” by and among RCS Capital Corporation, or “RCAP,” a Delaware corporation, Zoe Acquisition, LLC, or “Merger Sub,” a Delaware limited liability company and a wholly owned subsidiary of RCAP, and ICH. Pursuant to the merger agreement, if the requisite ICH stockholder approval and other approvals are obtained and the other closing conditions set forth therein are satisfied or waived, ICH will merge with and into Merger Sub, at which time the separate existence of ICH will cease and Merger Sub will continue as a subsidiary of RCAP under the name “Investors Capital Holdings, LLC.” We refer to this transaction as the “merger.” A copy of the merger agreement, as amended, is attached as Annex A to this proxy statement/prospectus and incorporated herein by reference.

If the merger is completed, at the effective time of the merger, each share of ICH common stock outstanding immediately prior to such time (including shares of restricted ICH common stock and shares issued upon exercise of options to purchase shares of ICH common stock) will be cancelled and converted into the right to receive, at the election of the holder and subject to the limitation on the amount of cash consideration payable in the merger described below, (i) $7.25 in cash or (ii) a number of shares of RCAP Class A common stock equal to the quotient of $7.25 divided by the volume weighted average trading price of a share of RCAP Class A common stock on the New York Stock Exchange, or NYSE, for the five consecutive trading days immediately preceding the closing date of the merger (plus cash in lieu of fractional shares). Stockholders of ICH who own more than one share of ICH common stock may elect, subject to the same limitation, to receive a combination of cash and RCAP Class A common stock with respect to their ICH shares. ICH stockholders who fail to make a valid election will automatically receive RCAP Class A common stock. Cash will be paid in lieu of any fractional shares of RCAP Class A common stock.

Under the merger agreement, in no event may the portion of the total merger consideration payable in cash, together with cash paid in lieu of fractional shares, exceed 60% of the total merger consideration. If the aggregate elections for payment in cash, together with cash paid in lieu of fractional shares, would cause the aggregate cash consideration payable in the merger to exceed such 60% threshold, the cash consideration payable will be reduced on a pro rata basis so that the 60% threshold is not exceeded, with any excess consideration paid in the form of RCAP Class A common stock.

ICH common stock is currently traded on the NYSE MKT (formerly, the American Stock Exchange) under the symbol “ICH.” RCAP Class A common stock is currently traded on the NYSE under the symbol “RCAP.”

At the special meeting, ICH stockholders will be asked to consider and vote on: (i) a proposal to adopt the merger agreement and approve the transactions contemplated by the merger agreement; (ii) a proposal to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to ICH’s named executive officers in connection with the merger; and (iii) a proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to adopt the merger agreement and approve the transactions contemplated by the merger agreement. The record date for determining the ICH stockholders entitled to receive notice of, and to vote at, the special meeting is May 9, 2014.

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After careful consideration, the ICH board of directors, acting upon the unanimous recommendation of a special committee consisting solely of the independent directors of ICH, (i) has unanimously determined that the merger agreement and the merger are advisable, fair to and in the best interests of ICH and its stockholders, (ii) has unanimously approved the merger agreement, the merger and the other transactions contemplated by the merger agreement and (iii) unanimously recommends that the stockholders of ICH vote FOR the proposal to adopt the merger agreement and approve the transactions contemplated by the merger agreement, FOR the proposal to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to ICH’s named executive officers in connection with the merger and FOR the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to adopt the merger agreement and approve the transactions contemplated by the merger agreement.

Your vote is very important, regardless of the number of shares you own. The merger cannot be completed unless the holders of at least a majority of the shares of ICH common stock outstanding on the record date vote in favor of the proposal to adopt the merger agreement at the special meeting.

This proxy statement/prospectus is both a prospectus related to the proposed issuance by RCAP of its Class A common stock in the merger and also a proxy statement for ICH to use in soliciting proxies for the special meeting. This proxy statement/prospectus is an important document containing answers to frequently asked questions and a summary description of the merger and the merger agreement, followed by more detailed information about RCAP, ICH, the merger, the merger agreement and other matters to be voted upon by ICH stockholders at the special meeting. We urge you to read this proxy statement/prospectus and the Annexes and other documents referred to herein carefully and in their entirety before voting. In particular, you should consider the matters described under “Risk Factors” beginning on page 42 .

Your vote is important .  Whether or not you plan to attend the special meeting in person, please authorize a proxy to vote your shares at the special meeting as promptly as possible. To authorize a proxy, complete, sign, date and mail your proxy card in the preaddressed postage-paid envelope provided or authorize your proxy by one of the other methods specified in this proxy statement/prospectus or the accompanying notice. Authorizing a proxy will ensure that your vote is counted at the special meeting if you do not attend in person. If your shares of common stock are held in “street name” by your broker or other nominee, only your broker or other nominee can vote your shares and your vote cannot be cast unless you provide instructions to your broker or other nominee on how to vote or you obtain a legal proxy from your broker or other nominee. You should follow the directions provided by your broker or other nominee regarding how to instruct your broker or other nominee to vote your shares. You may revoke your proxy at any time before it is voted.

We look forward to the successful merger of RCAP and ICH.

Sincerely,

RCS Capital Corporation   Nicholas S. Schorsch Executive Chairman of the Board of Directors		Investors Capital Holdings, Ltd. Timothy B. Murphy Chief Executive Officer

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the RCAP Class A common stock to be issued in the merger or determined if this proxy statement/prospectus is accurate or adequate. Any representation to the contrary is a criminal offense.

The accompanying proxy statement/prospectus is dated May 14, 2014 and is intended to be first mailed to ICH stockholders on or about May 14, 2014.

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Six Kimball Lane, Suite 150
Lynnfield, MA 01940

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agreement and the merger are advisable, fair to and in the best interests of ICH and its stockholders, (ii) has unanimously approved the merger agreement, the merger and the other transactions contemplated by the merger agreement and (iii) unanimously recommends that the stockholders of ICH vote FOR the proposal to adopt the merger agreement and approve the transactions contemplated by the merger agreement, FOR the proposal to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to ICH’s named executive officers in connection with the merger and FOR the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to adopt the merger agreement and approve the transactions contemplated by the merger agreement.

YOUR VOTE IS IMPORTANT TO THE COMPLETION OF THE MERGER

Whether or not you plan to attend the special meeting in person, please authorize a proxy to vote your shares as promptly as possible. To authorize a proxy, complete, sign, date and mail your proxy card in the preaddressed postage-paid envelope provided or, if the option is available to you, call the toll-free telephone number listed on your proxy card or use the Internet as described in the instructions on the enclosed proxy card. Authorizing a proxy will assure that your vote is counted at the special meeting if you do not attend in person. If your shares of ICH common stock are held in “street name” by your broker or other nominee, only your broker or other nominee can vote your shares of ICH common stock and the vote cannot be cast unless you provide instructions to your broker or other nominee on how to vote or obtain a legal proxy from your broker or other nominee. You should follow the directions provided by your broker or other nominee regarding how to instruct your broker or other nominee to vote your shares of ICH common stock. You may revoke your proxy at any time before it is voted. Please carefully review the proxy statement/prospectus accompanying this notice for more complete information regarding the merger and ICH’s special meeting.

By Order of the Board of Directors of
Investors Capital Holdings, Ltd.

Timothy B. Murphy
Chief Executive Officer

Lynnfield, Massachusetts
May 14, 2014

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ADDITIONAL INFORMATION

Each of RCAP and ICH file with the SEC annual, quarterly and current reports, proxy statements and other information meeting the informational requirements of the Securities Exchange Act of 1934, as amended, or the “Exchange Act.” This information is available without charge through the SEC’s website at www.sec.gov . You may also request this information from the appropriate company in writing or by telephone at the following addresses and telephone numbers:

RCS Capital Corporation 405 Park Ave., 15 th Floor New York, NY 10022 Attention: General Counsel Telephone: (866) 904-2988		Investors Capital Holdings, Ltd. Six Kimball Lane, Suite 150 Lynnfield, MA 01940 Attention: Rebecca Hice, Assistant Secretary Telephone: (781) 477-4748

If you would like to request documents, please do so by June 30, 2014, in order to receive them before ICH’s special meeting.

Stockholders may also consult RCAP’s or ICH’s websites for more information concerning the merger described in this proxy statement/prospectus and each of the parties thereto. RCAP’s website is www.rcscapital.com and ICH’s website is www.investorscapital.com . Information included on these websites is not incorporated by reference into this proxy statement/prospectus.

ABOUT THIS PROXY STATEMENT/PROSPECTUS

This proxy statement/prospectus, which forms part of a registration statement on Form S-4 filed by RCAP with the SEC (Registration No. 333-194804), constitutes a prospectus of RCAP for purposes of the Securities Act of 1933, as amended, with respect to the shares of RCAP Class A common stock to be issued to ICH stockholders in exchange for shares of ICH common stock pursuant to the merger agreement. This proxy statement/prospectus also constitutes a proxy statement for ICH for purposes of the Exchange Act. In addition, it constitutes a notice of meeting with respect to the special meeting of ICH stockholders.

You should rely only on the information contained in this proxy statement/prospectus. No one has been authorized to provide you with information that is different from that contained in this proxy statement/prospectus. This proxy statement/prospectus is dated May 14, 2014. You should not assume that the information contained in this proxy statement/prospectus is accurate as of any date other than that date. Neither our mailing of this proxy statement/prospectus to ICH stockholders nor the issuance of shares of RCAP Class A common stock to ICH stockholders pursuant to the merger agreement will create any implication to the contrary.

This proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction in which or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction. Information contained in this proxy statement/prospectus regarding RCAP has been provided by RCAP and information contained in this proxy statement/prospectus regarding ICH has been provided by ICH.

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		Page
FREQUENTLY USED TERMS			1
QUESTIONS AND ANSWERS ABOUT THE PROPOSED MERGER			3
SUMMARY			13
The Companies			13
The Special Meeting; Stockholders Entitled to Vote; Vote Required			24
The Merger			25
The Merger Agreement			26
What You Will Receive in the Merger			26
Treatment of Restricted Stock and Options			26
Voting Agreement			26
Recommendation of the ICH Board of Directors and Its Reasons for the Merger			27
Opinion of Financial Advisor to the Special Committee			27
Interests of ICH’s Directors and Executive Officers in the Merger			27
Approval of Compensation that May be Paid or Become Payable to ICH’s Named Executive Officers in Connection with the Merger			28
Effective Time of the Merger			28
Elections and Election Forms			29
Surrender of ICH Stock Certificates			29
Accounting Treatment			29
United States Federal Income Tax Consequences			29
Listing of RCAP Class A Common Stock; Delisting and Deregistration of ICH Common Stock			29
No Appraisal Rights			30
Conditions to the Merger			30
Regulatory Approvals			31
No Solicitation by ICH of Alternative Acquisition Proposals			32
Termination of Merger Agreement			33
Expenses and Termination Fees			34
Comparison of the Rights of Holders of RCAP Class A Common Stock and ICH Common Stock			34
Selected Historical and Pro Forma Consolidated Financial Data			34
Unaudited Comparative Per Share Data			35
Comparative Market Value of Common Stock			36
Dividend Data			41
RISK FACTORS			42
Risks Related to the Merger			42
Risks Related to the Recent and Pending Acquisitions			46
Risks Related to the Acquired Businesses			50
Risks Related to RCAP’s Existing Businesses			54
Risks Related to the Securities Industry			64
Risks Related to RCAP’s Structure			70
Risks Related to RCAP Class A Common Stock			78
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS			82
THE SPECIAL MEETING			84
Time, Place and Purpose of the Special Meeting			84
Recommendations of the ICH Board of Directors			84
Record Date and Quorum			84

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		Page
Record and Beneficial Ownership; Attendance			85
Vote Required			85
How to Vote			86
Stock Ownership and Voting by ICH’s Directors and Executive Officers; Voting Agreement			87
Proxies and Revocation			87
Adjournments			88
Proxy Solicitations; Expenses			88
Householding			88
Questions and Additional Information			88
PROPOSALS SUBMITTED TO ICH STOCKHOLDERS			89
THE MERGER			91
General			91
Background of the Merger			91
ICH’s Reasons for the Merger and Recommendation of the ICH Board of Directors			98
RCAP’s Reasons for the Merger			102
Opinion of Financial Advisor to the Special Committee			104
Unaudited Financial Projections of ICH			110
Interests of ICH’s Directors and Executive Officers in the Merger			112
Merger-Related Compensation for ICH’s Named Executive Officers			113
Board of Directors and Management of RCAP Following the Merger			114
No Appraisal Rights			114
Regulatory Approvals			115
Accounting Treatment			115
Material U.S. Federal Income Tax Consequences of the Merger			115
NYSE Listing of RCAP Shares			115
Delisting and Deregistration of ICH Common Stock			116
THE MERGER AGREEMENT			117
Explanatory Note Regarding the Merger Agreement			117
The Merger			117
When the Merger Becomes Effective			117
Consideration to be Received Pursuant to the Merger			117
Elections and Election Forms			119
Deposit of Merger Consideration; Surrender of ICH Stock Certificates			120
Representations and Warranties			121
Conduct of Business Pending the Merger			123
No Solicitation by ICH of Alternative Acquisition Proposals			126
No Changes of Recommendation			128
Additional Agreements			129
Conditions to the Merger			133
Termination			135
Termination Fees and Expenses			136
Effect of Termination			136
Fees and Expenses			137
Amendments, Extensions and Waivers			137
Governing Law			137
No Third-Party Beneficiaries			137
Specific Performance			137

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		Page
VOTING AGREEMENT			138
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER			139
Material U.S. Federal Income Tax Consequences of the Merger			140
Material U.S. Federal Income Tax Consequences of Owning and Disposing of RCAP Class A Common Stock			142
Taxation of U.S. Stockholders			142
RCS CAPITAL CORPORATION			144
Business Overview			144
Our Business			152
Our Existing Businesses			152
Our Businesses Following the Completion of the Recent and Pending Acquisitions			161
The Recent and Pending Acquisitions			166
Our Structure and The Exchange Transactions			178
Selected Historical Financial Data			184
Management’s Discussion and Analysis of Financial Condition and Results of Operations			186
Management			203
RCS Capital Management and American Realty Capital			217
Relationships and Related Party Transactions			221
Principal Stockholders			238
Dividend Policy and Dividends			241
Description of Capital Stock			242
INVESTORS CAPITAL HOLDINGS, LTD.			246
Business Overview			246
Property			252
ICH Common Stock Information			252
Legal Proceedings			252
Beneficial Ownership of ICH Common Stock by Management and Principal Stockholders of ICH			253
Management’s Discussion and Analysis of Financial Condition and Results of Operations			255
ZOE ACQUISITION, LLC			265
COMPARISON OF CERTAIN RIGHTS OF STOCKHOLDERS OF RCAP AND ICH			266
OTHER MATTERS			274
Stockholder Proposals			274
Legal Matters			274
Experts			274
Interests of Named Experts and Counsel			275
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure of RCAP			275
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure of ICH			276
Other Proposals			276
WHERE YOU CAN FIND MORE INFORMATION			277
INDEX TO FINANCIAL STATEMENTS			F-1
ANNEX A — AGREEMENT AND PLAN OF MERGER, AS AMENDED			A-1
ANNEX B — VOTING AGREEMENT			B-1
ANNEX C — OPINION OF CASSEL SALPETER & CO., LLC			C-1

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Frequently Used Terms

Except where the context requires otherwise, in this proxy statement/prospectus:

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QUESTIONS AND ANSWERS ABOUT THE PROPOSED MERGER

The following questions and answers are intended to address briefly some commonly asked questions regarding the merger, the merger agreement, as amended, and the special meeting. These questions and answers may not address all questions that may be important to you as a stockholder. Please refer to the “Summary” and the more detailed information contained elsewhere in this proxy statement/prospectus, the Annexes to this proxy statement/prospectus and the other documents referred to in this proxy statement/prospectus, which you should read carefully and in their entirety.

This document is also a prospectus being delivered to you by RCAP because RCAP will issue shares of RCAP Class A common stock in the merger to ICH stockholders electing to receive such shares as merger consideration.

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If ICH stockholders fail to approve the proposal to adopt the merger agreement, the merger cannot be completed.

The special committee unanimously recommended that the ICH board of directors approve the merger agreement and the merger and submit the merger agreement and the merger for approval by the ICH stockholders.

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For illustration purposes only, the exchange ratio would be 0.21 (based on $34.25, representing the volume weighted average trading price of a share of RCAP Class A common stock on the NYSE for the five consecutive trading days immediately preceding the date of this proxy statement/prospectus), and a holder of ten shares of ICH common stock who elected to receive shares of RCAP Class A common stock with respect to all ten of such holder’s shares of ICH common stock would be entitled to two shares of RCAP Class A common stock and $4.00 in cash in respect of the remaining fractional share interest.

For additional information about elections and the election form, see “The Merger Agreement —  Elections and Election Forms” beginning on page 119 .

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If your shares of ICH common stock are held through a bank, brokerage firm, trustee or other nominee, you are considered the beneficial owner of shares of ICH common stock held in nominee or “street name.” In that case, this proxy statement/prospectus has been forwarded to you by your bank, brokerage firm, trustee or other nominee who is considered, with respect to those shares of ICH common stock, the stockholder of record. As the beneficial owner of shares of ICH common stock held in nominee or “street name,” you have the right to direct your bank, brokerage firm, trustee or other nominee how to vote your shares of ICH common stock by following their instructions for voting.

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You should be aware that Timothy B. Murphy, ICH’s President and Chief Executive Officer, has entered into a voting agreement with RCAP (with respect to 762,624 shares of ICH common stock, representing approximately 10.54% of ICH common stock outstanding on the record date for the special meeting), pursuant to which Mr. Murphy, among other things, has agreed to vote his shares of ICH common stock in favor of the adoption of the merger agreement and against any alternative transaction. See the section entitled “Voting Agreement” beginning on page 138 for more information.

Because the affirmative vote required to approve the proposal to adopt the merger agreement is based upon the total number of outstanding shares of ICH common stock, if you are a stockholder of record and fail to submit a proxy or to vote in person at the special meeting, or if you vote “abstain,” or if you are not a stockholder of record and do not provide your bank, brokerage firm or other nominee with voting instructions, it will have the same effect as a vote against the proposal to adopt the merger agreement.

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If you hold your shares of ICH common stock in nominee or “street name,” please refer to the instructions provided by your bank, brokerage firm or other nominee to see the choices available to you.

Please note that you are entitled to attend the special meeting only if you are a record or beneficial holder of ICH common stock as of the record date, or if you hold a valid proxy for the special meeting.

If you are a beneficial owner of shares of ICH common stock held in nominee or “street name” and wish to attend and vote in person at the special meeting, you must provide a “legal proxy” from the bank, brokerage firm or other nominee that holds your shares giving you the right to vote the shares at the special meeting, because you are not the record holder of ICH common stock as of the record date.

If you are a proxy holder, you will need to show a valid proxy signed by an ICH stockholder and proof of the signing stockholder’s record ownership.

All persons attending the special meeting in person must bring government-issued photo identification, such as a driver’s license or passport, to the special meeting in order to be admitted to the special meeting.

If you choose either of these two methods, you must submit your notice of revocation or your new proxy to the Secretary of ICH, before the special meeting.

Third, you can attend the special meeting and vote in person. Simply attending the special meeting without voting, however, will not revoke your proxy.

If your shares of ICH common stock are held through a bank, brokerage firm or other nominee, please contact your bank, brokerage firm or other nominee as to its procedures for the revocation of your instructions and/or the giving of new instructions on how to vote the shares held by it on your behalf. Please note that if you are a beneficial owner of shares of ICH common stock held in nominee or “street name” and wish to vote in person at the special meeting, you must provide a “legal proxy” from the bank, brokerage firm or other nominee that holds your shares giving you the right to vote the shares at the special meeting, because you are not the record holder of ICH common stock as of the record date.

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Also, regardless of whether you plan to attend the special meeting, please send in a completed and signed election form (which is separately being mailed to you), together with the required evidence of your ICH common stock ownership, in accordance with the instructions contained in the form.

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John Cataldo, Chief Compliance Officer and Counsel
Investors Capital Holdings, Ltd.
Six Kimball Lane, Suite 150
Lynnfield, MA 01940
Telephone: (781) 593-8565

If you have any questions about your election or need a copy of the election form, please contact:

Georgeson Inc.
480 Washington Boulevard, 26 ^th Floor
Jersey City, NJ 07310
Toll Free: 866-767-8989

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SUMMARY

The following summary highlights some of the information contained in this proxy statement/prospectus. This summary may not contain all of the information that is important to you. For a more complete description of the merger agreement, as amended, the merger and the other transactions contemplated thereby, you should read carefully this entire proxy statement/prospectus, including the attached Annexes and other documents referred to in this proxy statement/prospectus. We have included page references parenthetically to direct you to a more complete description of the topics presented in this summary.

The Companies

RCS Capital Corporation (see page 144 )

RCS Capital Corporation, or “RCAP,” is a holding company that was incorporated in Delaware on December 27, 2012. RCAP currently is engaged in the wholesale distribution and investment banking, capital markets and transaction management services businesses through Realty Capital Securities, RCS Advisory and ANST. Following the consummation of the Cetera acquisition on April 29, 2014, RCAP also is engaged in the independent retail advice business through Cetera. During the period from October 1, 2013 to April 3, 2014, RCAP entered into agreements to acquire the other acquired businesses, including ICH, through the pending acquisitions, including the merger, which have not yet been consummated. The discussion of RCAP’s businesses that it will engage in following the completion of the recent and pending acquisitions assumes the consummation of the pending acquisitions, including the merger. Accordingly, references to RCAP’s independent retail advice platform which will consist of Cetera, First Allied, ICH, J.P. Turner, and Summit, and RCAP’s investment management platform, which will consist of Hatteras, include the current and past operations of Cetera and the other acquired businesses which will only be owned and operated by RCAP following the consummation of the pending acquisitions, including the merger. There can be no assurance that any or all of the pending acquisitions, including the merger, will close. See “Risk Factors — Risks Related to the Recent and Pending Acquisitions.”

RCAP’s Existing Businesses (see page 152 )

RCAP’s existing businesses consist of a leading wholesale distribution platform and an investment banking, capital markets and transaction management services platform serving direct investment programs.

Since its inception in 2007, RCAP has focused exclusively on providing financial products and investment solutions to “mass affluent” households, which RCAP defines as households with $100,000 to $1,000,000 of investable assets, and we had advised on $22.7 billion of equity offerings substantially all of which involved related parties. During 2013, RCAP advised on $28.1 billion in capital markets and mergers and acquisitions activities, substantially all of which involved related parties.

RCAP is also the leading distributor of direct investment programs in the United States, with a 35.1% market share measured by equity capital raised of all direct investment programs and a 41.2% market share measured by equity capital raised for 2013 of non-traded REITs, the largest segment of direct investment programs, according to Robert A. Stanger & Co., or Stanger. For the quarter ended March 31, 2014, RCAP had a 28.0% market share measured by equity capital raised of all direct investment programs and a 29.0% market share measured by equity capital raised of non-traded REITs. In addition, RCAP’s investment banking, capital markets and transaction management services platform was the second largest advisor of real estate mergers and acquisitions transactions in the United States in 2012 and 2013, as measured by total value of announced transactions according to SNL Financial LC, or SNL Financial.

Wholesale Distribution.   RCAP’s wholesale distribution platform is the leading multi-product distributor of direct investment program offerings to independent broker-dealers and the retail financial advisor community as measured by total equity capital raised by direct investment programs distributed by RCAP and number of direct investment programs distributed, according to Stanger. As of March 31, 2014, RCAP was distributing ten public non-listed direct investment program offerings effective with the SEC and none of its competitors was distributing more than five. Leveraging the expertise of its affiliate, American Realty Capital, the leading sponsor of real estate direct investment programs, RCAP has developed substantial distribution capabilities through a selling group of approximately 260 brokerage firms with approximately 900 active selling agreements supporting approximately 80,000 financial advisors. In 2013, total equity capital raised by

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direct investment programs distributed by RCAP exceeded $8.6 billion, representing a 35.1% market share of all direct investment programs and a 41.2% market share of non-traded REITs, the largest segment of direct investment programs according to Stanger.

For the quarter ended March 31, 2014, RCAP had a 28.0% market share of all direct investment programs, measured by equity capital raised and a 29.0% market share of non-traded REITs measured by equity capital raised. From inception through March 31, 2014, RCAP’s wholesale distribution platform has distributed 24 offerings (public non-listed and private) and raised equity capital for 18 public non-listed offerings of approximately $16.6 billion. As of April 30, 2014, Realty Capital Securities is distributing nine public non-listed offerings seeking to raise a total of $14.2 billion of equity. Additionally, as of that date, Realty Capital Securities serves as the distributor for three open-end mutual funds and one closed-end interval fund. The offerings are direct investment programs registered with the SEC, consisting primarily of non-traded REITs. The offerings are direct investment programs registered with the SEC, consisting primarily of non-traded REITs. The offerings are sector-specific and consist of net lease real estate, healthcare, grocery anchored retail, real estate debt, oil and gas, anchored core retail, small mid-market lending, global sale-leaseback, New York office and retail, a closed-end real estate securities fund, an open-end real estate securities fund and a non-traded business development company fund. Substantially all of RCAP’s offerings relate to direct investment programs sponsored by its affiliate, American Realty Capital.

Revenues for RCAP’s wholesale distribution platform grew from $1.4 million in 2008 to $803.0 million in 2013. Meanwhile, the non-traded REIT industry has itself grown rapidly, with total annual equity capital raised increasing from $9.6 billion in 2008 to $19.6 billion in 2013, according to Stanger.

Investment Banking, Capital Markets and Transaction Management Services.   RCAP’s investment banking, capital markets and transaction management services platform provides comprehensive strategic advisory services focused on the direct investment programs, particularly non-traded REITs. These strategic advisory services include mergers and acquisitions advisory, capital markets activities, registration management, and other transaction support services that capture value across the direct investment program lifecycle. RCAP has demonstrated particular expertise in the real estate sector by its status as the second largest advisor of real estate mergers and acquisitions transactions in 2012 and 2013, executing deals with $4.1 billion and $10.3 billion in transaction value, respectively, according to SNL Financial. To date, these services have been provided primarily to clients that were sponsored or managed by American Realty Capital. Due to the specialized nature of the direct investment program industry, RCAP believes it is particularly well suited to advise funds and direct investment programs that are distributed by Realty Capital Securities.

Research Division.   In March 2014, RCAP launched SK Research, LLC, or SK Research, the initial component of a new research division dedicated to alternative investment programs. As a first step in RCAP’s establishment of a research division, SK Research will provide focused research, consulting, training and education, and due diligence on traditional and non-traditional investment products. RCAP believes that adding a research division will augment its back office and investment management capabilities and enhance the training, education and practice management tools available to its independent retail advice platform and the financial advice it can provide to its clients. RCAP believes the launch of SK Research will benefit both its independent retail advice platform and the broader community of mass affluent investors who will rely on RCAP’s financial advisors and its investment programs.

RCAP’s Businesses Following the Completion of the Recent and Pending Acquisitions (see page 161 )

Following the completion of the recent and pending acquisitions, RCAP will incorporate two additional complementary business platforms into its existing businesses: (1) a leading independent retail advice platform targeting mass affluent investors; and (2) an investment management platform specializing in alternative investments which will consist of Hatteras. Cetera, which was acquired by us on April 29, 2014, is the initial component of RCAP’s independent retail advice platform targeting mass affluent investors, and First Allied, ICH, J.P. Turner and Summit also will be incorporated into RCAP’s independent retail advice platform following the completion of the pending acquisitions. RCAP believes that the combination of these businesses with its existing businesses will make RCAP a pre-eminent source for independent retail advice, interests in direct investment programs and alternative investment solutions to retail investors. In particular, RCAP believes its complementary independent retail advice platform, wholesale distribution platform, and investment

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banking, capital markets and transaction management services platform will position RCAP to capture value across the direct investment program lifecycle.

Based on currently available market data, RCAP expects to be the second largest network of financial advisors in the United States after giving effect to the recent and pending acquisitions with $208.3 billion in assets on a pro forma basis under administration, approximately 1.9 million clients, and a network of over 9,100 financial advisors as of March 31, 2014.

RCAP believes the scope and scale of its business will be substantial competitive advantages, as they will allow RCAP to provide superior investment products, invest greater resources in financial advisor training and business development, and create a more attractive platform for financial advisors, thereby increasing financial advisor recruitment and retention.

On a pro forma basis for the year ended December 31, 2013 after giving effect to the recent and pending acquisitions, RCAP would have had $2.6 billion in revenues. For the year ended December 31, 2013 after giving effect to the recent and pending acquisitions on an aggregate basis, RCAP’s revenues would have been comprised of 63% from its independent retail advice platform, 32% from its wholesale distribution platform, 3% from its investment banking, capital markets and transaction management services platform and 2% from its investment management platform.

Independent Retail Advice.   Through the broad network of financial advisors on RCAP’s independent retail advice platform, RCAP will offer financial advice and investment solutions to mass affluent investors with investment needs that are not served by the offerings and capabilities of captive investment advisors and broker-dealers. Cetera now operates, and each of the other acquired businesses will operate, as an independent subsidiary under its own brand and management, but with shared back-office and support systems.

Financial advisors in the independent channel are financial professionals, most of whom operate out of small offices, who provide affluent individuals investment and wealth management advice and services and use independent channels, such as our independent retail advice platform, to provide their clients with access to financial products and investment advisory services. Financial advisors generally are registered as investment advisory representatives with a registered investment adviser and registered with a broker-dealer as registered representatives, which allows them to perform brokerage services for clients by executing specific securities transactions, and may also be licensed insurance agents affiliated with insurance companies.

RCAP’s independent retail advice platform will provide independent groups of affiliated financial advisors or other financial professionals with the technology, infrastructure and other support and services they need to serve their clients. RCAP also will provide its financial advisors with a wide array of practice development and operational support services that it believes will help its financial advisors launch new relationships and strengthen existing ones.

RCAP intends to provide its financial advisors with access to a wide range of financial products, including mutual funds, fixed and variable annuities, alternative investments, equity and fixed income securities, and other financial products. Cetera is, and the other acquired businesses will be, able to determine independently which of the products they will offer and their financial advisors will be able to select which products to recommend to their clients.

RCAP will have the second largest network of financial advisors after giving effect to the recent and pending acquisitions with over 9,100 in the United States that collectively have approximately $208.3 billion in assets under administration on a pro forma basis as of March 31, 2014.

Investment Management.   RCAP’s investment management platform, which primarily will involve fund-of-funds investments, will provide investment advisory, distribution and other services, such as transfer agent and fund administration services, to the Hatteras family of funds. Hatteras had approximately $2.7 billion in assets under management and a product portfolio that included seven open-end mutual funds and one closed-end fund as of March 31, 2014.

A broker-dealer subsidiary of Hatteras will act as distributor for the funds and a subsidiary of Hatteras will serve as manager and advisor for all of the Hatteras funds and perform all investment management services pursuant to contracts with the funds.

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These funds will be available through unaffiliated third-party financial institutions, our independent retail advice platform and Hatteras’ existing internal distribution channel.

RCAP’s principal executive offices are located at 405 Park Avenue, 15 ^th Floor, New York, New York 10022, and its telephone number is (866) 904-2988.

For additional information about RCAP, see “RCS Capital Corporation” beginning on page 144 .

The Recent and Pending Acquisitions (see page 166 )

As part of its plan to expand, diversify and grow its business, RCAP completed the Cetera acquisition on April 29, 2014, and it has entered into agreements to acquire the other acquired businesses. Cetera, First Allied, ICH, J.P. Turner and Summit, collectively, had over 9,100 financial advisors in 5,881 branch offices across the United States, with approximately $208.3 billion of assets under administration and approximately 1.9 million clients as of March 31, 2014. Collectively, these independent broker-dealers earned approximately $199,000 in gross revenue per financial advisor for the year ended December 31, 2013. RCAP has also entered into an agreement to acquire the assets of Hatteras, a company engaged in sponsoring, managing and distributing alternative investment funds registered as investment companies with the SEC. RCAP’s plan to expand and grow its business also includes the exchange transactions.

Cetera and each of the other acquired businesses will continue to operate independently under separate brands and management, with Cetera, First Allied, ICH, J.P. Turner and Summit comprising RCAP’s independent retail advice platform and Hatteras comprising its investment management platform.

The following table sets forth certain operating metrics of the acquired businesses that will comprise RCAP’s independent retail advice platform as of March 31, 2014 (except as otherwise noted).

Brand Platform		Assets under Administration				Financial Advisors				Gross Revenue per Financial Advisor (1) (in thousands)				Clients (in thousands)				Branch Offices
Cetera (2)		$	152.0 billion				6,833			$	174	(3)			1,325				4,544
First Allied			33.7 billion				1,194				294				419				583
ICH			8.9 billion				452				211				106				340
J.P. Turner			4.3 billion				323				257				46				176
Summit			9.4 billion				324				284				50				238
Total		$	208.3 billion				9,126			$	199	(4)			1,946				5,881

The Cetera Acquisition.   On April 29, 2014, RCAP completed the acquisition of Cetera, the initial component of RCAP’s independent retail advice platform targeting mass affluent investors. Formed in 2010 through the purchase of three ING Groep N.V. broker-dealers, Cetera is a financial services holding company that provides independent broker-dealer services and investment advisory services through four distinct independent broker-dealer platforms: Cetera Advisors LLC, Cetera Advisor Networks LLC, Cetera Investment Services LLC (d/b/a Cetera Financial Institutions) and Cetera Financial Specialists LLC. With approximately 6,833 financial advisors in 4,544 branch offices across the United States, $152.0 billion in assets under administration and approximately 1,325,000 clients as of March 31, 2014, Cetera is a leading independent broker-dealer. Cetera had approximately $174,000 in gross revenue per financial advisor for the year ended December 31, 2013 on a pro forma basis.

RCAP paid consideration of $1.15 billion in cash, including repayment of $208.5 million of debt of Cetera at closing.

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The Cetera Financings.   In order to complete the Cetera acquisition, RCAP entered into a series of financing transactions, which we refer to collectively as the Cetera financings, with Luxor Capital Group, LP, or Luxor, and certain banks, including Barclays Bank PLC, or Barclays, and Bank of America, N.A., or Bank of America, which we refer to collectively as the banks, and entered into certain other agreements related thereto.

Concurrently with the closing of the Cetera acquisition on April 29, 2014, RCAP entered into the following facilities with the banks: (i) a $575.0 million senior secured first lien term loan facility, or the first lien term facility, having a term of five years; (ii) a $150.0 million senior secured second lien term loan facility, having a term of seven years, or the second lien term facility, and together with the first lien term facility, the term facilities; and (iii) a $25.0 million senior secured first lien revolving credit facility having a term of three years, or the revolving facility and, together with the term facilities, the bank facilities.

Also on April 29, 2014, RCAP, RCAP Holdings, Luxor and certain of its affiliates entered into a securities purchase agreement pursuant to which Luxor purchased certain securities convertible into shares of RCAP Class A common stock, which we refer to as the Luxor securities, in a private offering. RCAP also made certain other agreements with Luxor.

The Luxor securities consist of $120.0 million (face amount) of 5% convertible notes, or the convertible notes, issued at a price of $666.67 per $1,000 of par value (for gross proceeds to RCAP upon issuance of $80.0 million) and $270.0 million (aggregate liquidation preference) of 7% convertible preferred stock, or the convertible preferred stock, issued at a price of 88.89% of the liquidation preference per share (for gross proceeds to RCAP upon issuance of $240.0 million).

Proposed Public Offering Pursuant to Form S-1, as amended.   On February 13, 2014, RCAP filed a Registration Statement on Form S-1 with the SEC relating to a proposed public offering of shares of RCAP Class A common stock, which we refer to as RCAP’s proposed public offering or the proposed public offering. The shares of RCAP Class A common stock included in the proposed public offering are expected to be sold by RCAP and by RCAP Holdings, as selling stockholder. Concurrently with the closing of the proposed public offering, RCAP expects to complete a concurrent private offering to Luxor at the public offering price per share pursuant to the securities purchase agreement under which the Luxor securities were sold in connection with the Cetera financings. RCAP intends to use the net proceeds from the proposed public offering and the concurrent private offering, which we also refer to as the RCAP offerings, to fund a portion of the cash consideration and expenses required for the pending acquisitions and for working capital purposes, including additional acquisitions. The proposed public offering is not conditioned upon the closing of the pending acquisitions. If the pending acquisitions are not consummated, RCAP intends to use the net proceeds from the proposed public offering for general corporate purposes, including additional acquisitions. There can be no assurance that the proposed public offering or the concurrent private offering will be consummated.

The First Allied Acquisition.   First Allied is a leading independent broker dealer with approximately 1,194 financial advisors in 583 branch offices across the United States, $33.7 billion in assets under administration and approximately 419,000 clients as of March 31, 2014. First Allied had approximately $294,000 in gross revenue per financial advisor for the year ended December 31, 2013.

First Allied was acquired by RCAP Holdings through a merger transaction on September 25, 2013 for an effective cost of $177.0 million, consisting of $145.0 million in merger consideration (including exchangeable notes issued by RCAP Holdings, which we refer to as the First Allied notes, in the initial aggregate principal amount of $26.0 million) paid to the former owners of First Allied and $32.0 million in bank indebtedness of First Allied, which we refer to as the First Allied indebtedness, outstanding immediately following consummation of the merger.

To finance part of the cash merger consideration paid pursuant to the original First Allied merger agreement, $40.0 million was borrowed by RCAP Holdings from Bank of America, which we refer to as the Original FA Acquisition indebtedness, which was secured by a pledge of substantially all the assets and equity interests owned by RCAP Holdings (including shares of RCAP Class A common stock and RCAP Class B common stock held by RCAP Holdings), American Realty Capital and certain subsidiaries of American Realty Capital.

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On April 3, 2014, RCAP entered into the First Allied contribution agreement pursuant to which RCAP Holdings will contribute all its equity interests in First Allied to RCAP. As consideration for this contribution, 11,264,929 shares of RCAP Class A common stock are issuable to RCAP Holdings. The number of shares to be issued as consideration was determined based on a value of $207.5 million for the equity of First Allied and the volume weighted average price, or VWAP, of RCAP Class A common stock on January 15, 2014, the day prior to the announcement of the Cetera merger agreement. The value of $207.5 million for the equity of First Allied established by the RCAP board of directors in January 2014 was determined as the effective cost to RCAP Holdings for First Allied of $177.0 million (consisting of $145.0 million in merger consideration (including the First Allied notes) paid by RCAP Holdings to the former owners of First Allied and $32.0 million in bank indebtedness of First Allied outstanding immediately following consummation of the merger), minus indebtedness (net of cash) of First Allied of $7.0 million plus a carrying cost of $37.5 million.

The value of the shares of Class A common stock to be issued by us as consideration in the First Allied acquisition is $370.6 million, based on the closing price for RCAP Class A common stock of $32.90 per share on May 9, 2014. Accordingly, the effective cost to RCAP for the First Allied acquisition will be $404.4 million (including $33.8 million of First Allied indebtedness and assuming a closing price for RCAP Class A common stock of $32.90 per share on the date of consummation of the contribution), which is $227.4 million more than the effective cost to RCAP Holdings for First Allied in September 2013 under the terms of the original First Allied merger agreement. In addition, immediately following consummation of the contribution, $33.8 million of First Allied indebtedness (which RCAP expects will be repaid with the proceeds from RCAP’s proposed public offering and the concurrent private offering, provided the First Allied acquisition has occurred) is expected to be outstanding. The First Allied indebtedness is on the same terms now as it was immediately following the closing of the acquisition of First Allied by RCAP Holdings under the original First Allied merger agreement. Under the terms of the bank facilities RCAP entered into in connection with the closing of the Cetera financings on April 29, 2014, it is an event of default if the outstanding First Allied indebtedness is not repaid by July 28, 2014. Following repayment of the outstanding First Allied indebtedness, RCAP’s obligations under the bank facilities also will be guaranteed, subject to certain exceptions, by First Allied and each of First Allied’s direct or indirect domestic subsidiaries that are not SEC-registered broker-dealers.

The Hatteras Acquisition.   Hatteras is a private company that is the sponsor of, investment advisor to and distributor for the Hatteras Funds complex, a family of alternative investment funds registered as investment companies with the SEC. Hatteras had approximately $2.7 billion in assets under management and a product portfolio that includes seven open-end mutual funds and a closed-end fund as of March 31, 2014.

On October 1, 2013, RCAP entered into the Hatteras purchase agreement with Hatteras. Pursuant to the terms and subject to the conditions set forth in the Hatteras purchase agreement, a wholly owned subsidiary of RCAP will purchase substantially all the assets related to the business and operations of Hatteras and assume certain liabilities of Hatteras.

RCAP will pay aggregate estimated consideration of $40.0 million in cash, subject to certain adjustments, and earn-out payments in 2016 and 2018 based on Hatteras’ pre-tax net income.

The J.P. Turner Acquisition .  J.P. Turner is a retail broker-dealer and investment adviser with approximately 323 financial advisors in 176 branch offices across the United States with a concentration in the southeast, $4.3 billion in assets under administration and approximately 50,000 clients as of March 31, 2014. J.P. Turner had approximately $257,000 in gross revenue per financial advisor for the year ended December 31, 2013. J.P. Turner also offers a variety of other investment services, including investment banking.

On January 16, 2014, RCAP entered into the J.P. Turner purchase agreement with J.P. Turner. Pursuant to the terms and subject to the conditions set forth in the J.P. Turner purchase agreement, a wholly owned subsidiary of RCAP will purchase all outstanding membership interests in J.P. Turner held by the sellers.

RCAP will pay aggregate estimated consideration of $27.0 million, which will be 70% in cash and 30% in shares of RCAP Class A common stock, subject to certain adjustments and earn-outs.

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The Summit Acquisition .  Summit is a public company with its common stock traded on the over-the- counter market under the symbol “SFNS” that had approximately 324 financial advisors providing securities brokerage and investment retail advice in 238 branch office across the United States with concentration in the southeast, $9.4 billion in assets under administration and approximately 50,000 clients as of March 31, 2014. Summit had approximately $284,000 in gross revenue per financial advisor for the year ended December 31, 2013.

On November 16, 2013, RCAP entered into the Summit merger agreement with Summit. Pursuant to the terms and subject to the conditions set forth in the Summit merger agreement, as amended, a wholly owned subsidiary of RCAP will merge with and into Summit with Summit surviving the merger as a subsidiary of RCAP.

RCAP will pay aggregate estimated consideration of $49.0 million in the Summit acquisition, of which approximately 80% will be in cash and approximately 20% will be in shares of RCAP Class A common stock.

The Exchange Transactions .  On February 11, 2014, RCAP engaged in a series of transactions, which we refer to as the exchange transactions, to restructure its capital structure and the ownership structure of the operating subsidiaries. The exchange transactions were also part of RCAP’s plan to expand, diversify and grow its business.

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RCAP’s Structure .  The diagram below depicts RCAP’s current organizational structure.

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The diagram below depicts RCAP’s organizational structure after giving effect to the completion of the recent and pending acquisitions.

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For additional information about the pending acquisitions and the exchange transactions, see “RCS Capital Corporation — The Recent and Pending Acquisitions” beginning on page 166 and “RCS Capital Corporation — Our Structure and the Exchange Transactions” beginning on page 178 .

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Investors Capital Holdings, Ltd.

Incorporated in 1995, Investors Capital Holdings, Ltd., or “ICH,” a Delaware corporation, is a financial services holding company that operates primarily through its wholly owned broker-dealer and registered investment advisor subsidiary, Investors Capital Corporation, or “ICC,” a Massachusetts corporation established in July 1992. ICC provides to investors (i) broker-dealer services primarily in support of trading and investment in securities such as corporate stocks and bonds, U.S. government securities, municipal bonds, mutual funds, variable annuities, alternative investments and variable life insurance, including provision of market information, internet trading and portfolio tracking facilities and records management, and (ii) investment advisory services, including asset allocation, management, and portfolio rebalancing conducting as dually-registered business as Investors Capital Advisory Services, or “ICA.” Additionally, ICH operates two other wholly owned subsidiaries; ICC Insurance Agency, Inc., a life insurance service provider established in Massachusetts in January 1990, and Advisor Direct, Incorporated, a (k)(1) broker-dealer established in Massachusetts in June 2006, currently in shell form only. Lastly, ICH Securities was established to hold cash to maximize income tax rates applied at the Massachusetts state level.

ICH’s principal executive offices are located at Six Kimball Lane, Suite 150, Lynnfield, MA 01940, and its telephone number is (781) 593-8565.

For additional information about ICH, see “Investor Capital Holdings, Ltd.” beginning on page 246 .

Merger Sub (see page 265 )

Zoe Acquisition, LLC, or “Merger Sub,” a Delaware corporation and a wholly owned subsidiary of RCAP, was formed on October 15, 2013 by RCAP solely for the purpose of entering into the merger agreement and completing the transactions contemplated by the merger agreement. Merger Sub has not carried on any activities to date, and does not expect to carry on any activities, except for activities incidental to its formation and activities undertaken in connection with the transactions contemplated by the merger agreement.

Upon the completion of the merger, ICH will cease to exist and Merger Sub will continue as the surviving entity in the merger and as a subsidiary of RCAP under the name “Investors Capital Holdings, LLC.”

Merger Sub’s principal executive offices are located at 405 Park Avenue, 15 ^th Floor, New York, New York 10022, and its telephone number is (866) 904-2988.

The Special Meeting; Stockholders Entitled to Vote; Vote Required (see page 84 )

Meeting:   A special meeting of ICH stockholders, referred to as the “special meeting,” will be held at the Sheraton Colonial Boston North Hotel & Conference Center, One Audubon Rd., Wakefield, Massachusetts, on July 8, 2014, commencing at 10:00 a.m. local time, for the following purposes:

Record Date.   Only ICH stockholders of record at the close of business on May 9, 2014 will be entitled to receive notice of and to vote at the special meeting. On the record date, there were 7,238,309 shares of ICH common stock outstanding and entitled to vote at the special meeting, held by approximately 216 holders of record. Each share of ICH common stock issued and outstanding on the record date is entitled to one vote on each proposal to be voted upon at the special meeting.

Required Vote.   To approve the proposal to adopt the merger agreement and approve the transactions contemplated by the merger agreement, holders of at least a majority of the outstanding shares of ICH

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common stock entitled to vote at the special meeting must vote in favor of such proposal. ICH cannot complete the merger unless its stockholders approve the proposal to adopt the merger agreement. Because approval is based on the affirmative vote of at least a majority of the outstanding shares of ICH common stock entitled to vote at the special meeting, the failure of any ICH stockholder to vote (i.e., to submit a proxy or vote in person at the special meeting) and any abstention from voting by any ICH stockholder will have the same effect as a vote against this proposal. Likewise, broker non-votes will have the same effect as voting against the proposal to adopt the merger agreement. Broker non-votes occur when a beneficial owner holding shares in “street name” does not instruct the broker, bank, trustee or other nominee that is the record owner of such stockholder’s shares on how to vote those shares on a “non-routine” proposal, with respect to which the broker, bank, trustee or other nominee does not have discretionary voting power. In this case, brokers, banks and other nominees do not have discretionary authority to vote on the proposal to adopt the merger agreement because this proposal is “non-routine.” Consequently, the failure of a beneficial owner to provide voting instructions to its broker, bank, trustee or other nominee will have the same effect as a vote against adoption of the merger agreement.

The presence at the special meeting, in person or by proxy, of the holders of a majority of the shares of ICH common stock outstanding and entitled to vote at the special meeting constitutes a quorum for purposes of the special meeting. Assuming a quorum is present, approval of the proposal to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to ICH’s named executive officers in connection with the merger requires the affirmative vote of a majority of the shares of ICH common stock present in person or represented by proxy at the special meeting and entitled to vote on the proposal. Similarly, but regardless of whether a quorum is present, approval of the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to adopt the merger agreement, requires the affirmative vote of holders of a majority of the shares of ICH common stock present in person or represented by proxy at the special meeting and entitled to vote on the proposal. Approval of these proposals is based on the number of shares present — not the number of outstanding shares. Abstentions from voting will therefore have the same effect as a vote against these proposals. Brokers, banks, trustees and other nominees do not have discretionary authority to vote on these “non-routine” proposals and therefore will not be able to vote on these proposals absent instructions from the beneficial owner; however, “broker non-votes” and failures to vote (i.e., to submit a proxy or vote in person at the special meeting) by any ICH stockholder will have no effect on the vote to approve on a non-binding advisory basis the compensation that may be paid or become payable to ICH’s named executive officers in connection with the merger or the vote to approve the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to adopt the merger agreement (except, in each case, for reducing the number of affirmative votes required to achieve the requisite majority by reducing the total number of shares from which that majority is calculated and, with respect to failures to vote, raising the number of stockholders required to attend the special meeting for a quorum to be present, where required).

Stock Ownership of and Voting by ICH’s Directors and Executive Officers.   At the close of business on the record date for the special meeting, ICH’s directors and executive officers and their affiliates beneficially owned and had the right to vote 1,326,552 shares of ICH common stock (including 762,624 shares subject to the voting agreement described below) at the special meeting, which represent approximately 18.33% of the ICH shares entitled to vote at the special meeting. It is expected that ICH’s directors and executive officers will vote their shares “FOR” the adoption of the merger agreement, “FOR” the advisory proposal to approve the compensation payable to ICH’s named executive officers in connection with the merger and “FOR” the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to adopt the merger agreement and approve the merger.

The Merger (see page 91 )

Upon the terms and subject to the conditions of the merger agreement, ICH will merge with and into Merger Sub, a wholly owned subsidiary of RCAP, and Merger Sub will survive the merger and continue as a subsidiary of RCAP under the name “Investors Capital Holdings, LLC.” We refer to this transaction as the “merger.” As a result of the merger, ICH common stock will cease to be publicly traded.

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The Merger Agreement (see pages 91 and 117 )

A copy of the merger agreement, as amended, is attached as Annex A to this proxy statement/prospectus. You should read the entire merger agreement carefully because it is the principal document governing the merger.

What You Will Receive in the Merger (see page 117 )

If the merger agreement is adopted by the stockholders of ICH and the merger is subsequently completed, at the effective time of the merger, each share of ICH common stock outstanding immediately prior to such time (including shares of restricted ICH common stock and shares issued upon exercise of options to purchase shares of ICH common stock, but excluding shares held by ICH, any wholly owned subsidiary of ICH, RCAP or any wholly owned subsidiary of RCAP) will be cancelled and converted into the right to receive, at the election of the holder thereof and subject to the limitation on the amount of cash consideration payable in the merger described below, (i) $7.25 in cash, which we refer to sometimes as the “cash consideration,” or (ii) a number of shares of RCAP Class A common stock equal to the quotient of $7.25 divided by the volume weighted average trading price of a share of RCAP Class A common stock on the New York Stock Exchange, or NYSE, as reported by Bloomberg L.P. or other available source mutually agreed by ICH and RCAP, for the five consecutive trading days immediately preceding the closing date of the merger (plus cash in lieu of fractional shares), which we refer to sometimes as the “stock consideration.” Stockholders of ICH who own more than one share of ICH common stock may elect, subject to the same limitation, to receive a combination of cash consideration and stock consideration with respect to their ICH shares. Cash will be paid in lieu of any fractional shares of RCAP Class A common stock (valued based on the same formula). ICH stockholders who fail to make a valid election will automatically receive stock consideration for their ICH shares.

Under the merger agreement, in no event may the aggregate cash consideration payable in the merger, together with cash paid in lieu of fractional shares, exceed 60% of the total merger consideration. If the aggregate elections for payment in cash would cause the aggregate merger consideration payable in cash, together with cash paid in lieu of fractional shares, to exceed such 60% threshold, the amount of cash consideration paid will be reduced on a pro rata basis such that the 60% threshold is not exceeded, and any excess consideration will be paid in the form of RCAP Class A common stock. This means that ICH stockholders who elect to receive any portion of the merger consideration in cash may receive RCAP Class A common stock in lieu of some of the cash consideration they elected to receive.

An election form, which will separately be mailed to ICH stockholders, will allow ICH stockholders, subject to the foregoing, to indicate prior to the election deadline the form of merger consideration they wish to receive with respect to their ICH shares if the merger is consummated.

Treatment of Restricted Stock and Options (see page 118 )

At the effective time of the merger, each restricted share of ICH common stock that is outstanding immediately prior to such time will become vested, free of restriction and will be cancelled and converted into the right to receive the applicable per share merger consideration, less any applicable withholding taxes. As a condition to RCAP’s obligation to complete the merger, all outstanding options to purchase shares of ICH common stock must be exercised before the closing of the merger. Prior to their exercise on May 9, 2014, all of such options were owned by Timothy B. Murphy, ICH’s President and Chief Executive Officer, were vested and could be exercised at any time. On May 9, 2014, Mr. Murphy exercised all of his options to purchase 150,000 shares of ICH common stock.

Voting Agreement (see page 138 )

Concurrently with the execution of the merger agreement, Timothy B. Murphy, ICH’s President and Chief Executive Officer, entered into a voting agreement with RCAP (with respect to 762,624 shares of ICH common stock, representing approximately 10.54% of ICH common stock outstanding on the record date), pursuant to which Mr. Murphy (where applicable, acting solely in his capacity as a stockholder, and not as an officer or director, of ICH), among other things, has agreed to vote his shares of ICH common stock in favor of the proposal to adopt the merger agreement and approve the transactions contemplated by the merger agreement and against any alternative transaction.

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A copy of the voting agreement is attached to this proxy statement/prospectus as Annex B .

Recommendation of the ICH Board of Directors and Its Reasons for the Merger (see page 98 )

The special committee, established by resolution of the ICH board of directors on September 16, 2013, is a committee consisting solely of the independent directors of ICH that was established, in light of the significance of the potential transaction with RCAP, to pursue and facilitate negotiations with RCAP, evaluate the terms of a potential acquisition of ICH with RCAP and to make a recommendation to the ICH board of directors with respect to any such transaction. The special committee consists of William J. Atherton, as chairman, Blaise Aguirre, Rob Martin and Robert Mazzarella.

Acting upon the unanimous recommendation of the special committee, the ICH board of directors (i) has unanimously determined that the merger agreement and the merger are advisable, fair to and in the best interests of ICH and its stockholders, (ii) has unanimously approved the merger agreement, the merger and the other transactions contemplated by the merger agreement and (iii) unanimously recommends that ICH stockholders vote “FOR” the approval of the proposal to adopt the merger agreement and approve the transactions contemplated by the merger agreement, “FOR” the approval of the proposal to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to ICH’s named executive officers in connection with the merger, and “FOR” the approval of the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to adopt the merger agreement and approve the transactions contemplated by the merger agreement.

In making their respective recommendations, the special committee and the ICH board of directors duly considered a number of factors. These considerations are described in the section entitled “The Merger —  ICH’s Reasons for the Merger and Recommendation of the ICH Board of Directors” starting on page 98 .

Opinion of Financial Advisor to the Special Committee (see page 104 )

Cassel Salpeter & Co., LLC, or “Cassel Salpeter,” an investment banking firm, rendered its oral opinion to the special committee on October 27, 2013 (which was subsequently confirmed in writing by delivery of Cassel Salpeter’s written opinion dated the same date) as to, as of October 27, 2013, the fairness, from a financial point of view, to the holders of ICH common stock of the aggregate merger consideration to be received by such holders in the merger pursuant to the merger agreement.

The opinion was provided for the use and benefit of the special committee in connection with its consideration of the merger and only addressed, as of the date of the opinion, the fairness, from a financial point of view, to the holders of ICH common stock of the aggregate merger consideration to be received by such holders in the merger pursuant to the merger agreement and did not address any other aspect or implication of the merger or the merger agreement. The summary of Cassel Salpeter’s opinion in this proxy statement/prospectus is qualified in its entirety by reference to the full text of the written opinion, which is included as Annex C to this proxy statement/prospectus and sets forth the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Cassel Salpeter in preparing its opinion. However, neither Cassel Salpeter’s written opinion nor the summary of its opinion and the related analyses set forth in this proxy statement/prospectus are intended to be, and do not constitute, advice or a recommendation to any stockholder as to how such stockholder should vote or act with respect to any matter relating to the merger, including, without limitation, whether to elect to receive cash or shares of RCAP Class A common stock as merger consideration.

Interests of ICH’s Directors and Executive Officers in the Merger (see page 112 )

In considering the recommendations of the ICH board of directors in favor of the proposal to adopt the merger agreement and approve the transactions contemplated by the merger agreement, you should be aware that some of the directors and executive officers of ICH have interests in the merger that are different from, or are in addition to, the interests of ICH stockholders. These interests include the following:

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The special committee, in reaching its decision to recommend the approval of the merger agreement and the merger to the ICH board of directors, and the ICH board of directors, in reaching its decision to approve the merger agreement, the merger and the other transactions contemplated by the merger agreement, and to recommend that the ICH stockholders vote in favor of the proposal to adopt the merger agreement and to approve the transactions contemplated by the merger agreement, were aware of and considered these interests, among other matters. See the section entitled “The Merger — Interests of ICH’s Directors and Executive Officers in the Merger.”

Approval of Compensation that May be Paid or Become Payable to ICH’s Named Executive Officers in Connection with the Merger (see page 113 )

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 requires ICH to seek a non-binding advisory vote from its stockholders with respect to certain compensation that may be paid or become payable to ICH’s named executive officers in connection with the merger, as reported on the Merger-Related Compensation Table on page 114 . The ICH board of directors unanimously recommends that you vote “FOR” approval of this non-binding advisory proposal.

Approval of the proposal regarding compensation that may be paid or become payable to ICH’s named executive officers in connection with the merger requires the affirmative vote of the holders of at least a majority of the shares of ICH common stock present, in person or by proxy, at the special meeting and entitled to vote at the special meeting.

Approval of this proposal is not a condition to completion of the merger. The vote with respect to this proposal is an advisory vote and will not be binding on ICH or RCAP. Therefore, regardless of whether or not the ICH stockholders approve the compensation that may be paid or become payable to ICH’s named executive officers in connection with the merger, if the merger agreement is adopted by the stockholders and the merger is completed, such compensation will be payable, subject only to the conditions applicable to the payment thereof.

Effective Time of the Merger (see page 117 )

On the closing date of the merger, ICH, RCAP and Merger Sub will cause a certificate of merger to be filed with the Secretary of State of Delaware. The merger will become effective when the certificate of merger is so filed, unless a later date is specified in those filings. We expect the closing of the merger to occur in the second calendar quarter of 2014. However, the merger is subject to the receipt of ICH stockholder approval, certain regulatory and self-regulatory clearances and the satisfaction or waiver of the other conditions set forth in the merger agreement. In addition, the parties have the right to terminate the merger agreement if those conditions have not been satisfied or waived on or prior to July 31, 2014. It is possible that factors outside the

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control of ICH and RCAP could result in the merger being completed later than the second calendar quarter of 2014 or not at all. There can be no assurances as to when or if the merger will close.

Elections and Election Forms (see page 119 )

An election form will be separately mailed to you on or around the date of this proxy statement/prospectus. The election form allows ICH stockholders to indicate prior to the election deadline the form of merger consideration they wish to receive with respect to their ICH shares if the merger is consummated. ICH stockholders who fail to make a valid election will automatically receive RCAP Class A common stock. Whether or not you plan to attend the special meeting in person, please use the election form that will separately be mailed to you to indicate your choice of consideration and promptly sign and mail it in the enclosed pre-addressed, postage-paid envelope so that it is received prior to the election deadline.

Surrender of ICH Stock Certificates (see page 120 )

As soon as practicable after the effective time of the merger, the exchange agent selected by RCAP, Computershare, will mail a letter of transmittal and instructions to you for use in surrendering your shares of ICH common stock, including any stock certificates evidencing such shares, in exchange for the merger consideration. When you properly surrender your certificates or provide other satisfactory evidence of ownership, and return the letter of transmittal duly executed and completed in accordance with its instructions, Computershare will promptly cancel the surrendered stock certificates and deliver to you evidence of the book-entry of the number of shares of RCAP Class A common stock and/or cash to which you are entitled under the merger agreement. Please do not send any stock certificates until you receive the letter of transmittal and instructions (unless you are required to do so in connection with your election).

Accounting Treatment (see page 115 )

There were 28,317,237 shares of RCAP Class A common stock outstanding as of May 9, 2014, and RCAP will be the acquirer for accounting purposes. RCAP intends to account for the merger as an acquisition using the acquisition method of accounting under generally accepted accounting principles. ICH’s operating results will be included with RCAP’s beginning at the effective time of the merger.

United States Federal Income Tax Consequences (see page 139 )

It is intended that the merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code and the completion of the merger is conditioned on the receipt by each of RCAP and ICH of an opinion from its counsel to the effect that the merger will qualify as a reorganization. In addition, in connection with the filing of the registration statement of which this proxy statement/prospectus is a part, each of RCAP and ICH has received an opinion from its counsel to the same effect as the opinions described above. Accordingly, and on the basis of the opinions delivered in connection herewith, U.S. Stockholders (as defined in the section entitled “Material United States Federal Income Tax Consequences of the Merger” of this proxy statement/prospectus) holding ICH common stock generally will not recognize gain or loss for U.S. federal income tax purposes upon the receipt of solely RCAP Class A common stock in exchange for ICH common stock in connection with the merger, except with respect to cash received in lieu of fractional shares of RCAP Class A common stock. U.S. Stockholders holding ICH common stock generally will recognize gain or loss if they exchange their shares of ICH common stock solely for cash in the merger. Generally, U.S. Stockholders holding ICH common stock will recognize gain (if any), but not loss, if they exchange their shares of ICH common stock for a combination of RCAP Class A common stock and cash, but their taxable gain in that case will not exceed the cash they receive in the merger. See “Material United States Federal Income Tax Consequences of the Merger” beginning on page 139 for a discussion of material U.S. federal income tax consequences of the merger. The tax consequences of the merger to you will depend on the facts of your own situation. You should consult your own tax advisor for a full understanding of the U.S. federal income tax consequences of the merger to you, as well as tax consequences arising under the laws of any state, local or non-U.S. taxing jurisdiction.

Listing of RCAP Class A Common Stock; Delisting and Deregistration of ICH Common Stock (see pages 115 and 131 )

RCAP Class A common stock is currently listed on the NYSE under the ticker symbol “RCAP.” RCAP will apply to list the shares of RCAP Class A common stock to be issued in the merger on the NYSE. We

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expect that, when the merger is completed, those shares will be listed on the NYSE. ICH common stock is currently listed on the NYSE MKT under the ticker symbol “ICH.” If the merger is completed, ICH common stock will cease to be listed on the NYSE MKT and will be deregistered under the Exchange Act.

No Appraisal Rights (see page 114 )

Appraisal rights are statutory rights that, under certain circumstances, enable stockholders to dissent from an extraordinary transaction, such as a significant business combination, and to demand that the corporation pay the fair value for their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to stockholders in connection with the extraordinary transaction. Under Delaware law, holders of ICH common stock are not entitled to appraisal rights in connection with the merger. For more information, see “The Merger — No Appraisal Rights.”

Conditions to the Merger (see page 133 )

The obligations of RCAP and ICH to effect the merger are subject to the satisfaction or waiver (where permissible) of the following conditions:

In addition, the obligations of ICH to effect the merger are subject to the satisfaction or waiver (where permissible), of the following additional conditions:

In addition, the obligations of RCAP and Merger Sub to effect the merger are subject to the satisfaction, or waiver (where permissible), of the following additional conditions:

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Regulatory Approvals (see page 115 )

The following is a summary of the material regulatory and self-regulatory requirements for completion of the merger. There can be no guarantee if and when any of the consents or approvals required for the merger

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will be obtained or as to the conditions that such consents and approvals may contain. For further information, see “Risk Factors” beginning on page 42 .

Registration of RCAP Shares .  RCAP must comply with applicable securities laws in connection with the issuance of shares of RCAP Class A common stock to ICH stockholders in the merger and the filing with the SEC of the registration statement of which this proxy statement/prospectus forms a part.

FINRA’s NASD Rule 1017.   A subsidiary of ICH that is registered with the SEC as a broker-dealer is required to obtain the written approval of FINRA under NASD Rule 1017 in connection with the merger. An application to obtain such approval was filed on December 16, 2013.

No Solicitation by ICH of Alternative Acquisition Proposals (see page 126 )

Under the merger agreement, ICH has agreed that it will not, and will cause its subsidiaries and use reasonable best efforts to cause its and its subsidiaries’ officers, directors, managers, employees, consultants, attorneys, accountants, investment bankers and financial advisors, agents and other representatives not to, directly or indirectly:

Notwithstanding these restrictions, the merger agreement provides that, under specified circumstances, at any time prior to ICH stockholders voting in favor of the proposal to adopt the merger agreement, ICH may furnish non-public information, with respect to it and its subsidiaries to, and engage in discussions or negotiations with, any third party that makes an unsolicited bona fide written alternative acquisition proposal, if ICH enters into an acceptable confidentiality agreement with such party and the ICH board of directors (after consultation with its financial advisors and outside legal counsel) determines in good faith that such proposal constitutes or is reasonably likely to result in a “superior proposal.”

ICH has also agreed in the merger agreement that it will promptly, and in any event within 24 hours, (i) notify RCAP after receipt of any alternative acquisition proposal, any request for information or inquiry with regard to any alternative acquisition proposal, and indicate the material terms and the identity of the person making any such alternative acquisition proposal, request or inquiry, and (ii) notify RCAP if it enters into discussions or negotiations concerning any acquisition proposal, and keep RCAP informed of the status and material terms of any such proposals, offers, discussions or negotiations on a current basis, including by providing a copy of all material documentation or correspondence relating thereto.

Under the merger agreement, the ICH board of directors (i) may not (and may not publicly propose to) withhold, withdraw, modify or qualify in a manner adverse to RCAP or Merger Sub its recommendation that ICH stockholders approve the proposal to adopt the merger agreement, (ii) may not (and may not publicly propose to) approve, adopt or recommend any alternative acquisition proposal, (iii) may not fail to include its recommendation that ICH stockholders approve the proposal to adopt the merger agreement in this proxy statement/prospectus, (iv) may not fail to publicly recommend against any alternative acquisition proposal or to reaffirm its recommendation that ICH stockholders approve the proposal to adopt the merger agreement in each case within 10 days of a request of RCAP to do so and (v) may not approve, adopt or recommend an alternative acquisition proposal, or cause or permit ICH to enter into any “alternative acquisition agreement.”

However, the ICH board of directors may, under certain specified circumstances, at any time prior to ICH stockholders voting in favor of the proposal to adopt the merger agreement, withdraw its recommendation that

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ICH stockholders vote in favor of such proposal and approve, adopt or recommend that ICH stockholders approve an alternative acquisition proposal, if the ICH board of directors (i) has received an unsolicited bona fide alternative acquisition proposal that it determines in good faith, after consultation with outside legal counsel and financial advisors, constitutes a superior proposal (taking into account any adjustments offered by RCAP as contemplated by the merger agreement) and (ii) determines in good faith, after consultation with outside legal counsel, that failure to take such action would be inconsistent with the directors’ duties under applicable law. In these circumstances, the ICH board of directors may also terminate the merger agreement and enter into an alternative acquisition agreement if, concurrently with such termination, pays to RCAP a termination fee of $2,500,000 and expenses in the amount of $500,000.

The merger agreement requires ICH and its subsidiaries and their respective officers, directors, employees and representatives to (i) cease and cause to be terminated any discussions or negotiations with any third party conducted prior to the execution of the merger agreement regarding any alternative acquisition proposal, (ii) take action to enforce any confidentiality provisions to or of which ICH or one of its subsidiaries a party or beneficiary and (iii) request the return or destruction of all confidential information previously provided to any third parties in connection with the solicitation or an alternative acquisition proposal.

Termination of Merger Agreement (see page 135 )

The merger agreement may be terminated at any time before completion of the merger in any of the following ways:

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Expenses and Termination Fees (see page 136 )

Upon termination of the merger agreement under certain circumstances, ICH must pay RCAP termination fee of $2,500,000 and/or reimburse RCAP for $500,000 in expenses. For more information, see “The Merger Agreement — Termination Fees and Expenses.”

Except for those termination fees and/or expenses payable by ICH and for fees and expenses related to the printing and filing of the registration statement of which this proxy statement/prospectus forms a part, the printing, filing and distribution of this proxy statement/prospectus and any application to FINRA pursuant to NASD Rule 1017 (in each case, other than attorneys’ and accountants’ fees), which will be shared equally by ICH and RCAP, all fees, costs and expenses incurred by RCAP and ICH in connection with the merger agreement and the merger will be paid by the party incurring those fees, costs or expenses, whether or not the merger is completed.

Comparison of the Rights of Holders of RCAP Class A Common Stock and ICH Common Stock (see page 266 )

As a result of the completion of the merger, holders of ICH common stock will become holders of RCAP Class A common stock. Each of RCAP and ICH is a Delaware corporation governed by the General Corporation Law of the State of Delaware, or the “DGCL.” However, ICH stockholders receiving RCAP Class A common stock as merger consideration will have different rights once they become stockholders of RCAP due to differences between the governing corporate documents of ICH and the governing corporate documents of RCAP. These differences are described in detail under the section titled “Comparison of Certain Rights of Stockholders of RCAP and ICH” beginning on page 266 .

Selected Historical and Pro Forma Consolidated Financial Data

Presented below is the selected consolidated financial data of RCAP and its operating subsidiaries as of and for the periods indicated. The following selected financial data of RCAP and its operating subsidiaries should be read in conjunction with, and are qualified by reference to, “RCS Capital Corporation — Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and notes thereto included elsewhere in this proxy statement/prospectus. The selected operating data for the years ended December 31, 2013, 2012 and 2011 and the selected statement of financial condition data as of December 31, 2013 and 2012 have been derived from the audited financial statements of RCAP included elsewhere in this proxy statement/prospectus. The selected operating data for the years ended December 31, 2010 and 2009, and the selected statement of financial condition data as of December 31, 2011, 2010 and 2009, have been derived from audited financial statements of Realty Capital Securities that are not included in this proxy statement/prospectus. For periods prior to and including December 31, 2012, we provide data solely for Realty Capital Securities because it was the only one of the operating subsidiaries that was in operation as of and prior to December 31, 2012.

		Historical
		Year Ended December 31,
($ in thousands)		2013				2012				2011				2010				2009
Selected Operating Data:
Revenue		$	886,495			$	287,497			$	174,729			$	114,131			$	28,219

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		Historical
		Year Ended December 31,
($ in thousands)		2013				2012				2011				2010				2009
Operating expenses			785,943				280,085				170,987				116,513				32,230
Provision for income taxes (1)			2,202				—				—				—				—
Net income (loss)		$	98,350			$	7,412			$	3,742			$	(2,382	)		$	(4,011	)
Statement of Financial Condition Data:
Cash		$	45,744			$	12,683			$	3,941			$	4,157			$	1,730
Total assets			111,127				16,211				5,406				7,491				5,089
Total liabilities			31,601				10,485				2,538				4,324				1,763
Total stockholders’ equity			44,856				5,726				2,868				3,167				3,326
Non-controlling interest			34,670				—				—				—				—
Other Data:
Direct investment equity capital raised (2)		$	8,629,800			$	2,952,061			$	1,765,125			$	1,147,912			$	284,438
Basic and diluted earnings per share of Class A common stock			1.04				—				—				—				—
Cash dividends declared per share of Class A common stock			0.54				—				—				—				—

Presented below is the selected consolidated financial data of RCAP on a pro forma basis for the merger, the recent and pending acquisitions, including the merger, the proposed public offering and the concurrent private offering as of and for the periods indicated.

		Pro Forma for the Merger				Pro Forma for the Recent and Pending Acquisitions and Offerings
($ in thousands)		Year Ended December 31, 2013				Year Ended December 31, 2013
		(unaudited)				(unaudited)
Selected Operating Data:
Revenue		$	2,078,262			$	2,576,709
Operating expenses			2,099,559				2,595,860
Provision for income taxes			(46,137	)			—
Net income (loss)		$	24,840			$	(19,151	)
Statement of Financial Condition Data:
Cash		$	(77,732	)		$	244,185
Total assets			1,694,598				2,355,962
Total liabilities			1,356,251				1,532,327
Total equity			338,347				823,635

Unaudited Comparative Per Share Data

The following table shows, for the year ended December 31, 2013, historical and pro forma equivalent per share data for ICH common stock and historical and pro forma combined per share data for RCAP

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Class A common stock. The information in the table is derived from each of ICH and RCAP’s respective historical consolidated financial statements and the unaudited pro forma consolidated financial information included elsewhere herein.

The pro forma equivalent information shows the effect of the merger from the perspective of an owner of ICH common stock. These computations exclude any potential benefit to ICH stockholders from receiving any amount of cash as a component of the merger consideration.

The pro forma combined data below is presented for illustrative purposes only. The pro forma adjustments to the statement of earnings data are based on the assumption that the merger was completed on January 1, 2013, and the pro forma adjustments to the balance sheet data are based on the assumption that the merger was completed on December 31, 2013.

Both companies’ actual historical financial condition and results of operations may have been different had the companies always been combined. You should not rely on this information as being indicative of the historical financial condition and results of operations that would have actually been achieved by either RCAP or ICH or of the future results of RCAP or its subsidiaries after the completion of the merger.

		ICH Common Stock				RCAP Common Stock
		Historical				Historical				Pro Forma for the merger
Income from Continuing Operations Per Share
Basic		$	(0.25	)		$	1.04			$	(24.65	)
Diluted		$	(0.25	)		$	1.04			$	(24.65	)
Cash Dividends Declared Per Share		$	—			$	0.54			$	—
Book Value Per Share		$	0.99			$	17.94			$	83.34

Comparative Market Value of Common Stock

Market Price Data

This table sets forth, for the periods indicated, the high and low sales prices per share of ICH common stock and RCAP Class A common stock as reported by the NYSE MKT (which, prior to May 14, 2012, was known as the American Stock Exchange) and the NYSE, respectively.

		Price Per Share of Common Stock
		ICH								RCAP
		High				Low				High				Low
2011
First Quarter		$	6.50			$	4.40				n/a				n/a
Second Quarter		$	6.40			$	4.22				n/a				n/a
Third Quarter		$	5.20			$	3.24				n/a				n/a
Fourth Quarter		$	4.25			$	3.24				n/a				n/a
2012
First Quarter		$	4.25			$	4.00				n/a				n/a
Second Quarter		$	4.24			$	3.76				n/a				n/a
Third Quarter		$	4.25			$	3.50				n/a				n/a
Fourth Quarter		$	4.01			$	3.46				n/a				n/a
2013
First Quarter		$	5.13			$	3.11				n/a				n/a
Second Quarter (1)		$	5.84			$	4.05			$	19.78			$	16.51
Third Quarter		$	7.30			$	5.08			$	17.88			$	15.00
Fourth Quarter		$	7.25			$	5.43			$	18.66			$	15.51

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		Price Per Share of Common Stock
		ICH								RCAP
		High				Low				High				Low
2014
First Quarter		$	7.29			$	6.64			$	39.30			$	17.42
Second Quarter (2)		$	7.17			$	6.77			$	39.98			$	30.02

Recent Closing Prices

The following table sets forth closing per share prices for RCAP Class A common stock and ICH common stock as reported on the NYSE or the NYSE MKT, as applicable, on October 1, 2013, the last full trading day prior to the public announcement that the parties had entered into a letter of intent relating to the merger, and May 9, 2014, the latest practicable date before the date of this proxy statement/prospectus.

		RCAP Common Stock				ICH Common Stock
October 1, 2013		$	17.31			$	5.43
May 9, 2014		$	32.90			$	7.13

As of May 9, 2014, there were four stockholder of record of RCAP Class A common stock (not including the number of persons or entities holding stock in nominee or street name through various brokerage firms). Following the merger, RCAP Class A common stock will continue to be listed on the NYSE. RCAP has agreed to use its reasonable best efforts to cause the shares of RCAP Class A common stock to be issued to ICH stockholders pursuant to the merger agreement to be approved for listing on the NYSE prior to the effective time of the merger, subject to official notice of issuance. Such listing is also a condition to the parties’ obligation to consummate the merger.

As of May 9, 2014, there were approximately 216 stockholders of record of ICH common stock (not including the number of persons or entities holding stock in nominee or street name through various brokerage firms). If the merger is completed, shares of ICH common stock will be deregistered under the Exchange Act.

The above table shows only historical comparisons. These comparisons may not provide meaningful information to ICH stockholders in determining whether to adopt the merger agreement. ICH stockholders are encouraged to obtain current market quotations for shares of RCAP Class A common stock prior to making any decision with respect to the merger. No assurance can be given concerning the market price for shares of RCAP Class A common stock before or after the date on which the merger is consummated. The market price for shares of RCAP Class A common stock will fluctuate between the date of this proxy statement/prospectus and the date on which the merger is consummated and thereafter.

For more information, see “RCS Capital Corporation — Principal Stockholders” beginning on page 238 , and “Investors Capital Holdings, Ltd. — Beneficial Ownership of ICH Common Stock by Management and Principal Stockholders of ICH” beginning on page 253 .

RCAP’s Results for the First Quarter of 2014

RCAP has not yet filed its Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, which will contain its financial statements for the quarter ended March 31, 2014. RCAP’s expectations with respect to its unaudited results for the quarter ended March 31, 2014 are based on management estimates. RCAP’s expectations with respect to the unaudited results of Cetera and First Allied for the quarter ended March 31, 2014 are based on the estimates of Cetera’s management and First Allied’s management. The estimates set forth below were prepared based on a number of assumptions, estimates and business decisions that are inherently subject to business and economic conditions, competitive uncertainties and contingencies, many of which are beyond RCAP’s control. This summary is not meant to be a comprehensive statement of the unaudited financial results of RCAP and Cetera for the quarter ended March 31, 2014, and the actual results of RCAP, Cetera and First Allied may differ from these estimates.

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RCAP’s Existing Businesses

RCAP’s expected operating results for the period indicated (dollars in thousands) are presented below.

Selected Operating Data:		Quarter Ended March 31, 2014				Quarter Ended December 31, 2013				Quarter Ended March 31, 2013
		(unaudited)				(unaudited)				(unaudited)
Revenue		$	187,205			$	214,063			$	218,631
Operating expenses			171,305				178,507				191,884
Provision for income taxes			3,244				1,576				—
Net income			12,656				33,980				26,747
Net income attributable to non-controlling interests			8,864				32,219				26,747
Net income attributable to RCS Capital Corporation			3,792				1,761				—
EBITDA (Non-GAAP) (1)			15,951				35,598				26,780
Adjusted EBITDA (Non-GAAP) (1)			34,826				40,189				26,780

		Quarter Ended March 31, 2014				Quarter Ended December 31, 2013				Quarter Ended March 31, 2013
Net income attributable to RCS Capital Corporation (GAAP)		$	3,792			$	1,761			$	—
Add back: Net income attributable to non-controlling interest			8,864				32,219				26,747
Add back: Provision for income taxes			3,244				1,576				—
Add back: Depreciation expense			51				42				33
EBITDA (Non-GAAP)		$	15,951			$	35,598			$	26,780
Add back: Non-cash equity compensation			10,213				30				—
Add back: Acquisition related expenses			6,717				4,561				—
Add back: Other non-recurring charges			1,945				—				—
Adjusted EBITDA (Non-GAAP)		$	34,826			$	40,189			$	26,780

RCAP expects that total revenues of $187.2 million for the three months ended March 31, 2014, compared to $218.6 million for the three months ended March 31, 2013. The decrease was primarily attributable to lower wholesale broker-dealer revenues, which were partially offset by a $41.8 million increase in transaction management, investment banking and transfer agent revenues.

RCAP expects that our revenues from our wholesale distribution platform will be $139.1 million for the quarter ended March 31, 2014, as compared to $211.8 million for the quarter ended March 31, 2013. RCAP expects that that our revenues from our investment banking, capital markets, transaction management services and transfer agent platforms will be $48.5 million for the quarter ended March 31, 2014, as compared to $6.8 million for the quarter ended March 31, 2013.

The decrease in our revenues from our wholesale distribution platform was primarily due to lower equity capital raised during the three months ended March 31, 2014 of $1.6 billion versus $2.4 billion for the three months ended March 31, 2013, primarily attributable to the timing of certain direct investment program offerings being completed during the first quarter, while new offerings became effective later in the quarter.

Total expenses for the three months ended March 31, 2014 were $171.3 million, compared to $191.9 million for the three months ended March 31, 2013 and $178.5 million for the three months ended December 31, 2013. Expenses for the three months ended March 31, 2014 include $6.7 million of transaction expenses related to announced mergers and acquisitions, including the $1.15 billion acquisition of Cetera,

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which closed on April 29, 2014, as well as $10.2 million of non-cash stock-based compensation. Excluding these costs, expenses for the three months ended March 31, 2014 totaled $154.4 million, a 20% decline from the three months ended March 31, 2013 and a 11% decline for the three months ended December 31, 2013. The decrease in total expenses was primarily due to lower third party and internal commissions and third party reallowance costs, which are attributable to reduced broker dealer revenues.

Cetera

Cetera’s operating results for the periods indicated (dollars in thousands) are presented below.

Selected Operating Data:		Quarter Ended March 31, 2014				Quarter Ended December 31, 2013				Quarter Ended March 31, 2013
		(unaudited)				(unaudited)				(unaudited)
Revenue		$	301,175			$	300,301			$	242,675
Operating expenses			299,500				301,225				239,507
Provision for income taxes			684				(379	)			1,249
Net income			991				(545	)			1,919
EBITDA (Non-GAAP) (1)			10,440				8,025				9,746
Adjusted EBITDA (Non-GAAP) (1)			19,276				21,096				16,429

		Quarter Ended March 31, 2014				Quarter Ended December 31, 2013				Quarter Ended March 31, 2013
Net income (GAAP)		$	991			$	(545	)		$	1,919
Add back: Provision for income taxes			684				(379	)			1,249
Add back: Depreciation and amortization expense			4,611				4,961				4,322
Add back: Interest expense			4,154				3,988				2,256
EBITDA (Non-GAAP)		$	10,440			$	8,025			$	9,746
Add back: Non-cash equity compensation			639				4,464				497
Add back: Acquisition related expenses			4,485				3,505				2,559
Add back: Change in contingent consideration			22				704				906
Add back: Other non-recurring charges			3,690				4,398				2,721
Adjusted EBITDA (Non-GAAP)		$	19,276			$	21,096			$	16,429

Revenue and operating expenses for the quarter ended March 31, 2014 as compared to the same period in 2013 were higher primarily as of result of Cetera’s acquisition of Tower Square Securities, Inc. and Walnut Street Securities, Inc. During the quarter ended March 31, 2013, Cetera had not yet acquired these businesses. Revenue from commissions was $179.0 million for the quarter ended March 31, 2014, as compared to $142.1 million for the quarter ended March 31, 2013. Revenue from advisory fees and services was $92.3 million for the quarter ended March 31, 2014, as compared to $71.5 million for the quarter ended March 31, 2013. Revenue from asset based fees was $9.8 million for the quarter ended March 31, 2014, as compared to $8.6 million for the quarter ended March 31, 2013. Revenue from transaction and other fees was $20.1 million for the quarter ended March 31, 2014, as compared to $20.5 million for the quarter ended March 31, 2013.

Revenue from commissions remained stable at $179.0 million for the quarter ended March 31, 2014, as compared to $179.1 million for the quarter ended December 31, 2013. Revenue from advisory fees and services increased $5.2 million, or 6.0%, to $92.3 million for the quarter ending March 31, 2014, as compared to $87.1 million for the quarter ended December 31, 2013. Revenue from asset based fees increased $0.6 million, or 6.5%, to $9.8 million for the quarter ending March 31, 2014, as compared to $9.2 million for

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the quarter ended December 31, 2013. Revenue from transaction and other fees decreased $4.8 million, or 19.3%, to $20.1 million for the quarter ending March 31, 2014, as compared to $24.9 million for the quarter ended December 31, 2013.

First Allied

First Allied’s operating results for the periods indicated (dollars in thousands) are presented below.

Selected Operating Data:		Quarter Ended March 31, 2014				Quarter Ended December 31, 2013				Quarter Ended March 31, 2013
		(unaudited)				(unaudited)				(unaudited)
Revenue		$	93,008			$	89,379			$	83,573
Operating expenses			93,857				90,070				82,341
Provision (benefit) for income taxes			(342	)			(436	)			684
Net income			(507	)			(256	)			548

Total revenues of $93.0 million for the quarter ended March 31, 2014 increased $3.6 million and 11.3% from the quarter ended December 31, 2013. This increase was primarily due to a $1.3 million increase from sales of alternative investments, primarily REITs, a $1.2 million increase in revenues from the sale of annuities and insurance, and a $0.6 million increase in trailing commissions from variable annuities and mutual funds as a result of an increase in the balance of those customer assets.

Operating expenses increased from $90.1 million for the quarter ended December 31, 2013 to $93.9 million for the quarter ended March 31, 2014, which is an increase of $3.8 million, or 4.2%. This increase is primarily the result of an increase in commission expense of $3.0 million related to the increase in revenues above and a $0.9 million increase in payroll and related costs.

Total revenues of $93.0 million for the quarter ended March 31, 2014 increased $9.4 million, or 4.0%, from the quarter ended March 31, 2013. This increase was primarily due to a $5.1 million increase from sales of alternative investments, primarily REITs, and a $4.1 million increase in revenues from investment advisory fees resulting from increased assets under management.

Operating expenses increased from $82.3 million for the quarter ended March 31, 2013 to $93.9 million for the quarter ended March 31, 2014, which is an increase of $11.4 million, or 14%. This increase is primarily the result of an increase in commission expense of $7.3 million related to the increase in revenues above, an increase in payroll and related costs of $1.8 million, and an increase in amortization of intangible assets in the amount of $1.5 million due to an increase in the book value of intangible assets when First Allied was acquired by RCAP Holdings on September 25, 2013.

Non-GAAP Measures

The non-GAAP measures described above have limitations as analytical tools, and you should not consider any of these measures in isolation or as a substitute for analyses of RCAP’s income or cash flows as reported under GAAP.

Some of these limitations are:

In addition, other companies in RCAP’s industry may calculate these measures differently than RCAP does, limiting their usefulness as a comparative measure. RCAP compensates for these limitations by relying primarily on RCAP’s GAAP results and using the non-GAAP measures only for supplemental purposes. Please see “Management’s Discussion and Analysis of Financial Condition and Results of

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Operations — Earnings before Interest, Taxes, Depreciation and Amortization” and RCAP’s financial statements and Cetera’s financial statements included elsewhere in this proxy statement/prospectus and the related notes thereto.

Dividend Data

Commencing in July 2103 (with respect to the second quarter of 2013), through April 2014 (with respect to the first quarter of 2014) RCAP has paid quarterly dividends in an amount equal to $0.18 per share for each quarter. At the present time, RCAP does not expect to continue paying quarterly dividends in subsequent quarters. Effective as of April 29, 2014, RCAP and its subsidiaries are prohibited, subject to limited exceptions, from paying dividends by negative covenants that are contained in agreements we entered into in connection with the Cetera financings. See “RCS Capital Corporation — The Cetera Financings.”

For more information about RCAP’s dividend policy, see “RCS Capital Corporation — Dividend Policy and Dividends.”

ICH has not declared or paid a cash dividend on its common stock since March 31, 2008.

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RISK FACTORS

In addition to the other information included in this proxy statement/prospectus, including the matters addressed under the caption “Cautionary Statement Regarding Forward-Looking Statements” and the attached Annexes, you should carefully read and consider the following risk factors in evaluating the proposals to be voted on at the special meeting. If the merger agreement is adopted and the merger is approved by ICH stockholders and all of the other conditions to the completion of the merger are satisfied or waived, holders of ICH common stock who receive shares of RCAP Class A common stock as merger consideration will become holders of RCAP Class A common stock and will be subject to the risks and uncertainties applicable to all other holders of RCAP Class A common stock.

RCAP is currently engaged in the wholesale distribution and investment banking, capital markets and transaction management services businesses through Realty Capital Securities, RCS Advisory and ANST. Following the consummation of the Cetera acquisition on April 29, 2014, RCAP also is engaged in the independent retail advice business through Cetera. During the period from October 1, 2013 to April 3, 2014, RCAP entered into agreements to acquire the other acquired businesses, including ICH, through the pending acquisitions, including the merger, which have not yet been consummated. The discussion of RCAP’s businesses that it will engage in following the completion of the recent and pending acquisitions, including the merger, assumes the consummation of the pending acquisitions, including the merger. Accordingly, references to RCAP’s independent retail advice platform, which will consist of Cetera, First Allied, ICH, J.P. Turner and Summit, and its investment management platform, which will consist of Hatteras, include the current and past operations of Cetera and the other acquired businesses which will only be owned and operated by RCAP following the consummation of the pending acquisitions, including the merger. There can be no assurance that any or all of the pending acquisitions will close.

You should read and consider the risks associated with the businesses of ICH and the other acquired businesses because these risks will relate to RCAP, as the combined company, following the completion of the merger and the other pending acquisitions.

Risks Related to the Merger

The merger is subject to conditions, including certain conditions that may not be satisfied, and may not be completed on a timely basis, or at all.

Completion of the merger is conditioned on a number of customary and other closing conditions, which include FINRA having approved an application under FINRA (NASD) Rule 1017, or Rule 1017, for a change in the indirect ownership of ICH’s broker-dealer subsidiary, the SEC having declared effective the registration statement on Form S-4 (of which this proxy statement/prospectus forms a part) registering the shares of RCAP Class A common stock to be issued in connection with the merger, the stockholders of ICH having adopted the merger agreement and approved the merger and the other closing conditions described under “The Merger Agreement — Conditions to the Merger.”

Also, either ICH or RCAP may terminate the merger agreement if the merger has not been completed by July 31, 2014.

If the merger is not completed on a timely basis, or at all, RCAP’s and ICH’s respective ongoing businesses could be adversely affected, and RCAP and ICH will be subject to a number of risks, including the following:

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Moreover, if the merger agreement is terminated and the ICH board of directors seeks another business combination, stockholders of ICH cannot be certain that ICH will be able to find a party willing to enter into an agreement on terms equivalent to or more favorable than the terms that RCAP has agreed to in the merger agreement.

If the merger, or any or all of the other pending acquisitions, is, or are, not completed on a timely basis, or at all, RCAP also will not realize any of the benefits expected from its, or their, completion. This loss of benefits, or the increase in risks, could have a material adverse effect on RCAP’s business.

RCAP may not have sufficient cash to pay the cash consideration and other costs required to complete the merger.

RCAP will be required to pay cash consideration in connection with the closing of the merger of up to approximately $31.5 million, not including costs and expenses incurred by RCAP in connection with the merger. RCAP currently believes it will have sufficient cash on hand, including cash generated from operations, to pay the cash consideration and other costs and expenses required to complete the merger. However, no assurance can be given that, at the closing of the merger, RCAP will have sufficient cash on hand to pay the cash consideration and other costs and expenses required to complete the merger. If RCAP does not have sufficient cash on hand to complete the merger, it may need additional financing in order to do so. On February 13, 2014, RCAP filed a registration statement on Form S-1 related to a proposed public offering by RCAP that is expected to provide RCAP with additional funding, some of which could be used to pay the cash consideration and other costs of the merger. However, there can be no assurance that the proposed public offering will be completed or that the proceeds from the proposed public offering will be sufficient for those purposes.

The merger agreement does not include a financing contingency. As a result, if RCAP does not have sufficient cash on hand to pay the cash consideration and other costs required to complete the merger, or is unable to complete a contemplated public offering and financings, including the Cetera financings, or obtain other financing, it may be unable to consummate the merger, which would cause RCAP to be in default under the merger agreement. RCAP’s failure to complete the merger for any reason could have a material and adverse effect on the business and future prospects of RCAP and ICH.

For a further discussion of the risks related to financings for the pending acquisitions, see “— Risks Related to the Pending Acquisitions — RCAP’s ability to complete the Cetera acquisition and the other pending acquisitions is dependent on the consummation of the Cetera financings.”

If you elect to receive cash, you cannot be certain of the form of merger consideration that you will receive for all of your ICH shares.

In no event may the aggregate merger consideration payable in cash in the merger, together with the aggregate cash paid in lieu of fractional shares, exceed 60% of the aggregate merger consideration paid to the holders of ICH common stock in the merger. If the aggregate elections for payment in cash, together with the aggregate cash paid in lieu of fractional shares, would cause the aggregate merger consideration payable in cash to exceed such 60% threshold, the amount of cash consideration paid will be reduced on a pro rata basis so that the 60% threshold is not exceeded, with any excess consideration paid in the form of RCAP Class A common stock. Accordingly, there is a risk that you will receive a portion of the merger consideration in the form that you have not chosen.

You cannot be certain of the number of shares of RCAP Class A common stock you will receive in the merger.

Although the merger agreement provides that ICH stockholders who elect to receive RCAP Class A common stock (or fail to make a valid election) will receive, for each share of ICH common stock they own, $7.25 worth of RCAP Class A common stock, the actual number of shares of RCAP Class A common stock issuable to ICH stockholders in the merger will be determined based on the volume weighted average trading price of a share of RCAP Class A common stock on the NYSE for the five consecutive trading days immediately preceding the closing date of the merger (plus cash in lieu of fractional shares). Market prices of publicly traded securities can be volatile. For example, the closing price of RCAP Class A common stock on

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October 25, 2013, the last business day prior to the date of public announcement of the merger, was $17.00. On May 9, 2014, the closing price of RCAP Class A common stock was $32.90. If the market price of RCAP Class A common stock increases substantially during the relevant five-day trading period immediately preceding the closing date of the merger, you will receive fewer shares of RCAP Class A common stock. There can be no assurance as to the number of shares of RCAP Class A common stock you will receive in the merger.

There can be no assurance that shares of RCAP Class A common stock received by ICH stockholders in the merger can be sold for a value equal to or exceeding the market value of such shares issued in the merger.

Shares of RCAP Class A common stock will be issued as part of the merger consideration to ICH stockholders pursuant to the merger agreement, based on the volume weighted average trading price of a share of RCAP Class A common stock on the NYSE for the five consecutive trading days immediately preceding the closing date of the merger. Although such shares generally will be freely tradable when delivered by the exchange agent to ICH stockholders after the closing of the merger, no assurance can be given as to the ability of an ICH stockholder to publicly sell such shares at prices greater than the price per share received as part of the merger consideration, due also to the historical low trading volume of RCAP Class A common stock on the NYSE.

Even if ICH stockholders elect to receive the full amount of the merger consideration in the form of RCAP Class A common stock, ICH stockholders, as a group, will have significantly reduced ownership and voting interests after the merger and will exercise less influence over the management of RCAP than they currently exercise over management of ICH.

After the merger is completed, ICH stockholders will own, as a group, in the aggregate, a significantly smaller percentage of RCAP than they currently own of ICH. If ICH stockholders elect to receive the full amount of the merger consideration in the form of RCAP Class A common stock, immediately following the merger, they would own approximately 5.14% of the outstanding shares of RCAP Class A common stock, based on the number of shares of ICH common stock and RCAP Class A common stock outstanding on the record date and an assumed price for RCAP Class A common stock of $34.25 per share (representing the volume weighted average trading price of a share of RCAP Class A common stock on the NYSE for the five consecutive trading days immediately preceding the date of this proxy statement/prospectus). If only 40% of the merger consideration is paid in the form of RCAP Class A common stock (based on the 60% limitation on the aggregate amount of merger consideration payable in cash), the ownership of the outstanding shares of RCAP Class A common stock by ICH stockholders would be significantly lower, or approximately 2.12%, based on those same assumptions. In addition, as holders of RCAP Class A common stock, former ICH stockholders will be entitled to fewer votes per share than RCAP Holdings, the holder of the sole outstanding share of RCAP Class B common stock and, together with RCAP Equity, LLC, which is also directly or indirectly controlled by Messers. Schorsch and Kahane, of 24,051,499 shares of RCAP Class A common stock for a total voting power in RCAP of 92.47% as of May 9, 2014. See “Comparison of Certain Rights of Stockholders of RCAP and ICH — Voting Rights.” Consequently, as a general matter, ICH stockholders, as a group, will have significantly reduced ownership and voting interests in RCAP following the merger than they owned of ICH prior to the merger and, as a result, they will have less influence over the management and policies of RCAP than they currently exercise over the management and policies of ICH.

Some of the directors and executive officers of ICH have interests in the merger that are different from, or in addition to, those of the other ICH stockholders.

When considering the recommendations of the ICH board of directors (acting upon the unanimous recommendation of the special committee) that the ICH stockholders vote in favor of the proposal to adopt the merger agreement and approve the transactions contemplated by the merger agreement, and the other proposals to be voted on at the special meeting, ICH stockholders should be aware that certain of the directors and executive officers of ICH have arrangements that provide them with interests in the merger that are different from, or in addition to, those of the stockholders of ICH.

For instance, concurrently with the execution of the merger agreement, Timothy B. Murphy (President and Chief Executive Officer) entered into an employment agreement with Merger Sub (as the surviving entity

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in the merger) and each of John G. Cataldo (Chief Compliance Officer and Counsel), Kathleen L. Donnelly (Chief Financial Officer), Melissa Tarentino (Chief Risk Officer and General Counsel) and James L. Wallace (Chief Operating Officer) entered into offer letters with Merger Sub (as the surviving entity in the merger), relating to his or her continued employment at the surviving entity after the completion of the merger, which employment agreement and offer letters will become effective at the effective time of the merger.

Also, certain amounts may be paid or become payable to certain named executive officers of ICH in connection with the merger, as described in “The Merger — Merger-Related Compensation for ICH’s Named Executive Officers” beginning on page 113 .

In addition, as of May 9, 2014, directors and executive officers of ICH and their affiliates beneficially owned approximately 18.33% of the outstanding shares of ICH common stock, with respect to which they will receive merger consideration in the merger, and the directors and executive officers of ICH also have certain rights to indemnification and insurance coverage that will be provided by RCAP or its affiliates following the completion of the merger. On May 9, 2014, Mr. Murphy exercised all of his options to purchase 150,000 shares of ICH common stock, which, prior to such exercise, represented all of the outstanding options to purchase shares of ICH common stock. See the section entitled “The Merger — Interests of ICH’s Directors and Executive Officers in the Merger.”

Uncertainty regarding the completion of the merger may adversely affect the businesses of RCAP and ICH.

The merger will be completed only if certain conditions are met, which may cause uncertainty regarding the completion of the merger and the future structure and prospects of RCAP or ICH. This uncertainty may cause clients, prospects and financial advisors of RCAP or ICH to delay or defer the decision to do business with RCAP or ICH during the pendency of the merger, which could negatively impact revenues, earnings and cash flows of RCAP and ICH.

Similarly, uncertainty regarding the completion of the merger may foster uncertainty among financial advisors and employees of ICH about their future roles. This may adversely affect the ability of ICH to attract and retain key management, sales, marketing, trading and technical personnel, which could have an adverse effect on ICH’s ability to generate revenues at anticipated levels prior to the consummation of the merger and ICH’s ability to satisfy certain financial conditions with respect to RCAP’s obligation to effect the merger.

ICH is subject to operational restriction pursuant to the merger agreement while the merger is pending.

There are restrictions on the operations of ICH pursuant to the merger agreement that limit its ability to make acquisitions or dispositions, make capital expenditures, hire new employees and financial advisors and take other specified actions without RCAP’s consent while the merger is pending. These restrictions may impair ICH’s ability to attract, retain, and motivate key personnel and financial advisors and prevent ICH from executing its business plans, pursuing attractive business opportunities or addressing other strategic developments that may arise prior to the completion of the merger.

The merger agreement limits ICH’s ability to pursue alternatives to the merger and contains provisions that could discourage a potential third-party acquirer of ICH from making an alternative acquisition proposal and could require ICH to pay RCAP a termination fee of $2,500,000 and/or expenses of $500,000.

Subject to certain exceptions, the merger agreement prohibits ICH from soliciting, initiating, encouraging, facilitating or discussing alternative acquisition proposals from any third party, and prohibits the ICH board of directors from withdrawing or adversely modifying its recommendation that ICH stockholders adopt the merger agreement. In addition, under the merger agreement, ICH is required to pay to RCAP a termination fee of $2,500,000 and/or $500,000 in expenses if the merger agreement is terminated under certain circumstances involving ICH accepting an alternative acquisition proposal. See “The Merger Agreement — No Solicitation by ICH of Alternative Acquisition Proposals” and “— Termination Fees and Expenses.”

These provisions could discourage a potential third-party acquirer that might have an interest in acquiring all or a significant portion of ICH from considering or proposing that acquisition, even if it were prepared to pay consideration with a higher per share cash or market value than the market value proposed to be received or realized in the merger, or might result in a potential third-party acquirer proposing to pay a lower price to

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the ICH stockholders than it might otherwise have proposed to pay because of the added expense of the termination fee and/or expenses that may become payable by ICH in certain circumstances.

If the merger agreement is terminated and ICH determines to seek another business combination, it may not be able to negotiate a transaction with another party on terms comparable to, or better than, the terms of the merger.

Risks Related to the Recent and Pending Acquisitions

The pending acquisitions are subject to conditions, including certain conditions that may not be satisfied, and may not be completed on a timely basis, or at all.

Completion of each of the pending acquisitions is conditioned on certain closing conditions specific to each pending acquisition, which include, among other things, as set forth in the applicable acquisition agreement, FINRA having approved an application under Rule 1017 for a change in the indirect ownership of the acquired businesses’ broker-dealer subsidiaries, in the case of Summit, the SEC having declared effective the registration statement on Form S-4 registering the shares of RCAP Class A common stock to be issued in connection with the Summit acquisition, the shareholders of Summit having approved the Summit acquisition, and other customary closing conditions.

Also, each of the parties to any of the agreements related to the pending acquisitions have termination rights if the transactions have not been completed by a specified date, during 2014.

If the pending acquisitions are not completed on a timely basis, or at all, RCAP’s business could be adversely affected, and RCAP will be subject to a number of risks, including the following:

Moreover, if any, or all, of the pending acquisitions is, or are, not completed on a timely basis, or at all, RCAP also will not realize any of the benefits expected from its, or their, completion. This loss of benefits, or the increase in risks, could have a material adverse effect on RCAP’s growth strategy and its business following the completion of the pending acquisitions.

Uncertainty regarding the completion of the pending acquisitions may adversely affect RCAP’s business and the acquired businesses.

The pending acquisitions will be completed only if certain conditions specific to each pending acquisition are met, which may cause uncertainty regarding the future structure and prospects of RCAP, including Cetera, or the other acquired businesses. This uncertainty may cause clients, prospects and financial advisors of RCAP or the other acquired businesses, to delay or defer the decision to do business with RCAP, Cetera or the other acquired businesses during the pendency of the pending acquisitions.

Similarly, uncertainty regarding the completion of the pending acquisitions may foster uncertainty among financial advisors and employees of the other acquired businesses about their future roles. This may adversely affect the ability of the other acquired businesses to attract and retain key management, sales, marketing, trading and technical personnel.

Restrictions on the operations of the other acquired businesses may limit their ability to make acquisitions or dispositions, make capital expenditures, hire new employees and financial advisors and take other specified actions without RCAP’s consent and also may impair the acquired businesses’ ability to attract, retain, and motivate key personnel and financial advisors and prevent the acquired businesses from executing

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their business plans, pursuing attractive business opportunities or addressing other strategic developments that may arise prior to the completion of the pending acquisitions.

If uncertainty regarding the completion of the pending acquisitions, or any other risk or uncertainty, adversely affects the other acquired businesses prior to the completion of the pending acquisitions, the other acquired businesses may not be as valuable as RCAP expected they would be following the completion of the pending acquisitions, and RCAP may not realize the expected benefits of the pending acquisitions. Similarly, uncertainty regarding the completion of the pending acquisitions could also affect RCAP’s ability to enter into future transactions including acquisitions, and otherwise have an adverse effect on RCAP’s business.

An adverse judgment in a lawsuit challenging any of the pending acquisitions may prevent it from becoming effective within the expected timeframe, or at all, or may subject us to monetary damages.

Stockholders of certain of the acquired businesses have filed lawsuits and may file additional lawsuits challenging the pending acquisitions, which name or may name RCAP as a defendant.

Summit, its board of directors, RCAP and a wholly owned subsidiary formed by RCAP in connection with the Summit acquisition are named as defendants in two purported class action lawsuits (now consolidated) filed by alleged Summit shareholders on November 27, 2013 and December 12, 2013 in palm Beach County, Florida challenging the Summit acquisition. These lawsuits allege, among other things, that: (i) each member of Summit’s board of directors breached his fiduciary duties to Summit and its shareholders in authorizing the Summit acquisition; (ii) the Summit acquisition does not maximize value to Summit shareholders; and (iii) RCAP and its acquistion subsidiary aided and abetted the breaches of fiduciary duty allegedly committed by the members of Summit’s board of directors. On May 9, 2014, the plaintiff shareholders moved for leave to file an amended complaint under seal. The amended complaint asserts claims similar to those in the original complaint, adds allegations relating to amendment of the Summit merger agreement on March 17, 2014, and also challenges the adequacy of the disclosures in the registration statement related to the issuance of shares of RCAP Class A common stock as consideration in the Summit acquisition, the background of the transaction, the fairness opinion issued to the Summit special committee, and Summit’s financial projections. The consolidated lawsuits seek class-action certification, equitable relief, including an injunction against consummation of the Summit acquisition on the agreed-upon terms, and damages.

On January 13, 2014, a lawsuit was filed in state court in North Carolina by plaintiffs claiming to be minority and non-managing members of Hatteras naming as defendants Hatteras Alternative Mutual Funds LLC, or HAMF, and certain of its affiliates alleging that defendants breached their fiduciary duties in connection with the Hatteras acquisition. In this action, plaintiffs claim certain of the defendants: (a) breached certain inter-company agreements by entering into the Hatteras purchase agreement, including through the sale of the Hatteras’ assets without plaintiffs’ consent; (b) breached their fiduciary duties; and (c) placed unreasonable restrictions on plaintiffs’ access to certain information. Among other remedies, plaintiffs sought injunctive relief prohibiting the Hatteras acquisition and a declaratory judgment that the Hatteras purchase agreement is invalid and unenforceable. On January 28, 2014, Hatteras and the other defendants answered the complaint and filed counterclaims alleging that plaintiffs had: (i) breached the operating agreement; (ii) breached their fiduciary duties; (iii) committed a tort by using Hatteras’ confidential information to set up a competing fund; and (iv) interfered with the Hatteras purchase agreement by attempting to derail the sale. Hatteras and the other defendants also filed a motion for prompt hearing, requesting that the court promptly address the minority shareholders’ claim that Hatteras is prohibited from completing the sale. Following hearings with the court on February 27, 2014 and March 11, 2014, the plaintiffs sent a letter, dated March 14, 2014, to the court agreeing to forego their request for a preliminary injunction to enjoin the Hatteras purchase, and, if the Hatteras purchase closes, agreeing not to take any legal action seeking to reverse the sale, in return for Hatteras’ agreement to escrow a portion of the sale proceeds. On April 14, 2014, the court “so-ordered” a stipulation among the parties to the litigation, or the stipulated order, providing that that plaintiffs’ request for an injunction enjoining the sale was withdrawn and that plaintiffs would not take any future action aimed at reversing or undoing the sale prior to or after the closing. The stipulated order further provided that plaintiffs were not agreeing that HAMF had the right to enter into the Hatteras purchase agreement or that the sale would not violate defendants’ fiduciary duties to HAMF or plaintiffs. The stipulated order further provides that, other than the right to injunctive relief, which plaintiffs agreed to forego, plaintiffs retained their existing

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and potential rights and claims for relief, including their claims for declaratory judgment. As a result of the parties’ agreement and the stipulated order, the action no longer seeks to prevent the closing of the Hatteras acquisition, and plaintiffs’ remaining claims are solely for declaratory relief and monetary damages against Hatteras.

RCAP cannot assure you as to the outcome of these lawsuits, or any similar lawsuit that may be filed in connection with any of the other pending acquisitions, including the costs associated with defending these claims or any other liabilities that may be incurred in connection with the litigation or settlement of these claims, including the payment of monetary damages. If the plaintiffs are successful in obtaining an injunction or other similar remedy prohibiting the parties from completing one of the pending acquisitions on the agreed-upon terms, it may not be completed in the expected time frame, or at all. Whether or not any plaintiff’s claims are successful, this type of litigation is often expensive and diverts management’s attention and resources, which could adversely affect the operation of RCAP’s business.

The unaudited pro forma consolidated financial information included in this proxy statement/prospectus is only for illustrative purposes and may not necessarily reflect RCAP’s actual operating results and financial condition following the completion of the recent and pending acquisitions.

The unaudited pro forma consolidated financial information included in this proxy statement/prospectus is derived from separate historical consolidated financial statements, is presented for illustrative purposes only and is not necessarily indicative of what RCAP’s actual financial position or results of operations would have been had the pending acquisitions been completed on the dates indicated. The preparation of this pro forma information is based upon available information and certain assumptions and estimates that RCAP currently believes are reasonable in valuing the assets and liabilities of the acquired businesses and assumes that all of the pending acquisitions are consummated. If these assumptions and estimates proved not to be accurate or any or all of the pending acquisitions are not consummated, the pro forma financial information would not correctly reflect RCAP’s results of operations and financial position during the period presented or in the future.

Integration of the acquired businesses into RCAP’s business will be challenging and difficult, and RCAP may be unable to profitably operate the acquired businesses and realize the expected benefits of the recent and pending acquisitions.

RCAP’s success will depend in large part on the success of RCAP’s management in integrating the operations, strategies, technologies and personnel of Cetera and, following the completion of the pending acquisitions, the other acquired businesses. RCAP may fail to realize some or all of the anticipated benefits of the pending acquisitions if the integration process takes longer or is more costly than expected or otherwise fails to meet expectations. In addition, RCAP anticipates that the overall integration of Cetera and the other acquired businesses will be a time-consuming and expensive process that could significantly disrupt RCAP’s existing businesses, even if it is effectively and efficiently planned and implemented, particularly given the size of Cetera relative to the size of RCAP and the fact that RCAP has made multiple acquisitions in a short period of time.

Potential difficulties and challenges RCAP may encounter in the integration process include the following:

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Other factors may also prevent RCAP from profitably operating the acquired businesses and realizing the expected benefits of the recent and pending acquisitions:

Integration difficulties, or any other factors that make operating the acquired businesses or RCAP’s existing businesses more challenging following the completion of the recent and pending acquisitions, may prevent RCAP from realizing the benefits from the recent and pending acquisitions to the extent, or in the time frame, anticipated by RCAP. Any of these factors could have a material adverse effect on RCAP’s business, results of operations and financial condition or cash flows.

To the extent RCAP continues to expand its businesses following the completion of the pending acquisitions through new offerings and services or additional complementary acquisitions, RCAP will face similar risks and uncertainties.

The recent and pending acquisitions may expose RCAP to unknown liabilities.

RCAP will be subject to all of the liabilities of the acquired businesses, other than certain liabilities not assumed pursuant to the agreements related to the recent and pending acquisitions. If there are unknown liabilities or other obligations, including contingent liabilities, RCAP’s business could be materially affected. RCAP may learn additional information about the acquired businesses that adversely affects RCAP, such as unknown liabilities or other issues that could affect RCAP’s business or results of operations.

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Moreover, RCAP does not have the right to be indemnified under all of the agreements related to the recent and pending acquisitions, including the merger agreement, and, to the extent there is indemnification against such losses and liabilities in certain of the merger agreements, the amount of such indemnification is limited and may not be sufficient to cover the actual losses RCAP may suffer.

RCAP has incurred, and expects to continue incurring, substantial expenses related to the recent and pending acquisitions.

RCAP has incurred, and expects to continue incurring, substantial expenses in connection with completing the recent and pending acquisitions and integrating the operations of the acquired businesses with RCAP’s operations. RCAP has assumed that a certain level of transaction and integration expenses would be incurred. The aggregate transaction expenses incurred in connection with completing the recent and pending acquisitions is currently expected to be $73 million, but there are a number of factors beyond RCAP’s control that could affect the total amount or the timing of its transaction and integration expenses. Many of the expenses that will be incurred, by their nature, are difficult to estimate accurately at the present time. As a result, the transaction and integration expenses associated with the recent and pending acquisitions could, particularly in the near term, exceed the savings that RCAP expects to achieve from the elimination of duplicative expenses and the realization of economies of scale and cost savings related to the integration of the acquired businesses following the completion of the recent and pending acquisitions.

Risks Related to the Acquired Businesses

Any decrease in assets under administration or assets under management may decrease RCAP’s revenue.

Management fees are primarily based on assets under management. The results of operations of RCAP’s independent retail advice platform will also depend on its level of assets under administration. Assets under management and assets under administration balances are impacted by both the flow of client assets in and out of accounts and changes in market values. Poor investment performance by financial products and financial advisors could result in reduced levels of assets under management or administration or a loss of managed accounts and could result in reputational damage that might make it more difficult to attract new investors. If the independent retail advice platform or the investment management platform experiences a reduction in assets under administration or assets under management, RCAP’s revenues may decline.

The independent retail advice platform will face significant competition for financial advisors.

If the independent retail advice platform fails to attract new financial advisors or to retain and motivate existing financial advisors, RCAP’s results of operations may suffer. The market for experienced and productive financial advisors is highly competitive, and significant resources must be devoted to attracting and retaining the most qualified financial advisors. If the independent retail advice platform is not successful in retaining highly qualified financial advisors, it may not be able to retain its clients or recover the expense involved in attracting and training these individuals. It also may be unable to recruit suitable replacements. A loss of a materially large group of financial advisors could have a material adverse effect on RCAP’s results of operations.

Financial advisors face significant competition for their clients, who are critical to their success.

Poor service or performance of the financial products that the independent retail advice platform offers may result in the loss of accounts for its financial advisors. In addition, the independent retail advice platform must monitor the pricing of its services and financial products in relation to competitors and periodically may need to adjust commission and fee schedules to remain competitive. Competitive pressures on the pricing of services or products can also cause clients to shift their accounts and investments to a different financial advisor or financial product. If the independent retail advice platform or the investment management platform experiences losses of managed accounts, or fails to attract new ones, RCAP’s revenues would decline.

RCAP’s future success depends upon the continued services of key senior management personnel of ICH and the other acquired businesses, including executive officers and senior managers.

RCAP expects that Cetera and the other acquired businesses, including ICH, will continue to be operated independently under their own brands and management following the completion of the recent and pending

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acquisitions. RCAP’s future success depends upon the continued services of key senior management personnel of the acquired businesses, including executive officers and senior managers. RCAP has retained the senior management of Cetera pursuant to employment agreements entered into in connection with the closing of the Cetera acquisition, and Cetera has operated independently under its own brand since RCAP’s acquisition of Cetera.

Merger Sub (as the surviving entity of the merger) has entered into an employment agreement with Timothy B. Murphy (President and Chief Executive Officer) and offer letters with each of John G. Cataldo (Chief Compliance Officer and Counsel), Kathleen L. Donnelly (Chief Financial Officer), Melissa Tarentino (Chief Risk Officer and General Counsel) and James L. Wallace (Chief Operating Officer), relating to his or her continued employment at Merger Sub after the effective time of the merger. RCAP has also entered into agreements, term sheets and offer letters with certain executive officers and senior managers of the other acquired businesses pursuant to which they will remain employed by RCAP following the completion of the pending acquisitions.

These agreements, term sheets and offer letters are terminable contracts and do not ensure that key executive officers and senior managers of ICH, Cetera and the other acquired businesses will remain employed by RCAP for as long as their services would be beneficial to RCAP. There can be no assurance, however, that all members of senior management of each of the acquired businesses in fact will remain with us. The loss of one or more of these individuals, and the failure to recruit a suitable replacement or replacements, could have a material adverse effect on RCAP’s business.

The relationships of the acquired businesses with sponsors of financial products may be disrupted.

Cetera and the other acquired businesses have relationships with most of the industry-leading sponsors of financial and insurance products under selling agreements, which include strategic partnership arrangements, that may be terminated upon notice. These relationships are driven by many factors, such as the ability of Cetera and the other acquired businesses to facilitate sufficient sales volume through their distribution networks. It is possible that RCAP’s ownership and control of Cetera and the other acquired businesses could create the perception that their financial advisors might favor products sponsored by American Realty Capital over products sponsored by other sponsors, which could affect the willingness of other sponsors to enter into new, or maintain existing, selling agreements with the acquired businesses following their acquisition by us. Any loss or damages to a relationship with a product sponsor, resulting in termination of a selling agreement or otherwise, could adversely affect RCAP’s independent retail advice platform and RCAP’s results of operations.

The independent retail advice platform competes based on highly specialized and, in many cases, proprietary technologies that are difficult and costly to maintain.

Highly specialized and, in many cases, proprietary technologies are required to support certain essential operational functions of the independent retail advice platform, including portfolio management, client service, accounting and internal financial processes and controls, and regulatory compliance and reporting. These technology platforms also are necessary to enable the independent retail advice platform to serve the needs of, and attract, financial advisors and enable them to serve the needs of their clients. Moreover, the effective use of technology increases efficiency and should enable the independent retail advice platform to reduce costs. There can be no assurance that RCAP will be able to effectively adopt or develop new or adapt existing technologies to meet client, industry and regulatory demands made upon the independent retail advice platform, and any failure to do so could materially and adversely affect RCAP’s results of operations.

Moreover, RCAP might be required to make significant capital expenditures to maintain competitive technology and retain skilled information technology employees, although there can also be no assurance that RCAP can retain such skilled information technology employees or that its investments in staff and technology will successfully meet the needs of financial advisors and their clients. Additionally, if the emergence of new industry standards and practices render RCAP’s existing systems obsolete or uncompetitive, any upgrades or expansions may also require significant expenditures of funds and may also cause RCAP to suffer system degradations, outages and failures. If RCAP’s technology systems were to fail and it were unable to recover in a timely way, RCAP might be unable to fulfill critical business functions, which could

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lead to a loss of financial advisors and their clients and could harm its business reputation. A technological breakdown could also interfere with RCAP’s ability to comply with financial reporting and other regulatory requirements, exposing RCAP to disciplinary action and to liability to its financial advisors and their clients.

There can be no assurance that RCAP will be able to establish or maintain a competitive advantage based on its technology.

A change in the “independent contractor” status of financial advisors could adversely affect RCAP.

RCAP’s independent retail advice platform relies on the treatment of financial advisors as independent contractors. Financial advisors operate from their own offices and are responsible in large part for the costs and expenses involved in their operations. The enactment of any legislation that would affect the eligibility requirements for independent contractor status could have a significant effect on this business model and lead to additional costs and expenses, which could have a material adverse effect on the independent retail advice platform and RCAP’s results of operations.

RCAP is exposed to significant legal liabilities from the operations of its independent retail advice platform.

RCAP is subject to claims, litigation and regulatory proceedings involving its independent retail advice platform resulting from, among other things, alleged and actual errors and omissions, breach of fiduciary or other duties owed to clients, or misconduct in effecting securities transactions, rendering investment advice or placing insurance, and criminal misconduct. The nature of some of the matters, the aggregate volume of claims and potential damages and penalties resulting from these claims, litigation and regulatory proceedings could have an adverse impact on the business and financial condition of the independent retail advice platform and could cause RCAP serious reputational harm. Defending against such claims, litigation and regulatory proceedings can also involve significant defense costs.

Bases for such legal liability could include, but are not limited to:

There can be no assurance that past or future activities of the acquired businesses exposing them to legal liability, on the bases described above or otherwise, will not lead to a material adverse effect on the business of RCAP’s independent retail advice platform and RCAP’s results of operations.

Misconduct and errors by employees and financial advisors, who operate in a decentralized environment, could harm the independent retail advice platform.

The businesses of RCAP’s independent retail advice platform generally operate through small, decentralized offices, largely with financial advisors who are not direct employees. RCAP will not always be able to prevent misconduct (intentional or otherwise) or errors by financial advisors, and the precautions taken to prevent and detect these activities may not be effective in all cases. SEC and FINRA rules require the

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broker-dealer entities on the independent retail advice platform to supervise the activities of their financial advisors. However, a substantial number of the offices are supervised by registered principals off-site, which may make supervision more challenging.

Misconduct (intentional or otherwise) or errors by financial advisors on the independent retail advice platform, either as affects their clients or otherwise, and any failure to adequately supervise them, could subject RCAP to liability and result in violations of law, regulatory sanctions, damage awards, limitations on activities or other serious reputational or financial harm to RCAP.

The independent retail advice platform is dependent on third parties to provide clearing services.

All of the acquired businesses rely on third parties to provide clearing services, as well as other operations and support functions that they cannot provide internally. In the event one or several of these relationships were to be terminated, there can be no assurance that the functions previously provided could be replaced on comparable terms, or at all. In the event a clearing broker was to cease doing business with any of the acquired businesses, its ability to execute transactions on behalf of, and provide a full range of services to, its clients could be negatively impacted, which, in turn, could have a material adverse effect on both its revenues and earnings.

Furthermore, clearing agreements generally require introducing brokers, like the acquired businesses (other than Cetera Investment Services LLC (d/b/a Cetera Financial Institutions)), to indemnify the clearing broker against losses from securities transactions. Because the introducing broker is liable to the extent of the net loss on any unsettled trades, introducing brokers are customarily required to post a clearing deposit. However, there can be no assurance that the amount of any indemnified loss will not exceed the amount of any clearing deposit. Furthermore, in periods of extreme market volatility, it is possible that there may be an increase in the number of unsettled trades, which could cause the loss of clearing deposits as well as additional amounts.

RCAP’s investment management platform may be affected by the poor investment performance of the mutual funds it sponsors.

As an investment management platform, Hatteras is dependent on the performance of the mutual funds it sponsors, which can be adversely impacted by many factors, including general market conditions or underperformance relative to competitors or benchmarks, any of which may decrease sales and increase redemptions.

Moreover, because the Hatteras funds are funds of funds, which means they generally invest their assets in other underlying investment funds, the performance of the Hatteras funds will be affected by the performance of the underlying investment funds and their advisors, who will be outside RCAP’s control. There can be no assurance that Hatteras’ asset allocation or the performance of the underlying investment funds will be successful. Anything that adversely affects the investment funds could adversely affect RCAP’s investment management platform and have a negative impact RCAP’s results of operations following the completion of the Hatteras acquisition.

There are risks involved in acting as a “fiduciary” under ERISA.

The acquired businesses are subject to the Employee Retirement Income Security Act of 1974, as amended, or ERISA, and Section 4975 of the Code, and to regulations promulgated thereunder, insofar as they act as a “fiduciary” under ERISA or the Code with respect to benefit plan clients or otherwise deal with benefit plan clients. ERISA and applicable provisions of the Code impose duties on persons who are considered fiduciaries, prohibit specified transactions involving benefit plan clients (including, without limitation, with respect to ERISA, employee benefit plans (as defined in Section 3(3) of ERISA) and, with respect to the Code, individual retirement accounts and Keogh plans) and impose monetary penalties (including excise taxes) for violations of these duties and restrictions. Any failure to comply with these requirements could result in significant liabilities, or, in a worst case, severely limit the extent to which the acquired businesses could act as fiduciaries for any plans.

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The SEC may limit 12b-1 fees.

Certain of the acquired businesses receive 12b-1 fees, which are fees that investors pay when they purchase shares in certain mutual funds. During 2013, the acquired businesses received $345.2 million in 12b-1 fees, although RCAP did not receive any. The SEC has proposed new rules and disclosure requirements that, if adopted, would significantly change the existing regulatory framework governing 12b-1 fees, including distribution and servicing fees, and ongoing sales charges. In the event the SEC limited the ability of any of the acquired businesses to receive 12b-1 fees, its revenues and earnings could be negatively impacted, which could have an adverse effect on RCAP’s growth strategy and its business.

Additionally, the U.S. Department of Labor, or the DOL, which promulgates rules related to retirement plans, is considering eliminating commissions and 12b-1 fees on qualified retirement accounts, including IRAs.

Risks Related to RCAP’s Existing Businesses

Substantially all RCAP’s revenues are derived from American Realty Capital, which is under common control with RCAP.

American Realty Capital, which is controlled, directly or indirectly, by the principals (who, directly or indirectly, control RCAP Holdings, RCAP Equity, LLC and RCS Capital Management), has accounted for 80% of RCAP’s total revenues for the year ended December 31, 2013. For example, all of the $28.1 billion in value of mergers and acquisitions transactions, all of the $22.7 billion in purchase price of equity capital markets transactions and all of the $10.3 billion of debt capital markets transactions on which RCAP’s investment banking and capital markets business advised in 2013 related to transactions involving direct investment programs or entities which had been sponsored or managed by American Realty Capital. Moreover, $713.5 million of the $886.5 million in revenues generated by RCAP in 2013 resulted from equity capital raised by direct investment programs or other entities sponsored or managed by American Realty Capital. Equity capital raised by programs sponsored or managed by American Realty Capital exclude one investment program co-sponsored by American Realty Capital and in which an affiliate of American Realty Capital is an advisor, but in which none of the executive officers are affiliates of American Realty Capital and in which the sub-advisor, which is unaffiliated with American Realty Capital, is responsible for selection of investments on behalf of the advisor.

Following the completion of the pending acquisitions, on a pro forma basis for the year ended December 31, 2013, 67% of RCAP’s revenues would have been derived from sources other than direct investment programs or other entities sponsored or managed by American Realty Capital. RCAP’s dealer manager relationships and advisory engagements continue to be substantially focused on American Realty Capital which will, accordingly, continue to account for a significant percentage RCAP’s revenue. For the year ended December 31, 2013, 6.4% of the revenues of ICH were derived from sales of products sponsored by American Realty Capital. On a pro forma basis for the year ended December 31, 2013, 33% of RCAP’s revenues, or $0.9 billion, would have been derived from sales of products sponsored by American Realty Capital, including $0.7 billion from equity capital raised by direct investment programs distributed by RCAP and $80.3 million from retail sales by the acquired businesses.

In addition, recent scrutiny over the direct investment program industry could negatively impact the revenue derived by American Realty Capital from direct investment programs it sponsors. See “— Risks Related to the Securities Industry — RCAP relies on direct investment programs for a substantial portion of its revenues.”

As a result of RCAP’s dependence upon revenue derived from American Realty Capital, any adverse impact on the revenue and other results of operations of American Realty Capital would have an adverse impact on RCAP’s revenue and other results of operations.

RCAP may fail to manage its future growth effectively.

RCAP has significantly expanded its operations since they commenced with the inception of Realty Capital Securities in 2007, and RCAP will continue to expand its operations through the recent and pending acquisitions to include an independent retail advice platform and an investment management platform. The

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completion of the recent and pending acquisitions will increase RCAP’s revenues $1.7 billion, or 191% on a pro forma basis for the year ended December 31, 2013, of which $1.1 billion is attributable to revenues from Cetera. It is also anticipated that RCAP will continue its plan to expand and grow RCAP’s business through additional complementary acquisitions.

This future growth, if it occurs, will place significant demands on RCAP’s management, infrastructure and other resources. To manage any future growth, RCAP will need to:

If RCAP does not effectively manage its growth, it may not be able to meet the needs of its clients and its financial advisors, which could adversely affect RCAP’s revenues and operations.

RCAP has a limited operating history, and its past performance may not be indicative of its future results.

Realty Capital Securities commenced operations August 2007. RCAP’s investment banking, capital markets and transaction management services platform was launched during the period from November 2012 through January 2013, and has a limited operating history. Following the completion of the Cetera acquisition and the other pending acquisitions, a significant percentage of RCAP’s revenue will be derived from RCAP’s independent retail advice platform, a business RCAP has not previously operated. Accordingly, you should not rely on RCAP’s past performance to predict its future results.

There can be no assurance that RCAP will be successful in pursuing its long-term strategy of expanding into complementary businesses.

RCAP’s long-term strategy includes expanding into complementary businesses. As part of this strategy RCAP entered into the recent and pending acquisitions. See “RCS Capital Corporation — The Recent and Pending Acquisitions” for more details. RCAP may enter into additional acquisitions. See “RCS Capital Corporation — Business Overview —  Potential Additional Acquisition.” There are also risks associated with acquisitions, including the merger and the other recent and pending acquisitions, which may be costly and may not result in their intended benefits. See “— Risks Related to the Recent and Pending Acquisitions” for a more detailed discussion of these risks, which would apply to any additional acquisitions.

Furthermore, any transaction similar to the recent and pending acquisitions involving a change in ownership or control of a broker-dealer could require an application to FINRA for approval of such change of ownership or control and that approval may not be granted. Accordingly, even if RCAP is able to negotiate a transaction with an acquisition candidate, RCAP may not be able to consummate such transaction, thereby inhibiting RCAP’s ability to fully execute its growth strategy. Moreover, FINRA may restrict any proposed business expansion by either an acquisition candidate or one of RCAP’s existing brokerage firms, further inhibiting RCAP’s growth opportunities.

If RCAP fails to acquire and integrate complementary businesses, RCAP’s results of operations and future prospects would be adversely affected.

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There can be no assurance that RCAP will be successful in its long-term strategy of expanding its service offerings to clients other than American Realty Capital.

A key component of RCAP’s long-term business strategy is to expand its wholesale distribution platform and its investment banking, capital markets and transaction management services platform to sponsors and other participants in the management and sale of direct investment programs other than American Realty Capital. Other direct investment sponsors may not want to retain RCAP for a variety of reasons, including its common ownership with American Realty Capital. Accordingly, there can be no assurance that such strategy will be successful.

If RCAP fails to increase or diversify its market share of direct investment programs, RCAP’s results of operations and future prospects may be adversely affected.

Extensive or frequent changes in regulations could adversely affect RCAP’s business.

The securities industry is subject to extensive and frequently changing requirements under federal and state securities and other applicable laws and self-regulatory organization rules. The SEC, FINRA, various securities exchanges and other U.S. governmental or regulatory authorities continuously review legislation and regulatory initiatives and may adopt new or revised laws and regulations. Such laws and regulations may be complex, and RCAP may not have the benefit of regulatory or federal interpretations to guide it in compliance. Changes in the law or new interpretations of existing laws also could have an adverse effect on RCAP’s methods and costs of doing business.

For example, with respect to direct investment programs, FINRA has proposed amendments to its rules that govern disclosure of a per share estimated value of a direct investment program security. Under one of the proposed amendments, the share value of a direct investment program security may be shown as the offering price per share less dealer manager fees, selling commissions, organization and offering expenses and potentially certain distributions, paid per share. The proposed amendments could adversely impact direct investment programs if investors or financial advisors react negatively to the new disclosure regime, and such an adverse impact on direct investment programs may harm RCAP’s results of operations.

In addition, state securities regulators require that investors in direct investment programs meet certain minimum income and/or net worth standards. These standards may vary from state to state and change frequently. Changes to suitability standards may require RCAP to expend resources familiarizing itself, as well as the financial advisors with whom RCAP does business, with the new standards. If a financial advisor does not satisfy the requirements with regards to suitability standards, RCAP could be subject to substantial liability, including fines, penalties and possibly rescission.

Along with suitability requirements, state regulators have also imposed limitations on an investor’s exposure to direct investment programs. The breadth and scope of these limitations have varied considerably and may operate to limit the exposure that a resident of a certain state has to a product, sponsor or direct investment programs generally. These concentration limitations have been applied with increasing frequency and have increasingly targeted all direct investment programs.

The DOL is preparing an amendment to the definition of “fiduciary” for purposes of ERISA. The proposed rule would broaden the scope of persons who could be deemed to be ERISA fiduciaries and the activities that would be subject to fiduciary standards. The proposed rule could have consequences on the securities industry that are difficult to predict. The uncertainty surrounding the proposed DOL rulemaking may cause broker-dealers to delay their decision to sell products that RCAP’s clients are offering, which could reduce demand for RCAP’s services. If RCAP were deemed a fiduciary or if the activities of RCAP were deemed to be fiduciary activities, or if the same were true for the broker-dealers with whom RCAP does business, or whom RCAP may acquire through the pending acquisitions or otherwise, RCAP and they may be subject to additional regulation and, potentially, liability, and RCAP’s results of operations could suffer as a result.

These risks, as well as the additional risks described under “— Risks Related to the Securities Industry  — As owner of the acquired businesses, and any future additional acquired business, RCAP may be exposed

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to regulatory, compliance and legal risks that are in addition to, and may be different from, those RCAP currently faces,” will also apply to RCAP’s independent retail advice platform following the completion of the pending acquisitions.

Realty Capital Securities is prohibited from raising money for U.S. Net Lease REITs sponsored by American Realty Capital.

During 2013, 38% of equity capital raised by non-traded REITs distributed by RCAP consisted of sales of interests in those non-traded REITs with a primary investment strategy of investing in U.S. single-tenant, net-leased properties, or U.S. Net Lease REITs, sponsored by American Realty Capital. In connection with the merger between American Realty Capital Properties, Inc., or ARCP, and Cole Real Estate Investments, Inc., or Cole, American Realty Capital and Mr. Schorsch agreed that neither American Realty Capital nor any of its affiliates, including Realty Capital Securities, will be permitted to sponsor or raise capital for any U.S. Net Lease REITs sponsored by American Realty Capital. Mr. Schorsch and other persons affiliated with American Realty Capital are directors and executive officers of ARCP.

Although this restriction does not prohibit Realty Capital Securities from raising money for U.S. Net Lease REITs that are not affiliates of American Realty Capital, Mr. Schorsch or any of their affiliates, there can be no assurance that Realty Capital Securities will be able to sell interests in other types of REITs or U.S. Net Lease REITs sponsored by unaffiliated sponsors to replace the loss of sales in U.S. Net Lease REITs sponsored by American Realty Capital. Furthermore, although Cole’s wholesale broker-dealer has not to date distributed interests in REITs other than U.S. Net Lease REITs, it could in the future do so and could compete with Realty Capital Securities.

RCAP’s ability to attract and retain qualified professionals is critical to its success, and any failure to do so may materially impair the value of your shares of RCAP Class A common stock.

RCAP depends on the skills and expertise of the qualified professionals who work for its operating subsidiaries and its success depends on its ability to retain existing and attract new qualified professionals. The qualified professionals of the operating subsidiaries are generally direct, full-time employees of the operating subsidiaries. The professionals and senior marketing personnel of the operating subsidiaries have direct contact with clients, financial advisors and retail broker-dealers, and with other key individuals, and the loss of these personnel could jeopardize those relationships and result in the loss of such accounts. If RCAP loses the services of any key personnel, RCAP may not be able to manage and grow its operations effectively, enter new markets, develop new products or effectively integrate businesses it acquires, including but not limited to the acquired businesses, into its operations.

RCAP also anticipates that it will be necessary for it to hire additional professionals as it further diversifies its products and strategies. Competition for employees with the necessary qualifications is intense and RCAP may not be successful in its efforts to recruit and retain the required personnel. RCAP’s ability to retain and attract such personnel will depend heavily on the amount of compensation RCAP can offer. Compensation levels in the securities industry are highly competitive. Consequently, RCAP’s profitability could decline as it competes for personnel. An inability to recruit and retain qualified personnel could affect RCAP’s ability to provide acceptable levels of service to its clients and funds and hinder RCAP’s ability to attract new clients, each of which could have a material adverse effect on RCAP’s business.

RCAP may require additional financing, which may not be available on acceptable terms or at all.

In order for RCAP to have the opportunity for future success and profitability, it periodically may need to obtain additional financing, either through borrowings, public offerings, private offerings, or some type of business combination, including through RCAP’s proposed public offering. RCAP may need to seek to raise additional capital through other available sources, which may include borrowing additional funds or raising additional capital from third parties, and there can be no assurance that RCAP will be successful in obtaining required funds on favorable terms, or at all. Additionally, the issuance of new securities to raise capital will cause the dilution of shares held by current stockholders.

If RCAP is unable to generate adequate cash from its operations, or from financing activities, its liquidity and results of operations could be adversely impacted.

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RCAP’s future indebtedness could adversely affect its financial health and may limit its ability to use debt to fund future capital needs.

Concurrently with the closing of the Cetera acquisition, RCAP entered into the Cetera financings, which included the incurrence of indebtedness under the bank facilities and the issuance of the convertible notes to Luxor.

Pro forma for the recent and pending acquisitions and the Cetera financings as of December 31, 2013, RCAP had total indebtedness of $845.1 million. RCAP’s level of indebtedness could increase its vulnerability to general adverse economic and industry conditions. It could also require RCAP to dedicate a substantial portion of its cash flow from operations to payments on its indebtedness, thereby reducing the availability of its cash flow to fund working capital, capital expenditures and other general corporate purposes. RCAP also may require cash to meet certain other requirements under the bank facilities, including mandatory prepayment of up to $80.0 million if one or more of the merger, the Hatteras acquisition and the Summit acquisition are abandoned or terminated. In addition, it is an event of default under the bank facilities if First Allied does not repay certain outstanding indebtedness by July 28, 2014 or if an amount sufficient to repay the First Allied notes deposited into the escrow, or the special escrow, that may be drawn on to repay First Allied notes upon the earlier to occur of the closing of RCAP’s proposed public offering and August 27, 2014. Even if RCAP has not consummated the First Allied acquisition or completed the proposed public offering, RCAP may be required to arrange for repayment of the First Allied indebtedness or to fund the special escrow to avoid the occurrence of an event of default.

RCAP may not be able to maintain a level of cash flows from its operating activities sufficient to permit it to pay the principal, premium, if any, and interest on its indebtedness and to meet other requirements under the bank facilities. In addition, RCAP is limited in the amount of capital that it can draw from any broker-dealer subsidiary. If RCAP’s cash flows and capital resources are insufficient to fund its debt service obligations, RCAP could face substantial liquidity problems and could be forced to sell assets, seek additional capital or seek to restructure or refinance its indebtedness. These alternative measures may not be successful or feasible and may not be on as favorable terms. The bank facilities and the indenture governing the convertible notes will restrict RCAP’s ability to sell assets. Even if RCAP could consummate those sales, the proceeds that RCAP realizes from them may not be adequate to meet any debt service obligations then due. Furthermore, if an event of default were to occur with respect to RCAP’s outstanding indebtedness, its creditors could, among other things, accelerate the maturity of its indebtedness.

In addition, RCAP’s level of indebtedness may limit its flexibility in planning for changes in its business and the industry in which it operates, and limit its ability to borrow additional funds. Furthermore, the bank facilities and the indenture governing the convertible notes will permit RCAP to incur additional indebtedness. Although the bank facilities and the indenture governing the convertible notes will contain restrictions on the incurrence of additional indebtedness, these restrictions will be subject to a number of significant qualifications and exceptions, and the indebtedness incurred in compliance with these restrictions could be substantial. Also, these restrictions will not prevent RCAP from incurring obligations that do not constitute “indebtedness” as defined in the bank facilities and the indenture governing the convertible notes. To the extent new debt or other obligations are added to RCAP’s currently anticipated debt levels, the substantial indebtedness risks described above would increase.

The bank facilities and the indenture governing the convertible notes will contain restrictions that may prevent RCAP from taking actions that RCAP believes would be in the best interest of RCAP’s business.

The bank facilities and the indenture governing the convertible notes will contain customary restrictions on RCAP’s activities, including covenants that may restrict it from:

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RCAP also is required to comply with financial covenants of a maximum total leverage ratio, a minimum fixed charge coverage ratio and minimum regulatory net capital. These restrictions may prevent RCAP from taking actions that RCAP believes would be in the best interest of RCAP’s business. RCAP’s ability to comply with these restrictive covenants will depend on its future performance, which may be affected by events beyond its control.

If RCAP violates any of these covenants and is unable to obtain waivers, RCAP would be in default under the bank facilities or indenture and payment of its indebtedness could be accelerated. The acceleration of RCAP’s indebtedness under one agreement may permit acceleration of indebtedness under other agreements that contain cross-default or cross-acceleration provisions. If RCAP’s indebtedness is accelerated, it may not be able to repay that indebtedness or borrow sufficient funds to refinance it. Even if RCAP is able to obtain new financing, it may not be on commercially reasonable terms or on terms that are acceptable to RCAP. If RCAP’s indebtedness is in default for any reason, RCAP’s business could be materially and adversely affected.

In addition, complying with these covenants may also cause RCAP to take actions that are not favorable to holders of RCAP Class A common stock and may make it more difficult for RCAP to successfully execute its business strategy and compete against companies that are not subject to such restrictions.

Increases in interest rates, by potentially adversely impacting the performance of direct investment programs, including net lease programs, may negatively impact RCAP.

As with other yield-oriented securities, shares of direct investment programs, particularly those marketed to “mass affluent” investors, who RCAP believes seek products with “durable income” characteristics, are impacted by their level of distributions to their stockholders. The distribution rate is often used by investors to compare and rank similar yield-oriented securities for investment decision-making purposes. Therefore, changes in interest rates, either positive or negative, may affect the level of distributions that direct investment programs may make and influence the decisions of investors who are considering investing in their common stock. A rising interest rate environment, due to recently announced changes in the monetary policy of the United States Federal Reserve or otherwise, could have an adverse impact on the common stock price of direct investment programs, their ability to issue additional equity and the cost to them of any such issuance. A rising interest rate environment could also adversely affect the relative attractiveness of direct investment programs to existing and potential investors as compared to other investments with returns that would be expected to benefit from rising interest rates, which could reduce demand. In particular, RCAP believes the current environment of modestly rising interest rates will dampen demand for U.S. Net Lease REITs, which typically feature long-term leases with fixed rent payments that may not increase in line with rents from other property types in a rising interest rate environment. Because RCAP relies on direct investment programs, any macroeconomic conditions affecting them, or demand from investors for them, adversely may negatively impact RCAP.

Rising interest rates may also have adverse effects on financial products sold through the independent retail advice platform, which could cause RCAP’s results of operations to suffer following the completion of the pending acquisitions.

RCAP is exposed to risks due to its investment banking activities.

Participation in an underwriting syndicate or a selling group involves both economic and regulatory risks. An underwriter may incur losses if it is unable to resell the securities it is committed to purchase, or if it is forced to liquidate its commitment at less than the purchase price. In addition, under federal securities laws, other statutes and case law with respect to underwriters’ liabilities and limitations on the indemnification of

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underwriters by issuers, an underwriter is subject to substantial potential liability for misstatements or omissions of material facts in prospectuses and other communications with respect to such offerings. Acting as a managing underwriter increases these risks. Underwriting commitments constitute a charge against net capital and RCAP’s ability to make underwriting commitments may be limited by the requirement that it must at all times be in compliance with the net capital rule.

RCAP’s risk management policies and procedures, and the risk management policies and procedures of certain third parties, may leave RCAP exposed to unidentified risks or an unanticipated level of risk.

The policies and procedures RCAP employs to identify, monitor and manage risks may not be fully effective. Some methods of risk management are based on the use of observed historical market behavior. As a result, these methods may not accurately predict future risk exposures, which could be significantly greater than the historical measures indicate. Other risk management methods depend on evaluation of information regarding markets, clients or other matters that are publicly available or otherwise accessible by RCAP. This information may not be accurate, complete, up-to-date or properly evaluated. Management of operational, legal and regulatory risks requires, among other things, policies and procedures to properly record and verify a large number of transactions and events. There can be no assurance that RCAP’s policies and procedures will effectively and accurately record and verify this information.

Although RCAP has not previously experienced significant or material losses to date due to gaps in its risk management policies and procedures, its ability to manage risk exposure can never be completely or accurately predicted or fully assured. For example, unexpectedly large or rapid movements or disruptions in one or more financial markets or other unforeseen developments could have a material adverse effect on RCAP’s results of operations and financial condition. Because RCAP is a financial services holding company, it is directly affected by general economic and political conditions, world events, and broad trends in business and finance and changes in the conditions of the securities markets in which RCAP’s customers trade. The consequences of these developments can include losses due to decreases in the liquidity of trading positions, higher volatility in earnings, increases in its credit risk to clients as well as to third parties and increases in general systemic risk.

In addition, although RCAP’s agreements with third-party selling group members require them to certify that they have implemented their own appropriate risk management policies and procedures, RCAP does not independently review those third-party selling group members’ risk management policies and procedures or supervise their management of their financial advisors. Similarly, RCAP’s transfer agent business utilizes a third-party vendor to perform certain back-office transfer agency functions. Although the services agreement between RCAP’s transfer agent and the third-party vendor establishes minimum standards of performance for the vendor, including risk management policies and procedures, RCAP does not review these risk management policies and procedures.

RCAP’s risk management policies and procedures may not identify potential risks in the operations of its distribution partners or third-party vendors which could impact its business.

Following the completion of the recent and pending acquisitions, RCAP’s risk management policies and procedures will also need to monitor operational, legal and regulatory risk of the independent broker-dealer and investment adviser subsidiaries of the acquired businesses, including ICH, which will continue to operate independently under their existing brands and management, and their financial advisors, most of whom will operate from independent offices. As a result, RCAP will face an increased risk that RCAP’s risk management policies and procedures will not be fully effective or adequate to prevent material losses.

Realty Capital Securities is subject to risks that are particular to its role as dealer manager for direct investment program offerings.

In connection with its role as dealer manager for direct investment program offerings, Realty Capital Securities provides substantial promotional support to the broker-dealers selling a particular offering, including by providing sales literature, forums, webinars, press releases and other forms of mass communication. Due to the volume of materials that Realty Capital Securities may provide throughout the course of an offering, much of which may be scrutinized by regulators, Realty Capital Securities may be exposed to significant liability

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under federal and state securities laws, and subject to fines by the SEC, FINRA and state securities regulators, or even suspension from the securities industry.

Failure to comply with the net capital requirements could subject RCAP to sanctions imposed by the SEC or FINRA.

Realty Capital Securities and the broker-dealer subsidiaries of Cetera are, and any other broker-dealer acquired by RCAP (including ICH’s broker-dealer subsidiary) will be, required to maintain certain levels of minimum net capital subject to the SEC’s net capital rule. The net capital rule is designed to measure the general financial integrity and liquidity of a broker-dealer. Compliance with the net capital rule limits those operations of broker-dealers that require the intensive use of their capital, such as underwriting commitments and principal trading activities. The rule also limits the ability of securities firms to pay dividends or make payments on certain indebtedness, such as subordinated debt, as it matures. FINRA may enter the offices of a broker-dealer at any time, without notice, and calculate the firm’s net capital. If the calculation reveals a deficiency in net capital, FINRA may immediately restrict or suspend certain or all the activities of a broker-dealer. Realty Capital Securities and the broker-dealer subsidiaries of Cetera are, and any other broker-dealer acquired by RCAP (including ICH’s broker-dealer subsidiary), may not be able to maintain adequate net capital, or its net capital may fall below requirements established by the SEC, and may subject RCAP to disciplinary action in the form of fines, censure, suspension, expulsion or the termination of business altogether. In addition, if these net capital rules are changed or expanded, or if there is an unusually large charge against net capital, operations that require the intensive use of capital would be limited. A large operating loss or charge against net capital could adversely affect RCAP’s ability to expand or even maintain its present levels of business, which could have a material adverse effect on RCAP’s business. In addition, RCAP may become subject to net capital requirements in other foreign jurisdictions in which it currently operates or which it may enter. RCAP cannot predict its future capital needs or its ability to obtain additional financing.

RCAP’s business could be adversely affected by a downturn in the financial markets.

RCAP’s business is materially affected by conditions in the financial markets and economic conditions generally, both in the United States and elsewhere around the world. Many factors or events could lead to a breakdown in the financial markets, including war, terrorism, natural catastrophes and other types of disasters. These types of events could cause people to begin to lose confidence in the financial markets and their ability to function effectively. If the financial markets are unable to effectively prepare for these types of events and ease public concern over their ability to function, RCAP’s revenues are likely to decline and its operations are likely to be adversely affected.

Unfavorable financial or economic conditions may reduce the number and size of the transactions in which RCAP provides underwriting services, mergers and acquisitions consulting and other services. RCAP’s investment banking revenues, in the form of financial advisory, placement agent and underwriting fees, are directly related to the number and size of the transactions in which it participates and would therefore be adversely affected by a sustained market downturn. Additionally, a downturn in market conditions could lead to a decline in the volume of transactions that RCAP execute for its clients and, therefore, to a decline in the revenues it receives from commissions and spreads.

Market fluctuations and volatility may reduce RCAP’s revenues and profitability.

RCAP’s revenues and profitability may be adversely affected by declines in the volume of securities transactions and in market liquidity. Additionally, RCAP’s profitability may be adversely affected by losses from the underwriting of securities or the failure of third parties to meet commitments.

Lower securities price levels may also result in a reduced volume of transactions. During periods of declining volume and revenue, RCAP’s profitability would be adversely affected. Declines in market values of common stocks and the failure of issuers and third parties to perform their obligations can result in illiquid markets.

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RCAP faces competition from other financial firms.

RCAP competes directly with national and regional full-service broker-dealers and a broad range of other financial services firms, including banks, investment advisers and insurance companies. Competition has increased as smaller securities firms have either ceased doing business or have been acquired by or merged into other firms. Mergers and acquisitions have increased competition from these firms, many of which have significantly greater financial, technical, marketing and other resources than RCAP does. Many of these firms offer their clients more products and research than RCAP does. These competitors may be able to respond more quickly to new or changing opportunities, technologies and client requirements. These competitors may have lower costs or provide more services, and they may offer their clients more favorable commissions, fees or other terms than those offered by RCAP. The acquired businesses are subject to similar competition.

If RCAP does not continue to develop and enhance its services in a timely manner, its business may be harmed.

RCAP’s future success will depend on its ability to develop and enhance its services and add new services. RCAP operates in a very competitive industry in which the ability to develop and deliver advanced services through the Internet and other channels is a key competitive factor. There are significant risks in the development of new or enhanced services, including the risks that RCAP will be unable to effectively use new technologies, adapt its services to emerging industry or regulatory standards or market new or enhanced services.

If RCAP is unable to develop and introduce new or enhanced services quickly enough to respond to market or client requirements or to comply with emerging industry standards, including regulatory standards, or if these services do not achieve market acceptance, RCAP’s business could be seriously harmed.

RCAP faces significant competition for wholesalers.

RCAP is dependent upon employees who recruit and manage retail broker-dealers for the offerings of direct investment programs for which Realty Capital Securities serves as dealer manager, whom we refer to as wholesalers. RCAP is exposed to the risk that wholesalers could leave or decide to affiliate with one of its competitors and that RCAP would be unable to recruit suitable replacements. A loss of a large group of wholesalers could have a material adverse impact on Realty Capital Securities’ business.

Providing transaction management services involves providing services that meet the legal needs of RCAP’s clients and, as a result, RCAP is subject to a variety of complex and evolving laws and regulations.

Providing transaction management services involves providing services that meet the legal needs of clients, which may subject RCAP to allegations of unauthorized practice of law, or UPL. UPL generally refers to an entity or person giving legal advice who is not licensed to practice law. However, laws and regulations defining UPL, and the governing bodies that enforce UPL rules, differ among the various jurisdictions in which RCAP operates. RCAP is unable to acquire a license to practice law in the United States, or employ licensed attorneys to provide legal advice to its clients, because RCAP does not meet the regulatory requirement of being exclusively owned by licensed attorneys. RCAP also may be subject to laws and regulations that govern business transactions between attorneys and non-attorneys, including those related to the ethics of attorney fee-splitting and the corporate practice of law. RCAP may incur costs associated with responding to, defending and settling proceedings related to UPL, and the provision of services more generally. There can be no assurance that RCAP will prevail in such regulatory inquiries, claims, suits and prosecutions on commercially reasonable terms or at all. Responding to, defending and/or settling regulatory inquiries, claims, suits and prosecutions may be time-consuming and divert management and financial resources or have other adverse effects on RCAP’s business. A negative outcome in any of these proceedings may result in changes to or discontinuance of some of RCAP’s services, potential liabilities or additional costs that could have a material adverse effect on RCAP’s business, results of operations, financial condition and future prospects.

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Internet and internal computer system failures or security breaches could damage RCAP’s reputation and harm its business.

A portion of RCAP’s business is conducted through the Internet and through its internal computer system, either of which could experience system failures and degradations in the future due to circumstances beyond RCAP’s control, which include, but are not limited to:

Any of these events could have a material adverse effect on RCAP’s financial condition and results of operations.

Failure to adequately protect the integrity of RCAP’s computer systems and safeguard the transmission of confidential information could harm its business.

The secure transmission of confidential information over public networks is a critical element of RCAP’s operations. RCAP relies on encryption and authentication technology to provide the security and authentication necessary to effect secure transmission of confidential information over the Internet. There can be no assurance that advances in computer capabilities, new discoveries in the field of cryptography or other events or developments will not result in a compromise of the technology or other algorithms used by RCAP’s vendors and RCAP to protect client transaction and other data. Any compromise of RCAP’s systems or security could harm its business.

RCAP’s brands may not achieve broad recognition.

RCAP believes that broader recognition and positive perception of its brands, the brands of its operating subsidiaries, and the brands of the acquired businesses or any other businesses it or they may acquire are essential to RCAP’s future success. RCAP’s successful positioning of its brands will depend in a large part on the success of advertising and promotional efforts, an increase in the number of users and page views of its websites, and the ability to continue to provide a website and services useful to clients. Accordingly, RCAP intends to continue to pursue an aggressive brand enhancement strategy, which includes multimedia advertising, promotional programs and public relations activities. These initiatives require significant expenditures. If RCAP’s brand enhancement strategy is unsuccessful, these expenses may never be recovered and RCAP may be unable to increase future revenues.

The preservation and enhancement of the brands of the acquired businesses is essential to their future success. Following the completion of the recent and pending acquisitions, the acquired businesses will continue to be operated independently under their own brands and management, subject to RCAP’s oversight. Any failure of the brand enhancement strategy or other marketing efforts of any of the acquired businesses could have an adverse impact on RCAP.

A failure to protect its reputation could adversely affect RCAP’s businesses.

RCAP’s ability to attract and retain clients, investors, employees and financial advisors is highly dependent upon external perceptions of RCAP and its operating subsidiaries. Damage to RCAP’s reputation could cause significant harm to its business and prospects and may arise from numerous sources, including litigation or regulatory actions, failing to deliver minimum standards of service and quality, compliance failures, any perceived or actual weakness in its financial strength or liquidity, unethical behavior and the misconduct of employees, financial advisors and counterparties. Negative perceptions or publicity regarding these matters could damage RCAP’s reputation among existing and potential clients, investors, employees and

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financial advisors. Adverse developments with respect to the securities industry may also, by association, negatively impact RCAP’s reputation or result in greater regulatory or legislative scrutiny or litigation against RCAP.

The preservation of the reputations for independence of Cetera, as well as the other acquired businesses, including ICH, that will make up RCAP’s independent retail advice platform will also be important to RCAP’s future success. Following the completion of the recent and pending acquisitions the acquired businesses will continue to be operated independently under their own brands and management, subject to RCAP’s oversight. Currently, the acquired businesses which will comprise RCAP’s independent retail advice platform offer interests in direct investment programs and other products sponsored by American Realty Capital, and RCAP expects they will continue to do so following the completion of the acquisition by RCAP. There is a risk that continuing, or increasing, this level of sales following the completions of their acquisitions by RCAP could affect the acquired businesses’ reputations for independence, which could adversely affect RCAP’s results of operations.

Risks Related to the Securities Industry

RCAP and ICH are subject to various risks associated with the securities industry.

RCAP and ICH are subject to uncertainties that are common in the securities industry. These uncertainties include:

As a result, revenues and earnings may vary significantly from quarter to quarter and from year to year. In periods of low volume, profitability is impaired, because certain expenses remain relatively fixed. In the event of a market downturn, the business of RCAP or ICH could be adversely affected in many ways. The revenues of RCAP or ICH are likely to decline in such circumstances and, if RCAP or ICH is unable to reduce expenses at the same pace, its profit margins would erode.

Broker-dealers and other financial services firms are subject to extensive regulations and increased scrutiny.

The financial services industry is subject to extensive regulation by U.S. federal, state and international government agencies, as well as various self-regulatory agencies. Recent turmoil in the financial markets has contributed to significant rule changes, heightened scrutiny of the conduct of financial services firms and increasing penalties for rule violations. RCAP and ICH may be adversely affected by new laws or rules or changes in the interpretation of existing rules or more rigorous enforcement. Significant new rules are developing under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act. Some of these rules could impact the businesses of RCAP or ICH, including through the potential implementation of a more stringent fiduciary standard for brokers and enhanced regulatory oversight over incentive compensation.

RCAP or ICH also may be adversely affected by other evolving regulatory standards, such as those relating to suitability and supervision. Legal claims or regulatory actions against RCAP or ICH also could have adverse financial effects on RCAP or ICH or harm its reputation, which could harm its business prospects.

Realty Capital Securities and the broker-dealer subsidiaries of Cetera are, and any acquired broker-dealer will be, registered as a broker-dealer under the Exchange Act and a member of FINRA, and subject to regulation, examination and supervision by the SEC, FINRA, other self-regulatory organizations and state

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securities regulators. Broker-dealers are subject to regulations that cover all aspects of the securities business, including sales practices, use and safekeeping of clients’ funds and securities, capital adequacy, record-keeping and the conduct and qualification of officers, employees and independent contractors. As part of the regulatory process, broker-dealers and investment advisers are subject to periodic examinations by the SEC, the purpose of which is to determine their compliance with securities laws and regulations. Broker-dealers are also subject to routine and for-cause examinations by FINRA. It is not uncommon for the regulators to assert, upon completion of an examination, that the broker-dealer being examined has violated certain of these rules and regulations. Depending on the nature and extent of the violations, the broker-dealer may be required to pay a fine and/or be subject to other forms of disciplinary action. Additionally, the adverse publicity arising from the imposition of sanctions could harm the reputation of RCAP or ICH and cause it to lose existing clients or fail to gain new clients.

The SEC and self-regulatory organizations, such as FINRA, have the authority to bring administrative proceedings against firms under their jurisdiction, whether arising out of examinations or otherwise, for violations of the securities laws. Administrative sanctions can include cease-and-desist orders, censure, fine, civil monetary penalties and disgorgement and may even result in the suspension or expulsion of the firm from the securities industry. In June 2013, Realty Capital Securities entered into a Letter of Acceptance, Waiver and Consent, or AWC, with FINRA that included findings that certain violations of SEC and FINRA rules, including Rule 10b-9 under the Exchange Act and FINRA Rule 2010, had occurred in connection with its activities as a co-dealer manager for a public offering, as further described under “RCS Capital Corporation — Our Existing Businesses — Wholesale Distribution — Legal Proceedings.”

Similar sanctions may be imposed upon officers, directors, representatives and employees. Judicial proceedings also may be initiated by the SEC or state regulators where the misconduct warrants such action and may result in injunctive relief, civil monetary penalties, disgorgement and other sanctions.

Financial services firms are subject to numerous conflicts of interest or perceived conflicts of interest. The SEC and other federal and state regulators have increased their scrutiny of potential conflicts of interest. RCAP has adopted, and regularly reviews and updates, various policies, controls and procedures to address or limit actual or perceived conflicts. However, appropriately addressing conflicts of interest is complex and difficult and RCAP’s reputation could be damaged if it fails, or appears to fail, to appropriately address conflicts of interest. RCAP’s policies and procedures to address or limit actual or perceived conflicts may also result in increased costs and additional operational personnel. Failure to adhere to these policies and procedures may result in regulatory sanctions or litigation against RCAP.

Financial services firms are also subject to rules and regulations relating to the prevention and detection of money laundering. The USA PATRIOT Act of 2001, or the PATRIOT Act, mandates that financial institutions, including broker-dealers and investment advisers, establish and implement anti-money laundering, or AML, programs reasonably designed to achieve compliance with the Bank Secrecy Act of 1970 and the rules thereunder. Financial services firms must maintain AML policies, procedures and controls, designate an AML compliance officer to oversee the firm’s AML program, implement appropriate employee training and provide for annual independent testing of the program. RCAP has established AML programs but there can be no assurance of the effectiveness of these programs. Failure to comply with AML requirements could subject RCAP to disciplinary sanctions and other penalties.

Financial services firms must also comply with applicable privacy and data protection laws and regulations, including SEC Regulation S-P and applicable provisions of the 1999 Gramm-Leach-Bliley Act, the Fair Credit Reporting Act of 1970 and the 2003 Fair and Accurate Credit Transactions Act. Any violations of laws and regulations relating to the safeguarding of private information could subject us to fines and penalties, as well as to civil action by affected parties.

As owner of the acquired businesses, and any future additional acquired business, RCAP may be exposed to regulatory, compliance and legal risks that are in addition to, and may be different, from those RCAP currently faces.

In the same manner as Realty Capital Securities, the registered broker-dealer or investment adviser subsidiaries of Cetera, ICH and the other acquired businesses must comply with applicable regulations or risk serious adverse consequences to their businesses. In addition, the acquired businesses engage, and any future

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additional acquired business may engage, in regulated activities that are different from those currently undertaken by the operating subsidiaries and thus will expose RCAP to different risks. The independent retail advice platform deals with retail clients through networks of financial advisors that operate through multiple separate branch offices. RCAP is now responsible for the conduct of a retail business, including the management and supervision of branch office operations and the supervision of retail activities. RCAP’s broker-dealer subsidiaries, employees and agents have significant obligations to their clients. As RCAP expands the independent retail advice platform, it will likely increase its exposure to claims, litigation and regulatory proceedings resulting from, among other things, alleged and actual errors and omissions, breach of fiduciary or other duties owed to clients, or misconduct in effecting securities transactions, rendering investment advice or placing insurance, and criminal misconduct.

The registered broker-dealer or investment adviser subsidiaries of Cetera, ICH and the other acquired businesses will also be engaged in the sale of certain products that are different from those currently sold by Realty Capital Securities, such as insurance products, including annuities and life insurance. Significant risk management and supervisory systems and controls and surveillance protocols are required to oversee these businesses. To the extent that its systems and controls are ineffective in assuring compliance with applicable laws, rules and regulations, RCAP could be exposed to significant regulatory sanctions.

The SEC, state securities regulators and industry self-regulatory organizations, including FINRA, vigorously enforce the broad panoply of regulations that govern the conduct of RCAP’s business and the businesses of Cetera and the other acquired businesses. Firms and individuals who violate these regulations may be subject to disciplinary action. For example, FINRA filed 1,535 new disciplinary actions in 2013. In some cases, rule violations may also result in criminal proceedings. Certain of the acquired businesses, including ICH, and/or their financial advisors have responded to civil and/or criminal investigations. Some of these investigations have resulted in fines, settlements and orders to pay restitution. Other investigations are ongoing.

For example, during March 2014, a broker-dealer subsidiary of ICH entered into an AWC with FINRA. Without admitting or denying the findings, the broker-dealer subsidiary of ICH accepted and consented to FINRA’s findings that: (i) from about June 2009 through April 2011, the broker-dealer subsidiary of ICH failed to provide prospectuses to customers who purchased ETFs, (ii) the broker-dealer subsidiary of ICH failed to establish, maintain and enforce an adequate supervisory system, including WSPs, concerning the sale of ETFs and its obligations to provide ETF prospectuses to customers, and (iii) by reason of the foregoing, the broker-dealer subsidiary of ICH acted in contravention of Section 5(b)(2) of the Securities Act and thereby violated FINRA Rule 2010, and also violated NASD Conduct Rule 3010. The broker-dealer subsidiary of ICH also consented to a censure and a $100,000 fine.

In performing due diligence in connection with one of the pending acquisitions (other than ICH), which we refer to as the acquisition target, RCAP became aware that the SEC Staff’s 2011 examination of the acquisition target remains open. The Staff of the Division of Investment Management has asserted, among other things, various potential violations by the acquisition target of the anti-fraud provisions of the federal securities laws, including Section 206 of the Advisers Act, Section 34(b) of the Investment Company Act, Section 10(b) of the Exchange Act and Section 17(a) of the Securities Act. RCAP understands that the Staff of the Division of Investment Management has referred the examination findings to the SEC’s Division of Enforcement, or the Enforcement Division, and that the Enforcement Division’s review of the issues is ongoing and has not been concluded. RCAP has reviewed the examination findings and has determined to continue with the acquisition of the acquisition target. RCAP is not in a position to assess the likelihood or severity of any adverse action by the Enforcement Division against the acquisition target; however, if enforcement proceedings are brought against the acquisition target, there can be no assurance that subsequent developments would not result in material financial harm or material reputational harm to RCAP.

While each of the acquired businesses maintains insurance designed to lessen the cost of defending and/or settling covered matters and paying fines imposed, these insurance policies have limitations and deductibles, do not cover all matters and do not fully insulate the acquired businesses from costs on covered matters. There can be no assurance that the findings of any government or regulatory agency will not result in

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subjecting RCAP (and possibly certain of its principals and/or financial advisors) to some form of disciplinary action, including fines, censures, limitations on activities or other civil or criminal sanctions.

The independent retail advice platform will include subsidiaries that are SEC-registered investment advisers, which are subject to different compliance and oversight regimes than SEC-registered broker-dealers.

The SEC oversees all activities of registered investment advisers under the Advisers Act. Subsidiaries of the acquired businesses that are registered as investment advisers with the SEC will be subject to the requirements of the Advisers Act, including examination by the SEC’s staff. Such requirements relate to, among other things, fiduciary duties to clients, performance fees, maintaining an effective compliance program, solicitation arrangements, conflicts of interest, advertising, limitations on agency cross and principal transactions between the adviser and advisory clients, recordkeeping and reporting requirements, disclosure requirements and general anti-fraud provisions.

The SEC is authorized to institute proceedings and impose sanctions for violations of the Advisers Act, ranging from fines and censure to termination of an investment adviser’s registration. Investment advisers also are subject to certain state securities laws and regulations. Failure to comply with the Advisers Act or other federal and state securities and regulations could result in investigations, sanctions, profit disgorgement, fines or other similar consequences.

RCAP relies on direct investment programs for a substantial portion of its revenues.

During the period from 2008 to 2013, a substantial portion of RCAP’s revenues came from services provided to direct investment programs, and it is anticipated that a substantial portion of RCAP’s revenues will come from direct investment programs in the future as well. On a pro forma basis assuming the completion of the recent and pending acquisitions during the year ended December 31, 2013, approximately 31% of RCAP’s revenues would have come from services provided to direct investment programs and 10% of the revenues of the acquired businesses would have come from sales of interests in direct investment programs. Its exposure to direct investment programs leaves RCAP vulnerable to adverse developments including, but not limited to:

More particularly, recent scrutiny from FINRA, the SEC and state securities regulators has caused, and could continue to cause, negative publicity about direct investment programs.

In 2011, FINRA filed a complaint against a broker-dealer charging it, among other things, with soliciting investors to purchase non-traded REIT shares without fully investigating suitability, and for marketing non-traded REITs on its website with misleading returns. On October 22, 2012, the case was settled and FINRA ordered the broker-dealer to pay approximately $12.0 million in restitution to affected clients, and to clients who were charged excessive markups. The founder of the broker-dealer was personally fined $250,000 and suspended for one year from the securities industry and two years from acting as a principal.

On November 22, 2011, FINRA entered into a settlement with a second broker-dealer for using misleading, unwarranted or exaggerated marketing materials in the sale of a non-traded REIT. The broker-dealer was ordered to pay a fine of $300,000, and has neither admitted nor denied the charges.

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On December 12, 2012, the Massachusetts Securities Division, or the Division, filed an administrative complaint against a third broker-dealer, accusing it of violating Massachusetts securities laws in the sale of non-traded REIT shares. On February 6, 2013, the Division and the broker-dealer entered into a consent order that required, among other things, a $2.0 million payment by the broker-dealer to Massachusetts investors, payment of a $500,000 fine and an agreement by the broker-dealer to reform its selling practices. On May 22, 2013, the Division announced settlements with five broker-dealers requiring them to make $6.0 million in restitution to investors and pay fines totaling $975,000 over the improper sale of shares of non-traded REITs.

The proceedings outlined above, none of which involved RCAP or its affiliates, have received substantial publicity, much of it negative. In addition, both the SEC and FINRA issued bulletins in 2011 and 2012, respectively, urging investors to conduct careful reviews before investing in non-traded REITs, which has also generated negative publicity.

An adverse development relating to direct investment programs, including but not limited to negative publicity or any of the foregoing, could reduce RCAP’s sources of revenue and negatively impact the market price of RCAP Class A common stock.

RCAP’s ability to raise capital in a timely manner in the amount that may be required and effect changes in ownership, including through the exchange transactions, is limited by the operation of Rule 1017.

Rule 1017 requires that any member of FINRA file an application for approval of any change in ownership that would result in one person or entity directly or indirectly owning or controlling 25% or more of member firm’s equity capital. The application must be filed at least 30 days prior to effecting a change. The approval process under Rule 1017 can take six months or more to complete.

The required FINRA process under Rule 1017, including the required 30-day notice period before effecting a change in ownership, could hinder or delay RCAP in any effort to raise capital, where, as a result of the capital raised, any person or entity would own or control 25% of more of any of RCAP’s broker-dealer subsidiaries.

Realty Capital Securities has filed a Continuing Membership Application, or the CMA, under Rule 1017 requesting, among other things, FINRA’s approval of the change in its equity ownership resulting from the exchange transactions. Rule 1017 permits such a change in ownership to occur prior to the CMA’s approval so long as the CMA is filed at least 30 days prior to the ownership change. While RCAP may effect a change in ownership 30 days after submitting notice to FINRA, FINRA may place interim restrictions on RCAP pending final approval. The exchange transactions closed before the expiration of the 30-day notice period, but Realty Capital Securities notified FINRA before the closing of the exchange transactions. The CMA is still pending and there can be no assurance that FINRA will ultimately approve the CMA.

A denial of the CMA could result in an unwinding of the exchange transactions or Realty Capital Securities withdrawing its broker-dealer registration, either of which could have a material adverse effect on RCAP’s business, results of operations or future prospects. A denial of any other application RCAP has made under Rule 1017 could also have a material adverse effect on us.

Difficult market conditions for investment products can adversely affect RCAP’s business.

Demand for investment products, such as direct investment programs and mutual funds, is materially affected by conditions in the global financial markets and economic conditions throughout the world. The future market and economic climate may deteriorate because of many factors beyond RCAP’s control, including rising interest rates, the rate of inflation, currency exchange rates, changes in the regulatory environment, wars, acts of terrorism or political uncertainty. Difficult market and economic conditions, the level and volatility of interest rates, investor sentiment and political events have in the past adversely affected and may in the future adversely affect RCAP’s business and profitability in many ways. For example, RCAP’s revenues are directly related to the volume and value of investment banking and brokerage transactions in which RCAP is involved. Furthermore, rising interest rates may have an adverse impact on the performance of direct investment programs as discussed under “— Risks Related to RCAP’s Existing Businesses — Increases in interest rates, by potentially adversely impacting the performance of direct investment programs, including net lease programs, may negatively impact RCAP.” During periods of unfavorable market or economic

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conditions, the volume and size of these transactions may decrease, thereby reducing the demand for RCAP’s services and increasing price competition among financial services companies seeking available engagements. RCAP’s results of operations would also be adversely affected by any reduction in the volume or size of corporate finance transactions. Similarly, weakness in equity markets and diminished trading volume of securities could adversely impact retail brokerages, which are the clients of Realty Capital Securities as well as components of the independent retail advice platform. RCAP’s profitability may also be adversely affected by the possibility that RCAP would be unable to scale back other costs quickly enough to match any decreases in revenue relating to changes in market and economic conditions.

Significantly expanded corporate governance and public disclosure requirements may result in fewer public offerings and discourage companies from engaging in capital markets transactions, which may reduce the number of investment banking opportunities available for RCAP to pursue.

Highly publicized financial scandals in recent years have led to investor concerns over the integrity of the U.S. financial markets, and have prompted the U.S. Congress, the SEC and NYSE to significantly expand corporate governance and public disclosure requirements. To the extent that private companies, in order to avoid becoming subject to these new requirements, decide to forego public offerings or elect to be listed on foreign markets, RCAP’s underwriting business may be adversely affected. In addition, provisions of Sarbanes-Oxley, the Dodd-Frank Act, and the corporate governance rules imposed by self-regulatory organizations and stock exchanges have diverted the attention of many companies away from capital markets transactions, including securities offerings and acquisition and disposition transactions. In particular, companies that either are or are planning to become public companies are incurring significant expenses in complying with the SEC reporting requirements relating to internal controls over financial reporting, and companies that disclose material weaknesses in such controls may have greater difficulty accessing the capital markets. The Dodd-Frank Act contains several provisions that will have a direct impact on the operations of RCAP’s investment banking and capital markets business. The legislation contains changes to the laws governing, among other things, Federal Deposit Insurance Corporation assessments, mortgage originations, holding company capital requirements and risk retention requirements for securitized loans. The full impact of the Dodd-Frank Act on RCAP’s business and operations will not be known for years until all of the regulations implementing the statute are written and adopted. However, the Dodd-Frank Act may have a material impact on RCAP’s operations, particularly through an increased regulatory burden and increased compliance costs. These factors, in addition to adopted or proposed accounting and disclosure changes, may have an adverse effect on RCAP’s business.

RCAP’s exposure to legal liability is significant, and damages and other costs that it may be required to pay in connection with litigation and regulatory inquiries, and the reputational harm that could result from legal action against RCAP, could adversely affect its businesses.

RCAP faces significant legal risks in connection with its businesses and, in recent years, the volume of claims and amount of damages sought in litigation and regulatory proceedings against financial institutions have been increasing. These risks include potential liability under securities or other laws for materially false or misleading statements made in connection with securities offerings and other transactions, employment claims, potential liability for advice RCAP provides to participants in strategic transactions and disputes over the terms and conditions of complex trading arrangements.

Moreover, RCAP’s role as advisor to clients on important underwriting or mergers and acquisitions transactions involves complex analysis and the exercise of professional judgment. These activities may subject RCAP to the risk of significant legal liabilities to clients and aggrieved third parties, including clients’ stockholders who could bring securities class action suits against RCAP. There can be no assurance that indemnities from clients and provisions to limit exposure to legal claims relating to its services will protect RCAP or be enforceable in all cases. As a result, RCAP may incur significant legal and other expenses in defending against litigation and may be required to pay substantial damages for settlements and adverse judgments. Substantial legal liability or significant regulatory action against RCAP’s investment banking business could harm its results of operations or harm its reputation, which could adversely affect its business and prospects.

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Employee misconduct, which is difficult to detect and deter, could harm RCAP by impairing its ability to attract and retain clients and subjecting it to significant legal liability and reputational harm.

Recently, there have been a number of highly publicized cases involving fraud or other misconduct by employees in the financial services industry, and there is a risk that RCAP’s employees could engage in misconduct that adversely affects its business. For example, RCAP often deals with confidential matters of great significance to its clients. If its employees were to improperly use or disclose confidential information provided by clients, RCAP could be subject to regulatory sanctions and suffer serious harm to its reputation, financial position, current client relationships and ability to attract future clients. It is not always possible to deter employee misconduct, and the precautions RCAP takes to detect and prevent this activity may not be effective in all cases. If RCAP’s employees engage in misconduct, its business could be adversely affected.

If RCAP were deemed an investment company under the Investment Company Act, applicable restrictions could make it impractical for it to continue its business as contemplated and could have an adverse effect on its business.

RCAP is not required to register as an investment company under the Investment Company Act, and it intends to conduct its operations so that it will not be deemed an investment company. However, if RCAP were to be deemed an investment company, restrictions imposed by the Investment Company Act, including limitations on its capital structure and its ability to transact with affiliates, could make it impractical for RCAP to continue its business as contemplated and would harm RCAP’s business and the price of RCAP Class A common stock.

Risks Related to RCAP’s Structure

The structure of RCAP Class B common stock has the effect of concentrating voting control over RCAP in RCAP Holdings and, indirectly, in those who control RCAP Holdings.

Holders of RCAP Class A common stock are entitled to one vote per share, and, so long as any of RCAP Class B common stock remains outstanding, the holders of RCAP Class B common stock always will have a majority of the voting power of outstanding RCAP common stock. RCAP Holdings, which is directly or indirectly controlled by Messrs. Schorsch and Kahane, holds the sole outstanding share of RCAP Class B common stock and thereby controls a majority of the voting power of outstanding RCAP common stock, retains effective control of the RCAP board of directors and has the ability to control all matters submitted to RCAP stockholders for approval. In addition, even if the share of RCAP Class B common stock were not outstanding, Messrs. Schorsch and Kahane, through their direct or indirect control of RCAP Holdings and RCAP Equity, LLC and Mr. Schorsch’s direct ownership of 20,000 shares of RCAP Class A common stock, would own 85.01% of the outstanding RCAP Class A common stock as of the date of this proxy statement/prospectus and would still control RCAP through their ownership of those shares.

Moreover, after giving effect to the completion of the recent and pending acquisitions (including the issuance of 11,264,929 shares of RCAP Class A common stock to RCAP Holdings as consideration in the First Allied acquisition and the estimated issuance of 1,083,890 shares of RCAP Class A common stock (based on $32.90 per share, the closing price on the NYSE on May 9, 2014) to pay consideration in the merger, the J.P. Turner acquisition and the Summit acquisition), Messrs. Schorsch and Kahane, through their direct or indirect control of RCAP Holdings and RCAP Equity, LLC and Mr. Schorsch’s direct ownership of 20,000 shares of RCAP Class A common stock, would still control 86.90% of RCAP Class A common stock. Mr. Schorsch also holds 20,000 shares of RCAP Class A common stock directly. See “Principal Stockholders.” This concentrated control will limit or preclude your ability to influence corporate matters and the individuals who control RCAP Holdings and RCAP Equity, LLC, namely Messrs. Schorsch and Kahane have the ability to control all matters affecting RCAP, including:

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If RCAP Holdings does not provide any requisite consent allowing RCAP to conduct such activities when requested, RCAP will not be able to conduct such activities and, as a result, RCAP’s business and operating results may be harmed. The individuals who control RCAP Holdings, Messrs. Schorsch and Kahane, also control RCS Capital Management, which means that these individuals may have an even greater influence over RCAP’s affairs than their control over RCAP Holdings and RCAP Equity, LLC alone would dictate.

RCAP Holdings’ ability to control the RCAP board of directors may also make it difficult for RCAP to recruit high-quality independent directors. Persons who would otherwise have accepted an invitation to join the RCAP board of directors may decline to do so, which makes the recruitment of the most qualified independent directors more difficult.

On April 29, 2014, RCAP Holdings pledged substantially all of its assets, including 12,851,999 shares of RCAP Class A common stock and the sole outstanding share of RCAP Class B common stock to secure the bank facilities. See “RCS Capital Corporation — The Recent and Pending Acquisitions — The Cetera Financings — The Bank Facilities” and “Principal Stockholders.” An event of a default under the bank facilities and operation of the pledge with respect to the sole outstanding share of RCAP Class B common stock could give rise to a change in control of RCAP.

In the event RCAP Holdings is acquired or otherwise undergoes a change of control, any acquiror or successor will be entitled to exercise the voting control and contractual rights of RCAP Holdings, and may do so in a manner that could vary significantly from that of RCAP Holdings.

Following the redemption of the sole outstanding share of RCAP Class B common stock, the concentration of ownership of RCAP Class A common stock in RCAP Holdings, RCAP Equity, LLC and Luxor could continue to limit other stockholders’ ability to influence corporate matters.

RCAP Holdings holds the sole outstanding share of RCAP Class B common stock and thereby controls a majority of the voting power of outstanding RCAP common stock, retains effective control of the RCAP board of directors and has the ability to control all matters submitted to RCAP stockholders for approval. Luxor, RCAP Holdings and the members of RCAP Holdings, have agreed to use their reasonable best efforts to cause the rights of RCAP Class B common stock to be amended to allow RCAP to redeem any outstanding RCAP Class B common stock owned by RCAP Holdings for cash although RCAP would be prohibited from doing so by the restricted payment covenant contained in the bank facilities currently in effect. Any such redemption would also be subject to RCAP obtaining the affirmative vote of those holders of Class A common stock owning a majority of the outstanding RCAP Class A common stock. Luxor currently holds convertible preferred stock and convertible notes that can be converted into newly issued shares of RCAP Class A common stock, as well as a put right with respect to its membership interest in RCS Capital Management under which, if exercised, Luxor may elect to receive consideration in the form of shares of RCAP Class A common stock, and it is also entitled to appoint at least one member to the RCAP board of directors. See “RCS Capital Corporation — The Recent and Pending Acquisitions — The Cetera Financings — The Luxor Financings — Other Agreements with Luxor.”

Giving effect to that redemption, Messrs. Schorsch and Kahane, through their direct or indirect control of RCAP Holdings and RCAP Equity, LLC and Mr. Schorsch’s direct ownership of 20,000 shares of RCAP Class A common stock, would control 85.01% of the combined voting power of RCAP through their ownership of 24,071,499 shares of RCAP Class A common stock, or 50.23% assuming conversion of the convertible preferred stock and convertible notes held by Luxor and the exercise of Luxor’s put right with

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respect to its membership interest in RCS Capital Management at the rates applicable as of May 9, 2014. Under the same assumptions, Luxor would control 40.91% of the combined voting power of RCAP through its ownership of RCAP Class A common stock. The potential for continued significant concentration of share ownership and control through Messrs. Schosch and Kahane, Luxor or all of them, acting together, may adversely affect the trading price for RCAP Class A common stock because investors often perceive disadvantages in owning stock in companies with controlling stockholders. Moreover, this concentrated voting control would have similar effects to the current concentrated voting control of Messrs. Schosch and Kahane, as described in more detail above in “— The structure of RCAP Class B common stock has the effect of concentrating voting control over RCAP in RCAP Holdings and, indirectly, in those who control RCAP Holdings.”

It may be difficult to favorably resolve any disputes that arise between RCAP and RCAP Holdings.

Disputes may arise between RCAP Holdings and RCAP in a number of areas relating to their ongoing relationships, including:

RCAP may not be able to resolve any potential conflicts, and even if RCAP does, the resolution may be less favorable than if the conflict were between two unaffiliated parties. The agreements RCAP has entered into with RCAP Holdings may only be amended upon agreement between the parties. While RCAP is controlled by RCAP Holdings, RCAP may not have the leverage to negotiate amendments to these agreements, if required, on terms as favorable to RCAP as those RCAP would negotiate with an unaffiliated third party.

RCAP has elected to take advantage of the “controlled company” exemption to the corporate governance rules for NYSE-listed companies, which could make RCAP Class A common stock less attractive to some investors or otherwise harm its stock price.

Because RCAP qualifies as a “controlled company” under the corporate governance rules for NYSE-listed companies, it is not required to have a majority of its board of directors be independent, nor is it required to have a compensation committee or an independent nominating function. In light of RCAP’s status as a controlled company, the RCAP board of directors has determined not to have an independent nominating function or to have the full board of directors be directly responsible for nominating members of the RCAP board of directors, and RCAP has elected not to have a majority of the RCAP board of directors be independent and not to have a compensation committee. Accordingly, should the interests of RCAP Holdings, RCAP’s controlling stockholder, differ from those of its other stockholders, the other stockholders may not have the same protections afforded to stockholders of companies that are subject to all the corporate governance rules for NYSE-listed companies. RCAP’s status as a controlled company could make RCAP Class A common stock less attractive to some investors or otherwise harm its stock price.

Luxor, RCAP Holdings and the members of RCAP Holdings, LLC have agreed to use their reasonable best efforts to cause the rights of RCAP Class B common stock to be amended to allow us to redeem any outstanding RCAP Class B common stock owned by RCAP Holdings for cash, but RCAP is currently prohibited from doing so by the restricted payments covenant contained in the bank facilities currently in effect. Any such redemption would also be subject to our obtaining the affirmative vote of those holders of RCAP Class A common stock owning a majority of the RAP Class A common stock. Even if RCAP is able to redeem the sole outstanding share of its RCAP Class B common stock and after giving effect to the issuances of RCAP Class A common stock expected in connection with the recent and pending acquisitions, RCAP’s

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proposed public offering and the current private offering, Messrs. Schorsch and Kahane, through their direct or indirect control of RCAP Holdings and RCAP Equity, LLC and Mr. Schorsch’s direct ownership of 20,000 shares of RCAP Class A common stock, would continue to own more than 50% of RCAP Class A common stock and RCAP would continue to qualify as a controlled company. RCAP expects it will continue to qualify as a controlled company until such time as Luxor converts a sufficient amount of its convertible preferred stock and convertible notes or other shares of RCAP Class A common stock are issued for other reasons to cause Messrs. Schorsch and Kahane to control less than 50% of outstanding RCAP Class A common stock.

RCAP is dependent on RCS Capital Management and its officers, who provide services to RCAP through the services agreement.

RCAP relies heavily on RCS Capital Management to conduct day-to-day business operations of RCAP, and to provide strategic planning and consulting services to RCAP and its operating subsidiaries. Accordingly, the success of RCAP’s businesses depends to a significant extent upon the efforts, experience, diligence, judgment, skill and network of business contacts of the officers of RCS Capital Management. The departure of any of the officers of RCS Capital Management could have a material adverse effect on RCAP’s performance and slow its future growth.

While the qualified professionals of RCAP’s operating subsidiaries generally are their direct employees and provide services for them on a full-time basis, RCS Capital Management is not obligated to dedicate any of its officers exclusively to RCAP. In addition, none of the officers of RCAP or RCS Capital Management are obligated to dedicate any specific portion of their time to RCAP’s business. Each of these individuals has significant responsibilities for other business segments currently managed by affiliates of American Realty Capital, including as a result of being part of the senior management or key personnel of other American Realty Capital-sponsored entities and their advisors. For example, six of the American Realty Capital-sponsored REITs have registration statements that became effective within the last 18 months. Additionally, two American Realty Capital-sponsored program is currently in registration. As a result, these individuals may not always be able to devote sufficient time to the management of RCAP’s business. Further, when there are turbulent conditions in the real estate markets or distress in the credit markets that affect American Realty Capital, the attention of RCS Capital Management’s principals and executive officers will also be required by the other entities and businesses managed by affiliates of American Realty Capital. In such situations, RCAP may not receive the level of support and assistance that RCAP might receive if it were internally managed.

In addition, no assurance can be given that RCS Capital Management will continue to provide services to RCAP. The initial term of the services agreement extends until June 10, 2033, with automatic five-year renewals, subject to termination by nonrenewal upon a 180-day prior written notice. If the services agreement is terminated and no suitable replacement is found to provide the services needed by RCAP under that agreement, RCAP may not be able to execute its business plan.

The services agreement was not negotiated on an arm’s-length basis and may not be as favorable as a services agreement negotiated with an unaffiliated third party.

Four of five executive officers of RCAP and five of its nine directors are also principals of RCAP Holdings and all of the executive officers of RCAP and four of its nine directors are executive officers of RCS Capital Management, all of whom are also directors and/or executive officers of American Realty Capital. The services agreement was negotiated between related parties and its terms, including amounts payable thereunder, may not be as favorable as if it had been negotiated with an unaffiliated third party.

Termination of the services agreement by RCAP without cause would be difficult to effect. During the initial term, RCAP, together with RCS Holdings, may terminate the services agreement only for cause. Effective at the expiry of the initial 20-year term or any subsequent five-year renewal term, RCAP, together with RCS Holdings, may terminate the services agreement without cause, upon the affirmative vote of at least two-thirds of the RCAP independent directors based upon: (1) RCS Capital Management’s unsatisfactory performance that is materially detrimental to RCAP; or (2) a determination that the quarterly fees, incentive fees or performance-based awards payable to RCS Capital Management are not fair, subject to RCS Capital Management’s right to prevent termination based on unfair fees or awards by accepting a reduction of

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quarterly fees, incentive fees or awards agreed to by at least two-thirds of RCAP independent directors. RCS Capital Management will be provided 180 days’ prior written notice of any such termination. These provisions may adversely affect RCAP’s ability to terminate RCS Capital Management without cause.

RCS Capital Management is not contractually committed to serve RCAP beyond June 10, 2033. Thereafter, the services agreement will be renewable for five-year terms; provided , however , that RCS Capital Management may terminate the services agreement before the end of any five-year term at will upon 180 days’ prior written notice. If the services agreement is terminated and no suitable replacement is found, RCAP may not be able to execute its business plan.

Pursuant to the services agreement, RCS Capital Management does not assume any responsibility other than to render the services called for thereunder and is not responsible for any action of the RCAP board of directors in following or declining to follow its advice or recommendations. RCS Capital Management maintains a contractual as opposed to a fiduciary relationship with RCAP. Under the terms of the services agreement, none of RCS Capital Management or any of its respective officers, members or personnel, any person controlling or controlled by RCS Capital Management or any person providing sub-advisory services to RCS Capital Management will be liable to RCAP, any subsidiary of RCAP, its directors, its stockholders or any of its subsidiaries’ stockholders or partners for acts or omissions performed in accordance with and pursuant to the services agreement, except because of acts constituting bad faith, willful misconduct or gross negligence. In addition, RCAP has agreed to indemnify RCS Capital Management and each of its officers, stockholders, members, managers, directors and personnel, any person controlling or controlled by RCS Capital Management and any person providing sub-advisory services to RCS Capital Management with respect to all expenses, losses, damages, liabilities, demands, charges and claims arising from acts or omissions of RCS Capital Management not constituting bad faith, willful misconduct or gross negligence. See “RCS Capital Corporation — RCS Capital Management and American Realty Capital — Services Agreement.”

Payment of fees to RCS Capital Management reduces cash available for business investment and stockholder distribution.

RCS Capital Management provides certain services to RCAP pursuant to a services agreement. RCS Capital Management is paid substantial fees for these services, which reduces the amount of cash available for investment in RCAP’s business or distribution to its stockholders. Such fees consist of (i) a quarterly fee; (ii) an incentive fee; and (iii) performance-based awards to RCS Capital Management under the OPP, as further described under “RCS Capital Corporation — RCS Capital Management and American Realty Capital — Services Agreement — Quarterly and Incentive Fees” and “RCS Capital Corporation — Management — 2013 Manager Multi-Year Outperformance Agreement.” Also, in the future RCAP may contract with RCAP Holdings and/or RCS Capital Management to perform other services for RCAP for which RCAP will pay additional fees. For the period from the closing of RCAP’s initial public offering on June 10, 2013 to June 30, 2013, the quarter ended September 30, 2013, the quarter ended December 31, 2013 and the quarter ended March 31, 2014, the aggregate of the quarterly and incentive fees was $0.7 million, $1.4 million, $4.2 million and $1.8 million, respectively, which accounted for 2.5%, 12.3%, 12.2% and 14.1% of RCAP’s net income for those periods, respectively. In connection with the closing of the acquisition by Luxor of an interest in RCS Capital Management, the OPP was amended, which resulted in 310,947 LTIP Units being earned as of April 28, 2014, and 1,014,053 LTIP Units being forfeited. Immediately prior to the acquisition by Luxor of an interest in RCS Capital Management, RCS Capital Management distributed its 310,947 earned LTIP Units to its then current members (who are also members of American Realty Capital and RCAP Equity, LLC), each of whom then became a member of RCS Holdings, the intermediate holding company that owns our operating subsidiaries (except for LTIP Units).

In general, RCAP and its subsidiaries are permitted to deduct all ordinary and necessary business expenses incurred in the operation of RCAP’s businesses. The quarterly fee payable by RCAP and RCS Holdings to RCS Capital Management, a related party, is allocated among RCAP and RCS Holdings based on any reasonable method determined by the RCAP independent directors, such as the relative value of the services provided during the relevant period or the relative amount of time spent by RCS Capital Management providing management services to RCAP, on the one hand, and RCS Holdings and to operating subsidiaries, on the other hand. The Internal Revenue Service, or IRS, could challenge the allocation of the quarterly fee

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among RCAP and RCS Holdings or the deductibility of the quarterly fee by RCAP or RCS Holdings if, for example, the amount of the quarterly fee is not reasonable relative to the services provided. If the deduction were successfully denied, in whole or in part, RCAP or RCS Holdings, as applicable, would compute taxable income without deducting the quarterly fee, thereby increasing taxable income (or reducing losses) despite the reduction in RCAP’s or RCS Holdings’ cash due to the payment of the quarterly fee to RCS Capital Management.

There are various conflicts of interest arising out of RCAP’s relationship with RCAP Holdings and RCS Capital Management, which could result in decisions that are not in the best interests of RCAP stockholders.

RCAP is subject to conflicts of interest arising out of its relationship with RCAP Holdings and RCS Capital Management. Specifically, Mr. Schorsch, the executive chairman of the RCAP board of directors, Mr. Kahane, RCAP’s chief executive officer and one of its directors, Mr. Budko, its executive vice president, chief investment officer and one of its directors, Mr. Block, one of its directors, and Mr. Weil, its president, treasurer, secretary and one of its directors, are executives and/or members of both RCAP Holdings and RCS Capital Management. These individuals have conflicts between their duties to RCAP and their duties to, and interests in, RCAP Holdings, RCS Capital Management and other affiliates of RCAP Holdings and RCS Capital Management, and these conflicts may not be resolved in RCAP’s favor.

Conflicts may arise with respect to the interpretation, continuation, renewal or enforcement of RCAP’s agreements with RCS Capital Management, RCAP Holdings and their affiliates, including the agreements described under “RCS Capital Corporation — Relationships and Related Party Transactions.” The resolution of any such conflict in favor or RCAP Holdings, RCS Capital Management or any of their affiliates may materially harm RCAP’s results of operations and the value of your shares of RCAP Class A common stock.

For example, RCAP has provided certain non-traded REITs sponsored by American Realty Capital, which are affiliates of RCAP Holdings, with a variety of support, advisory and other services in connection with preparation for and execution of their proposed and completed strategic transactions, namely their listings on national securities exchanges, under agreements that provide for fixed advisory fees and fixed fees due at the time of completion of the transaction. RCAP expects that it will enter into similar arrangements on similar terms with other non-traded REITs sponsored by American Realty Capital in the future. A conflict could arise over the rates that it earns under these arrangements, and RCAP could earn less under these arrangements in the future if the individuals who control the non-traded REITs sponsored by American Realty Capital and RCAP make such a determination. Similar conflicts that are not resolved in RCAP’s favor could occur in connection with the services RCAP provides to the mergers and acquisitions advisory and capital markets services it provides to other related parties.

RCAP is also subject to conflicts of interest in connection with the First Allied acquisition, under which 11,264,929 shares of RCAP Class A common stock to RCAP Holdings are issuable as consideration, based on a value of $207.5 million for the equity of First Allied and the VWAP of RCAP Class A common stock on January 15, 2014, the day prior to the announcement of the Cetera merger agreement. The value of $207.5 million for the equity of First Allied was determined as the effective original cost of $177.0 million (consisting of $145.0 million in merger consideration (including the First Allied notes) paid to the former owners of First Allied and $32.0 million in bank indebtedness of First Allied outstanding immediately following consummation of the merger), minus indebtedness (net of cash) of First Allied of $7.0 million plus a carrying cost of $37.5 million. The carrying cost represented a 21.5% cost of capital, based on an estimate of what RCAP believes a third-party investor would have earned for a similar investment. The rate used to determine the carrying cost was 21.2% which was based on the period from June 5, 2013 (the date the original First Allied merger agreement was executed and RCAP Holdings committed to make the investment) through May 31, 2014 (the expected closing date of the First Allied acquisition). The annualized rate from September 25, 2013 (the date RCAP Holdings actually made the investment when it acquired First Allied) until May 31, 2014 was 34.4%.

The value of the shares of Class A common stock to be issued by RCAP as consideration in the First Allied acquisition is $370.6 million, based on the closing price for RCAP Class A common stock of $32.90 per share on May 9, 2014. Accordingly, the effective cost to us for the First Allied acquisition will be

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$404.4 million (including $33.8 million of First Allied indebtedness and assuming a closing price for our Class A common stock of $32.90 per share on the date of consummation of the contribution), which is $227.4 million more than the effective cost to RCAP Holdings for First Allied in September 2013 under the terms of the original First Allied merger agreement. The price and terms of the First Allied acquisition may not be the same as they would be if the transaction had been negotiated at arm’s length with an unaffiliated third party. See “RCS Capital Corporation — Relationships and Related Parties — The First Allied Acquisition.”

The quarterly fees payable to RCS Capital Management under the services agreement may cause RCS Capital Management to engage in risky behavior in order to increase its compensation.

Under the services agreement, RCS Capital Management is entitled to receive (i) quarterly fees based on RCAP’s GAAP pre-tax income; and (ii) incentive fees based on RCAP’s Core Earnings, as defined under “RCS Capital Corporation — RCS Capital Management and American Realty Capital — Services Agreement.” RCS Capital Management is also entitled to receive performance-based awards based on Total Return as measured against a peer group of companies, as further described under “RCS Capital Corporation  — Management — 2013 Manager Multi-Year Outperformance Agreement.” In providing services to RCAP under the terms of the services agreement, the opportunity to earn compensation based on RCAP’s GAAP pre-tax income and based on Core Earnings may lead RCS Capital Management to place undue emphasis on the maximization of RCAP’s aggregate GAAP pre-tax income and Core Earnings at the expense of other criteria that would be beneficial to RCAP’s business, such as preservation of capital, in order to obtain more compensation. Additionally, RCS Capital Management might engage in risky or speculative behavior in order to maximize Total Return, even if such behavior might put RCAP at risk. Core Earnings is a non-GAAP measure and is defined as RCAP’s after-tax GAAP net income (loss), before the incentive fee plus non-cash equity compensation expense, depreciation and amortization, any unrealized gains, losses or other non-cash items recorded in net income for the period, regardless of whether such items are included in other comprehensive income or loss, or in net income (loss). The amount may be adjusted to include one-time events pursuant to changes in GAAP and certain other non-cash charges after discussions between RCS Capital Management and RCAP independent directors and after approval by a majority of RCAP independent directors.

RCAP is an “emerging growth company” under the federal securities laws and subject to reduced public company reporting requirements.

RCAP is an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act, or JOBS Act, and are eligible to take advantage of certain exemptions from, or reduced disclosure obligations relating to, various reporting requirements that are normally applicable to public companies. RCAP could remain an “emerging growth company” for up to five years, or until the earliest of: (1) the last day of the first fiscal year in which RCAP has total annual gross revenue of $1.0 billion or more; (2) December 31 of the fiscal year that RCAP becomes a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act (which would occur if the market value of RCAP common stock held by non-affiliates exceeds $700.0 million, measured as of the last business day of RCAP’s most recently completed second fiscal quarter, and RCAP has been publicly reporting for at least 12 months); or (3) the date on which RCAP has issued more than $1.0 billion in non-convertible debt during the preceding three-year period.

RCAP expects that, based on its pro forma revenues after giving effect to the completion of the recent and pending acquisitions, it will cease to be an “emerging growth company” on December 31, 2014.

Under the JOBS Act, “emerging growth companies” are not required to (1) provide an auditor’s attestation report on management’s assessment of the effectiveness of internal control over financial reporting, pursuant to Section 404 of Sarbanes-Oxley; (2) comply with new requirements adopted by the Public Company Accounting Oversight Board, or the PCAOB, which may require mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor must provide additional information about the audit and the issuer’s financial statements; (3) comply with new audit rules adopted by the PCAOB after April 5, 2012 (unless the SEC determines otherwise); (4) provide certain disclosures relating to executive compensation generally required for larger public companies; or (5) hold stockholder advisory votes on executive compensation. RCAP has elected to take advantage of several of the JOBS Act exemptions that are applicable to RCAP. To the extent RCAP has availed itself of any exemptions from various reporting

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requirements, it may be more difficult for investors and securities analysts to evaluate RCAP and RCAP does not know if some investors will find shares of RCAP Class A common stock less attractive as a result, which may result in a less active trading market for shares of RCAP Class A common stock or a more volatile stock price.

Additionally, the JOBS Act provides that an “emerging growth company” may take advantage of an extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies. This means that an “emerging growth company” can delay adopting certain accounting standards until such standards are otherwise applicable to private companies. However, RCAP has elected to “opt out” of such extended transition period, and will therefore comply with new or revised accounting standards on the applicable dates on which the adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that RCAP’s decision to opt out of such extended transition period for compliance with new or revised accounting standards is irrevocable.

Any material weaknesses in RCAP’s internal controls may impede its ability to produce timely and accurate financial statements, which could cause it to fail to file its periodic reports timely, result in inaccurate financial reporting or restatements of its financial statements, subject RCAP stock to delisting and materially harm RCAP’s business, results of operations, financial condition and the price of RCAP Class A common stock. RCAP has had several significant deficiencies in its internal control over financial reporting identified.

As a public company, RCAP is required to file annual and quarterly periodic reports containing its financial statements with the SEC within prescribed time periods. As part of the NYSE listing requirements, RCAP is also required to provide periodic reports, or make them available, to its stockholders within prescribed time periods. RCAP may not be able to produce reliable financial statements or file these financial statements as part of a periodic report in a timely manner with the SEC or comply with NYSE listing requirements. In addition, RCAP could make errors in its financial statements that could require it to restate its financial statements. If RCAP is required to restate its financial statements in the future for any reason, any specific adjustment may be adverse and may cause RCAP’s results of operations and financial condition, as restated, to be materially adversely impacted. As a result, RCAP could be the subject of adverse publicity, stockholder lawsuits and investigations and sanctions by regulatory authorities, such as the SEC. Any of the above consequences could cause the price of RCAP Class A common stock to decline and could impose significant unanticipated costs on RCAP.

However, for as long as RCAP remains an “emerging growth company,” as defined in the JOBS Act, RCAP intends to take advantage of the exemption from the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or Sarbanes-Oxley Act, which is applicable to other public companies. See “— RCAP is an “emerging growth company” under the federal securities laws and subject to reduced public company reporting requirements.”

RCAP expects that, based on its pro forma revenues after giving effect to the completion of the recent and pending acquisitions, it will cease to be an “emerging growth company” on December 31, 2014. Once RCAP ceases to be an “emerging growth company,” as of each fiscal year end thereafter, its independent registered public accounting firm will be required to evaluate and report on its internal controls over financial reporting in the event it is an accelerated filer or large accelerated filer. To the extent RCAP finds material weaknesses in its internal controls, it may determine that it has ineffective internal controls over financial reporting as of any particular fiscal year end, and it may receive an adverse assessment of its internal controls over financial reporting from its independent registered public accounting firm. Moreover, any material weaknesses or other deficiencies in its internal controls may delay the conclusion of an annual audit or a review of RCAP’s quarterly financial results. From time to time, RCAP has had significant deficiencies in its internal control over financial reporting. While no such deficiency, individually or in the aggregate, has resulted in a material weakness to date, any significant deficiency that is not remediated could, on its own or in combination with other significant deficiencies, give rise to a material weakness.

If RCAP is not able to issue our financial statements in a timely manner, or if RCAP is not able to obtain the required audit or review of RCAP’s financial statements by its independent registered public accounting firm in a timely manner, RCAP will not be able to comply with the periodic reporting requirements of the

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SEC and the listing requirements of the NYSE. If these events occur, the listing of RCAP Class A common stock on the NYSE could be suspended or terminated and the price of RCAP Class A common stock could materially suffer. In addition, RCAP could be subject to investigation and sanction by the SEC and other regulatory authorities and to stockholder lawsuits, which could impose significant additional costs on RCAP, divert management attention and materially harm RCAP’s business, results of operations, financial condition and the price of RCAP Class A common stock.

RCAP would be required to pay to RCAP Holdings most of the tax benefit of any depreciation or amortization deductions RCAP may claim as a result of any step up in tax basis RCAP would receive if the exchange by RCAP Holdings of substantially all of its Operating Subsidiaries Units is characterized as a taxable exchange.

If the exchange by RCAP Holdings of substantially all of its Operating Subsidiaries Units for shares of RCAP Class A common stock (and cancellation of its corresponding shares of RCAP Class B common stock) through the exchange transactions qualifies as a tax-free contribution to RCAP under Section 351 of the Code, RCAP would obtain carryover tax basis in the tangible and intangible assets of Realty Capital Securities, RCS Advisory and ANST connected with such Operating Subsidiaries Units. Accordingly, RCAP would not be required to make any payments under the tax receivable agreement RCAP has entered into with RCAP Holdings.

However, if this exchange were treated as a taxable transaction, each of Realty Capital Securities, RCS Advisory and ANST intends to have an election under Section 754 of the Code which would result in RCAP receiving a step up in the tax basis in the tangible and intangible assets of its operating subsidiaries with respect to such Operating Subsidiaries Units acquired by RCAP in such exchanges. The increase in tax basis would be expected to reduce the amount of tax that RCAP would otherwise be liable for in the future. Pursuant to the tax receivable agreement RCAP has entered into with RCAP Holdings, RCAP would be required to pay RCAP Holdings 85% of the amount of the reduction, if any, in U.S. federal, state and local income tax liabilities that RCAP realizes as a result of this increase in tax basis resulting from the exchange. The amount and timing of any payments under the tax receivable agreement would vary depending on a number of factors, including the extent to which the exchange is taxable, the amount and timing of income and the tax rates then applicable to RCAP. See “RCS Capital Corporation — Relationships and Related Party Transactions — Tax Receivable Agreement.”

Risks Related to RCAP Class A Common Stock

The market price and trading volume of RCAP Class A common stock may be volatile, which could result in rapid and substantial losses for RCAP Class A stockholders.

The market price of RCAP Class A common stock may be volatile and could be subject to wide fluctuations. In addition, the trading volume on RCAP Class A common stock may fluctuate and cause significant price variations to occur. If the market price of RCAP Class A common stock declines significantly, you may be unable to resell your shares of RCAP Class A common stock at or above the price that was used in calculating the stock portion of the merger consideration in connection with the merger, if at all. There can be no assurance that the market price of RCAP Class A common stock will not fluctuate or decline significantly in the future. Some of the factors that could negatively affect the price of RCAP Class A common stock, or result in fluctuations in the price or trading volume of Class A common stock, include:

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Public perceptions of the actual or expected risks or benefits of the recent and pending acquisitions could also affect the price of RCAP Class A common stock. If RCAP does not achieve the perceived benefits of the recent and pending acquisitions as rapidly or to the extent anticipated by financial or industry analysts, or the effect of the recent and pending acquisitions on RCAP’s financial results is otherwise not consistent with the expectations of financial or industry analysts, the market price of RCAP Class A common stock may decline as a result of the pending acquisitions. Similarly, uncertainty about the completion of the recent and pending acquisitions, which are subject to conditions, may also affect the market price of RCAP Class A common stock.

Future sales of RCAP Class A common stock in the public market or future issuances in connection with acquisitions of businesses, including as consideration in the merger, could lower the market price of RCAP Class A common stock.

The market price of RCAP Class A common stock could decline as a result of sales of a large number of shares of RCAP Class A common stock by RCAP Holdings, or the perception that such sales could occur. RCAP has also filed with the SEC a Registration Statement on Form S-1 related to RCAP’s proposed public offering and the concurrent private offering. Sales and issuances of RCAP Class A common stock may also occur in connection with the issuance of 11,264,929 million shares of RCAP Class A common stock to RCAP Holdings as consideration in the First Allied acquisition and the issuance of an estimated 1,083,890 additional shares of RCAP Class A common stock to pay consideration at the completion of the Summit acquisition, the merger and the J.P. Turner acquisition (based on the market price of RCAP Class A common stock as of May 9, 2014, or $32.90 per share), which, collectively, would constitute 44% of RCAP currently outstanding RCAP Class A common stock. These sales or issuances, or the possibility that these sales or issuances may occur, also might make it more difficult for RCAP to raise additional capital by selling equity securities in the future, at a time and price that RCAP deems appropriate.

Pursuant to the registration rights agreement entered into with RCAP Holdings and RCS Capital Management, RCAP has agreed to use its reasonable best efforts to file registration statements from time to time for the sale of the shares of RCAP Class A common stock, including RCAP Class A common stock which was issued in connection with the exchange transactions and any equity-based awards granted to RCS Capital Management under the RCAP equity plan. See “RCS Capital Corporation — Relationships and Related Party Transactions — Registration Rights Agreement.”

RCAP has also agreed to file with the SEC a continuously effective resale registration statement for the shares of RCAP Class A common stock issued to Luxor in the concurrent private offering and for the shares of RCAP Class A common stock issuable upon conversion of the convertible preferred stock and the convertible notes issued to Luxor in connection with the Cetera financings on or prior to June 13, 2014. See “The Recent and Pending Acquisitions — The Cetera Financings — The Luxor Financings — Other Agreements with Luxor — Registration Rights.” Following the effectiveness of these registration statements, 18,992,474 shares of RCAP Class A common stock owned by Luxor or underlying securities convertible at the election of Luxor will be eligible for future sale upon conversion.

There can be no assurance as to the size or price of future issuances of RCAP Class A common stock or the effect, if any, that future issuances and sales of shares of RCAP Class A common stock may have on the market price of RCAP Class A common stock. Sales or distributions of substantial amounts of RCAP Class A

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common stock (including shares issued in connection with an acquisition), or the perception that such sales could occur, may cause the market price of RCAP Class A common stock to decline.

You will suffer dilution in connection with future issuances of RCAP Class A common stock.

Any public or private offerings of RCAP Class A common stock could dilute your ownership in RCAP as well as any additional capital raised by RCAP through the sale of equity or convertible securities or any equity or convertible securities issued as consideration in future acquisitions. Significant dilution to existing stockholders will also occur in connection with the issuance of 11,264,929 shares of RCAP Class A common stock to RCAP Holdings as consideration in the First Allied acquisition on the issuance of an estimated 1,083,890 additional shares of RCAP Class A common stock to pay consideration at the completion of the merger, the Summit acquisition and the J.P. Turner acquisition (based on the market price of RCAP Class A common stock as of May 9, 2014, or $32.90 per share), which, collectively, would constitute 44% of the currently outstanding RCAP Class A common stock. These issuances will also increase the number of shares that may be issued under RCAP’s equity plan, pursuant to which a number of shares of RCAP’s Class A common stock equal to 10% of RCAP’s issued and outstanding Class A common stock (on a fully diluted basis) at any time may be granted as awards. In addition, issuances of awards under RCAP’s equity plan or sales of shares under RCAP’s stock purchase program may result in dilution of the economic interests of RCAP’s public stockholders. Significant dilution also may occur due to the estimated 18,992,474 shares of RCAP Class A common stock issuable upon conversion, at the conversion rate applicable as of May 9, 2014, of$120.0 million (face amount) of 5% convertible notes and $270.0 million (aggregate liquidation preference) of 7.00% convertible preferred stock issued to Luxor as part of the Cetera financings. This amount is expected to increase because the negative covenants contained in the bank facilities prohibit RCAP from paying dividends on the convertible preferred stock, and the terms of the convertible preferred stock provide that accrued and unpaid dividends, also are convertible into additional shares of RCAP Class A common stock. An exercise by Luxor of its put right with respect to its membership interest in RCS Capital Management could also cause dilution because it may cause RCAP to issue additional shares of RCAP Class A common Stock.

Any additional capital raised by RCAP through the sale of equity or convertible securities or any equityor convertible securities issued as consideration in future acquisitions may also dilute RCAP’s publicstockholders’ ownership in RCAP. Furthermore, if RCAP issues additional equity securities, its stockholdersmay experience dilution, and the new equity securities could have rights senior to those of RCAP Class A common stock, such as the convertible preferred stock issued to Luxor in connection with the Cetera financings. Because RCAP’s decision to issue securities in any future offering may depend on market conditions and other factors beyond RCAP’s control, RCAP cannot predict or estimate the amount, timing ornature of its future offerings. As a result, RCAP stockholders bear the risk of RCAP’s future securities offerings reducing the market price of RCAP Class A common stock and diluting their interest in RCAP.

RCAP’s ability to pay dividends will be restricted following the completion of the Cetera financings.

RCAP paid cash dividend to its Class A stockholders on a quarterly basis as approved by the RCAP board of directors commencing in July 2013 (with respect to the second quarter of 2013) through April 2014 (with respect to the first quarter of 2014). At the present time, RCAP does not expect to continue paying quarterly dividends in subsequent quarters, as RCAP’s ability to pay dividends is restricted following the completion of the Cetera acquisition due to the negative covenants that are contained in the agreements RCAP entered into when RCAP consummated the Cetera financings, which prohibit payment of dividends by RCAP and its operating subsidiaries (subject to certain limited exceptions). See “ — Dividend Policy and Dividends.”

RCAP Class A stockholders also may not receive the same dividends for other reasons, including the following:

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As a consequence of these various limitations and restrictions, RCAP also may have to eliminate the payment of dividends on RCAP Class A common stock.

Anti-takeover provisions in RCAP’s amended and restated certificate of incorporation and by-laws could discourage a change of control that RCAP stockholders may favor, which could negatively affect the market price of RCAP Class A common stock.

Provisions in RCAP’s amended and restated certificate of incorporation and by-laws may make it more difficult and expensive for a third party to acquire control of RCAP even if a change of control would be beneficial to the interests of RCAP stockholders. For example, RCAP’s certificate of incorporation authorizes the issuance of preferred stock that could be issued by the RCAP board of directors to thwart a takeover attempt. In addition, the holders of RCAP Class B common stock always will have a majority of the voting power of outstanding RCAP common stock. The market price of RCAP Class A common stock could be adversely affected to the extent that the provisions of RCAP’s certificate of incorporation and by-laws will discourage potential takeover attempts that its stockholders may favor. See “RCS Capital Corporation — Description of Capital Stock” for additional information on the anti-takeover measures applicable to RCAP.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about RCAP’s business, the price and trading volume of RCAP Class A common stock could decline.

The trading market for RCAP Class A common stock depends in part on the research and reports that securities or industry analysts publish about RCAP. If few or no securities or industry analysts cover RCAP, the market price of RCAP Class A common stock could be negatively impacted. If securities or industry analysts cover RCAP and if one or more of such analysts downgrades RCAP Class A common stock or publishes inaccurate or unfavorable research about RCAP’s business, the price of RCAP Class A common stock may decline. If one or more of the analysts covering RCAP fail to publish reports on RCAP regularly, demand for RCAP Class A common stock could decline, which could cause the price and trading volume of RCAP Class A common stock to decline.

All of RCAP’s debt obligations, and any future indebtedness RCAP may incur, will have priority over RCAP Class A common stock with respect to payment in the event of a liquidation, dissolution or winding up.

In any liquidation, dissolution or winding up of RCAP, RCAP Class A common stock would rank below all debt claims against RCAP. In addition, any convertible or exchangeable securities or other equity securities that RCAP has issued, such as the Luxor securities, or may issue in the future, may have rights, preferences and privileges more favorable than those of RCAP Class A common stock. As a result, holders of RCAP Class A common stock will not be entitled to receive any payment or other distribution of assets upon the liquidation or dissolution until after RCAP’s obligations to its debt holders and holders of equity securities that rank senior to RCAP Class A common stock have been satisfied.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement/prospectus contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements often, although not always, include words or phrases like “will likely result,” “expect,” “will continue,” “anticipate,” “estimate,” “intend,” “plan,” “project,” “outlook,” or similar expressions. Forward-looking statements are based upon certain underlying assumptions; including any assumptions mentioned with the specific statements, as of the date such statements were made. Such assumptions are in turn based upon internal estimates and analyses of market conditions and trends, management plans and strategies, economic conditions and other factors. Forward-looking statements and the assumptions underlying them are necessarily subject to risks and uncertainties inherent in projecting future conditions and results. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, those set forth under “Risk Factors” beginning on page 42 of this proxy statement/prospectus. The forward-looking statements contained in this proxy statement/prospectus include statements about the following:

These statements are only predictions based on RCAP’s and ICH’s current expectations and projections about future events. There are important factors that could cause its actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including those factors discussed under the caption entitled “Risk Factors.”

Although RCAP and ICH believe the expectations reflected in the forward-looking statements are reasonable, neither of them can guarantee future results, level of activity, performance or achievements.

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Moreover, neither RCAP, ICH nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Neither RCAP nor ICH is under any duty to update any of these forward-looking statements after the date of this proxy statement/prospectus to conform prior statements to actual results or revised expectations.

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THE SPECIAL MEETING

This proxy statement/prospectus is being furnished to holders of ICH common stock in connection with the solicitation by the ICH board of directors of proxies to be voted at the special meeting of ICH stockholders to be held on July 8, 2014, and at any adjournment or postponement of the meeting.

Time, Place and Purpose of the Special Meeting

A special meeting of ICH stockholders will be held at the Sheraton Colonial Boston North Hotel & Conference Center, One Audubon Rd., Wakefield, Massachusetts, on July 8, 2014, commencing at 10:00 a.m. local time, for the following purposes:

The merger cannot be completed unless the holders of at least a majority of the outstanding shares of ICH common stock on the record date vote in favor of the proposal to adopt the merger agreement at the special meeting. A copy of the merger agreement, as amended, is attached as Annex A to this proxy statement/prospectus, which you should read carefully in its entirety.

Recommendations of the ICH Board of Directors

The ICH board of directors, acting upon the unanimous recommendation of the special committee, unanimously recommends that you vote:

The ICH board of directors, acting upon the unanimous recommendation of the special committee, unanimously determined that the merger agreement and the merger are advisable, fair to and in the best interests of ICH and its stockholders and unanimously approved the merger agreement, the merger and the other transactions contemplated by the merger agreement.

In considering the recommendations of the ICH board of directors, you should be aware that some of the directors and executive officers of ICH have interests in the merger that are different from, or are in addition to, the interests of the other ICH stockholders. The special committee, in reaching its decision to recommend the approval of the merger agreement and the merger to the ICH board of directors, and the ICH board of directors, in reaching its decision to approve the merger agreement and the merger, and to recommend that the ICH stockholders vote in favor of the proposal to adopt the merger agreement and to approve the transactions contemplated by the merger agreement, were aware of and considered these interests, among other matters. See “The Merger — Interests of ICH’s Directors and Executive Officers in the Merger.”

Record Date and Quorum

ICH has fixed the close of business on May 9, 2014 as the record date for the special meeting. You are entitled to receive notice of, and to vote at, the special meeting if you owned shares of ICH common stock at the close of business on the record date. On the record date, there were 7,238,309 shares of ICH common

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stock outstanding and entitled to vote, held by 216 holders of record. Each share of ICH common stock entitles its holder to one vote on all matters properly coming before the special meeting.

A majority of the shares of ICH common stock outstanding at the close of business on the record date, present in person or represented by proxy and entitled to vote at the special meeting constitutes a quorum for the purposes of the special meeting. Shares of ICH common stock represented at the special meeting but not voted (because the stockholder fails to either deliver a proxy or attend and vote in person at the special meeting), or to which a stockholder votes to abstain, but not “broker non-votes” (as described below), will be counted for purposes of establishing a quorum. A quorum is necessary for stockholders to vote on the proposal to adopt the merger agreement and approve the transactions contemplated by the merger agreement, and the proposal to approve, on non-binding advisory basis, the compensation that may be paid or become payable to ICH’s named executed officers in connection with the merger, but not the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to adopt the merger agreement. Once a share of ICH common stock is represented at the special meeting, it will be counted for the purpose of determining a quorum at the special meeting and any adjournment of the special meeting. However, if a new record date is set for an adjourned special meeting, then a new quorum will be required. In the event that a quorum is not present at the special meeting, it is expected that the special meeting will be adjourned or recessed until a quorum is present. See “— Adjournments” below.

Record and Beneficial Ownership; Attendance

If your shares of ICH common stock are registered directly in your name with ICH’s transfer agent, Computershare, you are considered, with respect to those shares of ICH common stock, the stockholder “of record.” In that case, this proxy statement/prospectus and the proxy card have been sent directly to you by ICH.

If your shares of ICH common stock are held through a bank, brokerage firm, trustee or other nominee, you are considered the beneficial owner of shares of ICH common stock held in nominee or “street name.” In that case, this proxy statement/prospectus has been forwarded to you by your bank, brokerage firm, trustee or other nominee who is considered, with respect to those shares of ICH common stock, the stockholder of record. As the beneficial owner of shares of ICH common stock held in nominee or “street name,” you have the right to direct your bank, brokerage firm, trustee or other nominee how to vote your shares by following their instructions for voting. If you hold your shares of ICH common stock in nominee or “street name,” please contact your bank, brokerage firm, trustee or other nominee for their instructions on how to vote your shares.

All stockholders of record may attend the special meeting in person by showing government-issued photo identification, such as a passport or driver’s license, and signing in at the special meeting.

If your shares of ICH common stock are held through a bank, brokerage firm, trustee or other nominee and you wish to attend and vote in person at the special meeting, you must provide a legal proxy from the bank, brokerage firm, trustee or other nominee that holds your shares giving you the right to vote the shares at the special meeting, because you are not the record holder of ICH common stock as of the record date, together with a government-issued photo identification.

If you are the representative of a corporate or institutional stockholder, please bring to the special meeting proof that you are the representative of such stockholder together with government-issued photo identification.

Please note that cameras, recording devices and other electronic devices will not be permitted at the special meeting.

Vote Required

Approval of the proposal to adopt the merger agreement and approve the transactions contemplated by the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of ICH common stock entitled to vote on such proposal. Approval of the non-binding advisory proposal to approve the compensation that may be paid or become payable to ICH’s named executed officers in connection with the merger and of the proposal to adjourn the special meeting, if necessary or appropriate, to

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solicit additional proxies in favor of the proposal to adopt the merger agreement, requires the affirmative vote of the holders of at least a majority of the shares of ICH common stock present, in person or by proxy, and entitled to vote at the special meeting. For each of these proposals, you may vote “FOR,” “AGAINST” or “ABSTAIN.”

If you are a stockholder of record and you fail to submit a proxy or to vote in person at the special meeting, your shares of ICH common stock will not be voted on any proposal. Your failure to vote in person at the special meeting or to submit a proxy will have the same effect as a vote against the proposal to adopt the merger agreement and approve the transactions contemplated by the merger agreement, but will have no effect on the outcome of the proposal to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to ICH’s named executed officers in connection with the merger or the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to adopt the merger agreement (except for reducing the number of affirmative votes required to achieve the requisite majority by reducing the total number of shares from which that majority is calculated and, with respect to failures to vote, raising the number of stockholders required to attend the special meeting for a quorum to be present, where required). An abstention will have the same effect as a vote against each of the proposal to adopt the merger agreement, the proposal to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to ICH’s named executed officers in connection with the merger and the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to adopt the merger agreement.

Banks, brokerage firms, trustees or other nominees who hold shares in “street name” for their customers only have discretionary authority to vote on “routine” proposals when they have not received instructions from customers/beneficial owners, and are precluded from exercising voting discretion with respect to “non-routine” proposals. Each of the proposals to be voted on at the special meeting is “non-routine.” As a result, absent specific instructions from you as the beneficial owner of the shares of ICH common stock, banks, brokerage firms, trustees or other nominees are not empowered to vote those shares on any of the proposals to be voted on at the special meeting, which is referred to as a “broker non-vote.” These broker non-votes will have the same effect as a vote against the proposal to adopt the merger agreement and approve the transactions contemplated by the merger agreement, but will have no effect on the outcome of the vote on the proposal to approve, on a non-binding advisory basis, the proposal to approve the compensation that may be paid or become payable to ICH’s named executive officers in connection with the merger or the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to adopt the merger agreement (except for reducing the number of affirmative votes required to achieve the requisite majority by reducing the total number of shares from which that majority is calculated).

How to Vote

If you are a stockholder of record, you may vote your shares of ICH common stock on matters presented at the special meeting in any of the following ways:

If you choose to submit your proxy by mailing a proxy card, your proxy card must be received by ICH’s Assistant Secretary by the time the special meeting begins. Please do not send in your stock certificates with your proxy card. If the merger is consummated, a separate letter of transmittal will be mailed to you that will enable you to surrender your stock certificates and receive the applicable per share merger consideration.

If you vote by proxy, regardless of the method you choose to submit a proxy, the individuals named as proxies on the enclosed proxy card, and each of them, with full power of substitution, will vote your shares of ICH common stock in the way that you indicate on the proxy. When completing your proxy, you may specify

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with respect to each proposal whether your shares of ICH common stock should be voted “FOR” or “AGAINST” the proposal, or if you wish to “ABSTAIN” from voting on the proposal.

If you properly sign your proxy card but do not mark the boxes showing how your shares of ICH common stock should be voted on a proposal, the individuals named as proxies on the enclosed proxy card will vote the shares represented by your properly signed proxy “FOR” the proposal to adopt the merger agreement and approve the transactions contemplated by the merger agreement, “FOR” the proposal to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to ICH’s named executive officers in connection with the merger and “FOR” the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to adopt the merger agreement.

If you hold your shares of ICH common stock in nominee or “street name,” you should direct your bank, brokerage firm, trustee or other nominee on how to vote your shares following the voting instructions provided by your bank, brokerage firm, trustee or other nominee. A number of banks and brokerage firms are participating in a program that offers the means to authorize votes over the Internet and by telephone. If your shares are held in an account with a bank or brokerage firm participating in such a program, you may authorize a proxy to vote those shares over the Internet by visiting the website shown on your proxy card to, or by telephone by calling the telephone number shown on, the voting instructions received from your bank or brokerage firm.

It is important that you submit a proxy for your shares of ICH common stock promptly. Whether or not you plan to attend the special meeting in person, please authorize a proxy to vote your shares as promptly as possible. To authorize a proxy, complete, sign, date and mail your proxy card in the preaddressed postage-paid envelope provided or, if the option is available to you, call the toll-free telephone number listed on your proxy card or use the Internet as described in the instructions on the enclosed proxy card. Authorizing a proxy will assure that your vote is counted at the special meeting if you do not attend in person.

Stock Ownership and Voting by ICH’s Directors and Executive Officers; Voting Agreement

At the close of business on the record date for the special meeting, ICH’s directors and executive officers and their affiliates beneficially owned and had the right to vote 1,326,552 shares of ICH common stock at the special meeting (including the 762,624 shares covered by the voting agreement described below), which represents approximately 18.33% of the ICH shares entitled to vote at the special meeting. It is expected that ICH’s directors and executive officers will vote their shares “FOR” the proposal to adopt the merger agreement and approve the transactions contemplated by the merger agreement, “FOR” the proposal to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to ICH’s named executive officers in connection with the merger, and “FOR” the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to adopt the merger agreement.

Concurrently with the execution of the merger agreement, Timothy B. Murphy, ICH’s President and Chief Executive Officer, entered into a voting agreement with RCAP, pursuant to which Mr. Murphy (where applicable, acting solely in his capacity as a stockholder, and not as an officer or director, of ICH) has agreed, among other things, to vote his shares of ICH common stock in favor of the proposal to adopt the merger agreement and approve the transactions contemplated by the merger agreement. See “Voting Agreement” beginning on page 138 of this proxy statement/prospectus for more information about the voting agreement.

At the close of business on the record date, Mr. Murphy beneficially owned in the aggregate 762,624 shares of ICH common stock representing approximately 10.54% of the shares of ICH common stock outstanding on such date and entitled to vote at the special meeting.

A copy of the voting agreement executed and delivered by Mr. Murphy is attached to this proxy statement/prospectus as Annex B .

Proxies and Revocation

If you are a stockholder of record, you have the right to revoke a proxy at any time before your proxy is voted at the special meeting in one of three ways:

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If your shares of ICH common stock are held through a bank, brokerage firm, trustee or other nominee, please contact your bank, brokerage firm, trustee or other nominee as to its procedures for the revocation of your instructions and/or the giving of new instructions on how to vote the shares held by it on your behalf.

Adjournments

Although it is not currently expected, the special meeting may be adjourned, including for the purpose of soliciting additional proxies, if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement and approve the transactions contemplated by the merger agreement. The special meeting may also be adjourned if a quorum is not present at the special meeting. Other than an announcement to be made at the special meeting of the time, date and place of an adjourned meeting, an adjournment generally may be made without additional notice, unless the adjournment is for more than 30 days or a new record date is fixed. The merger agreement provides that if, on the date scheduled for the special meeting, ICH has not received proxies representing a sufficient number of shares of ICH common stock to obtain the required stockholder approval, whether or not a quorum is present, ICH may make one or more successive postponements or adjournments of the special meeting (but not to a date that is more than (i) 30 days after the date for which the meeting was originally scheduled (excluding any adjournments or postponements required by applicable law) or (ii) 120 days after the record date).

Proxy Solicitations; Expenses

The ICH proxy accompanying this proxy statement/prospectus is solicited on behalf of the ICH board of directors. ICH will bear the costs of the solicitation of proxies from its stockholders, except that ICH and RCAP will share equally all fees and expenses related to the printing, filing and distribution of this proxy statement/prospectus. Following the mailing of this proxy statement/prospectus, the directors, officers, employees and agents of ICH may solicit proxies in person, by mail, or by telephone, facsimile or other electronic methods without additional compensation other than reimbursement for their actual expenses.

ICH will reimburse brokers, banks, institutions and others holding common stock of ICH as nominees for their expenses in sending proxy solicitation material to the beneficial owners of such common stock of ICH and obtaining their proxies.

Householding

In some instances, only one copy of the notice and this proxy statement/prospectus is being delivered to multiple stockholders sharing an address, unless ICH has received instructions from one or more of its stockholders to continue to deliver multiple copies. ICH will deliver promptly, upon oral or written request, a separate copy of the applicable materials to a stockholder at a shared address to which a single copy was delivered. If you wish to receive a separate copy of the notice or this proxy statement/prospectus you may call ICH at (781) 593-8565 or send a written request to Investors Capital Holdings, Ltd., Six Kimball Lane, Suite 150, Lynnfield, MA 01940, attention Rebecca Hice, Assistant Secretary.

Questions and Additional Information

If you have more questions about the merger or how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy card, please call John Cataldo, Chief Compliance Officer and Counsel at (781) 593-8565.

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Proposal No. 3:  Adjournment of the Special Meeting, if Necessary or Appropriate, to Solicit Additional Proxies in Favor of the Proposal to Adopt the Merger Agreement, as Amended, and Approve the Transactions Contemplated by the Merger Agreement, Including the Merger

ICH stockholders are being asked to approve a proposal that will give the ICH board of directors authority to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to adopt the merger agreement, as amended, and approve the transactions contemplated by the merger agreement if there are not sufficient votes to approve such proposal at the time of the special meeting. If this proposal is approved, the special meeting could be adjourned to any date. If you return a proxy and do not indicate how you wish to vote on any proposal, or if you indicate that you wish to vote “FOR” the proposal to adopt the merger agreement and approve the transactions contemplated by the merger agreement, but do not indicate a choice on the proposal to adjourn the special meeting, your shares will be voted “FOR” the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to adopt the merger agreement and approve the transactions contemplated by the merger agreement. However, if you indicate that you wish to vote “AGAINST” the proposal to adopt the merger agreement and approve the transactions contemplated by the merger agreement, your shares will only be voted “FOR” the proposal to adjourn the special meeting only if you indicate that you wish to vote “FOR” that proposal.

Approval of this proposal requires the affirmative vote of the holders of a majority of the shares of ICH common stock present, in person or by proxy, at the special meeting and entitled to vote on this proposal.

The ICH board of directors, acting upon the unanimous recommendation of a special committee consisting solely of the independent directors of ICH, unanimously recommends that you vote “ FOR ” the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to adopt the merger agreement, as amended, and approve the transactions contemplated by the merger agreement if there are not sufficient votes to approve such proposal to at the time of the special meeting.

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THE MERGER

General

RCAP and ICH have entered into a merger agreement, dated as of October 27, 2013, as amended as of February 28, 2014, that provides for the merger of ICH with and into Merger Sub, a wholly owned subsidiary of RCAP, with Merger Sub surviving the merger and continuing as a subsidiary of RCAP under the name “Investors Capital Holdings, LLC.” If the merger agreement is approved by the stockholders of ICH and the merger is subsequently completed, each share of ICH common stock (including shares of restricted ICH common stock and shares issued upon exercise of options to purchase shares of ICH common stock, but excluding shares held by ICH, any wholly owned subsidiary of ICH, RCAP or any wholly owned subsidiary of RCAP) outstanding as of immediately prior to the effective time of the merger, will, at the effective time, be cancelled and converted into the right to receive, at the election of the holder thereof and subject to the limitation on the maximum amount of cash consideration payable in the merger, (i) $7.25 in cash, which we sometimes refer to as the “cash consideration,” or (ii) a number of shares of RCAP Class A common stock equal to the quotient of $7.25 divided by the volume weighted average trading price of a share of RCAP Class A common stock on the NYSE for the five consecutive trading days immediately preceding the closing date of the merger (plus cash in lieu of fractional shares), which we sometimes refer to as the “stock consideration.” Stockholders of ICH who fail to make a valid election will automatically receive stock consideration. Stockholders of ICH who own more than one share of ICH common stock may elect, subject to the same limitation, to receive a combination of cash consideration and stock consideration with respect to their ICH shares.

A copy of the merger agreement, as amended, is attached as Annex A to this proxy statement/prospectus. You should read the merger agreement, as amended, and the other Annexes and documents referred to in this proxy statement/prospectus carefully and in their entirety for a more complete understanding of the merger.

Background of the Merger

The board of directors of ICH, referred to as the ICH board of directors, has from time to time reviewed and evaluated potential strategic alternatives with ICH’s management, including potential business combination transactions, and the long-term prospects for ICH’s business operations, with a view to maximizing ICH stockholder value. The ICH board of directors and senior management also actively monitor developments in the financial services industry and are generally aware of the business activities of other industry participants, including RCAP.

On or about July 19, 2013, Michael Weil, President of RCAP, approached Timothy Murphy, President and Chief Executive Officer and a director of ICH, regarding a possible business combination transaction between ICH and RCAP. At that time, Mr. Weil did not provide any details regarding the terms of any such combination. Mr. Murphy told Mr. Weil that the ICH board of directors had not authorized any discussions regarding a sale of the company, but that he would be willing to communicate to the ICH board of directors a proposal containing an estimated valuation of ICH and other material terms of the potential business combination.

On August 22, 2013, Mr. Weil delivered to Mr. Murphy a preliminary indicative pricing summary indicating RCAP’s interest in acquiring ICH at a value of $6.50 to $6.75 per share, subject to due diligence review, with up to 40% of the aggregate consideration being payable in cash and the balance in shares of RCAP Class A common stock at the election of ICH stockholders. Additionally, the preliminary indicative pricing summary provided that the purchase price would be subject to downward adjustment if ICH did not meet certain performance targets for the fiscal year ending March 31, 2014, and that RCAP would retain $5.0 million of the purchase price as a holdback to satisfy any such adjustments. Mr. Murphy reiterated to Mr. Weil that he was not authorized to discuss with him the terms of a possible sale of ICH, but that he would discuss the matter with other members of the ICH board of directors.

On August 30, 2013, at a special meeting of the Nominating and Governance Committee of the ICH board of directors, which consists of William J. Atherton, Chairman of the ICH board of directors, Robert T. Martin, Blaise A. Aguirre and Robert P. Mazzarella, such persons being all of the independent members of the ICH board of directors, Mr. Atherton presented the preliminary indicative pricing summary received from

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RCAP and summarized ICH’s discussions with RCAP to date as had been relayed to him by Mr. Murphy. The Nominating and Governance Committee discussed the terms of the preliminary indicative pricing summary, procedural considerations with respect to a potential transaction and ICH’s operating results. Following such discussion, the Nominating and Governance Committee expressed its view that, given the significance of a potential acquisition transaction, a special committee consisting solely of the independent members of the ICH board of directors should be established to evaluate the transaction in the event that ICH board of directors determined to pursue discussions with RCAP. The Nominating and Governance Committee also expressed its view that the terms of the preliminary indicative pricing summary were not in the best interests of ICH and its stockholders.

Following the meeting of the Nominating and Governance Committee, Mr. Murphy informed Mr. Weil that ICH was not interested in continuing discussions regarding a possible transaction with RCAP based on the valuation range indicated in the preliminary indicative pricing summary.

On September 3, 2013, Mr. Weil delivered to Mr. Murphy a revised preliminary indicative pricing summary indicating a value for ICH of $7.30 per share, subject to due diligence review, with up to 65% of the aggregate consideration payable in cash and the balance in shares of RCAP Class A common stock calculated based on the volume weighted average trading price per share over the five trading days prior to closing of the transaction, referred to as the RCAP VWAP, at the election of ICH stockholders. The revised preliminary indicative pricing summary also provided for (i) a downward purchase price adjustment in the event ICH did not meet certain performance targets for 2013, with any such adjustment to be satisfied from a $5.0 million holdback, (ii) a $5.0 million termination fee payable by ICH to RCAP in the event that ICH terminated an RCAP transaction to enter into a superior transaction and (iii) a 45-day exclusivity period to negotiate the final transaction terms. Mr. Murphy communicated the terms of the revised preliminary indicative pricing summary to the Nominating and Governance Committee.

On September 6, 2013, the Nominating and Governance Committee engaged Morse Barnes-Brown & Pendleton, P.C., referred to as MBBP, as the legal advisor to the independent members of the ICH board of directors in connection with a possible transaction with RCAP.

On September 10, 2013, ICH engaged Bracewell & Giuliani LLP, referred to as Bracewell, as its legal advisor in connection with a proposed transaction with RCAP.

On September 16, 2013, the Nominating and Governance Committee held a meeting, at which Mr. Murphy and a representative of MBBP were present, to discuss the communications received from RCAP expressing its interest in acquiring ICH and to determine how to proceed in response. At the meeting, Mr. Murphy summarized the indicative price summaries received from RCAP to date. The Nominating and Governance Committee discussed, among other things, the advantages, disadvantages and merits of a potential transaction with RCAP, including the various challenges facing ICH if it remained a standalone company, and expressed its view that the proposed valuation of ICH at $7.30 per share represented a potentially compelling opportunity for ICH’s stockholders and that ICH’s stockholders were unlikely to realize a higher return on their investment in ICH than that reflected in the revised preliminary indicative pricing summary if ICH did not pursue the proposed transaction. The Nominating and Governance Committee expressed its view that ICH should continue discussions with RCAP and that the ICH board of directors should establish a special committee consisting solely of the independent directors to evaluate the terms of a potential transaction with RCAP and make a recommendation with respect thereto to the ICH board of directors.

On September 16, 2013, at a special meeting of the ICH board of directors, after due consideration of the views expressed by the Nominating and Governance Committee and following a discussion of the terms of the indicative pricing summaries submitted by RCAP, the ICH board of directors established a special committee consisting solely of the members of the Nominating and Governance Committee, being all of the independent members of the ICH board of directors, to pursue and facilitate negotiations with RCAP, review and evaluate the terms of a potential transaction with RCAP and make a recommendation to the ICH board of directors with respect to any such transaction. The ICH board of directors also directed ICH management to communicate to RCAP that ICH would consider a transaction based on a valuation of ICH at $7.30 per share, but without any purchase price adjustment. The ICH board of directors also ratified the continued engagement

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of MBBP as the legal advisor to the special committee and authorized the Special Committee to engage a financial advisor to evaluate the proposed transaction.

Following the ICH board of directors meeting, Mr. Murphy communicated the ICH board of directors’ position to Mr. Weil. On September 20, 2013, RCAP delivered a second revised preliminary indicative pricing summary to ICH, which contemplated an all-stock merger transaction at a value of $7.30 per share for ICH, on a fully-diluted basis, calculated based on the RCAP VWAP, with a 45-day exclusivity period and a $5.0 million termination fee, but no purchase price adjustment or holdback requirement. The proposal also required ICH to maintain a minimum amount of net working capital at the closing of the transaction and indicated RCAP’s interest in Mr. Murphy and certain other members of ICH’s senior management continuing their employment with ICH following the transaction on terms to be discussed and determined at a later date.

On September 23, 2013, the special committee held a meeting to discuss the latest terms of the RCAP proposal. A representative of MBBP attended such meeting and all subsequent meetings of the special committee. Following a discussion regarding, among other things, the form of consideration proposed by RCAP and the need to conduct diligence on RCAP in respect of any stock consideration, the special committee determined to pursue further negotiations with RCAP, including with respect to the form of merger consideration to be received by ICH stockholders. However, given that RCAP Class A common stock would potentially represent a significant portion of the merger consideration that would be received by ICH stockholders, the special committee requested that RCAP’s management share certain information with the ICH board of directors and management in order to further evaluate a potential transaction.

On September 25, 2013, at a meeting of the special committee, Mr. Murphy provided an update on further communications with RCAP since the September 23, 2013 meeting. He indicated that the principal terms of RCAP’s latest proposal, conveyed verbally to Mr. Murphy by William Kahane, RCAP’s Chief Executive Officer, were either (i) $7.35 per share, on a fully-diluted basis, with up to 50% of the merger consideration payable in cash and the balance in RCAP Class A common stock, at the election of ICH stockholders, or (ii) $6.50 per share, on a fully-diluted basis, payable entirely in cash. In either case, no purchase price adjustment or holdback would be required and RCAP would agree to a termination fee of less than $5.0 million.

On September 26, 2013, RCAP’s management conducted a presentation to the special committee and ICH management regarding, among other things, RCAP’s organizational structure, current business lines and growth strategy and the liquidity of RCAP’s Class A common stock. Following the RCAP management presentation, the special committee held a meeting to discuss the information presented, outstanding diligence questions and next steps with respect to diligence of RCAP. The special committee also determined that the full ICH board of directors should consider the terms of RCAP’s most recent proposal, in particular that RCAP’s Class A common stock would potentially constitute a significant portion of the merger consideration.

On September 27, 2013, the ICH board of directors held a special meeting to consider and receive an update regarding a potential transaction with RCAP. Mr. Murphy summarized the proposals received from and negotiations with RCAP to date and reported on RCAP’s latest proposal (as communicated to him by Mr. Kahane), which contemplated a valuation of ICH of $7.35 per share on a fully-diluted basis, with up to 60% of the purchase price payable in cash at the election of ICH stockholders and the balance in RCAP Class A common stock, no purchase price adjustment or holdback requirement and a termination fee of less than $5.0 million. Mr. Murphy also informed the ICH board of directors that RCAP had indicated that the continued employment of ICH management was a significant factor in the offer price and a material inducement to RCAP entering into the proposed transaction. The ICH board of directors engaged in a lengthy discussion of the terms of the latest RCAP proposal and the merits of the proposed transaction, including that the proposed merger consideration represented a significant premium over both the closing price of ICH common stock for such day and the highest trading range of ICH common stock in the previous ten years. The ICH board of directors also discussed potential alternatives to a proposed transaction with RCAP, including remaining a standalone company or the acquisition of ICH by a third party other than RCAP. The ICH board of directors determined that RCAP’s proposal of $7.35 per share on a fully-diluted basis seemed to fully value ICH and therefore represented an attractive value to the ICH stockholders. Following such

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discussion, the ICH board of directors authorized ICH management to draft, negotiate and enter into a non-binding letter of intent with RCAP reflecting the terms communicated verbally by Mr. Weil and a reasonable termination fee, with such changes as may be approved by the special committee.

Following the meeting of the ICH board of directors, Mr. Murphy communicated to Mr. Weil ICH’s position with respect to RCAP’s proposal and, on September 28, 2013, RCAP delivered a third revised preliminary indicative pricing summary reflecting the terms previously communicated to Mr. Murphy and a reduced termination fee of $3.0 million. The summary also provided for minimum capital requirements for ICH at the closing of the transaction and a binding 45-day exclusivity period in which to negotiate and execute a definitive merger agreement.

Over the next few days, ICH and Bracewell prepared a draft of a non-binding letter of intent, referred to as the letter of intent, memorializing the terms of the third revised preliminary indicative pricing summary, including, among other terms, (i) a price of $7.35 per share for the issued and outstanding stock of ICH on a fully-diluted basis, (ii) merger consideration of up to 60% cash and the balance in RCAP Class A common stock calculated based on the RCAP VWAP, at the election of ICH stockholders, (iii) a binding 45-day exclusivity period following the execution of the letter of intent (including a fiduciary out provision for superior proposals), (iv) post-closing employment agreements for certain members of ICH senior management, and (v) the inclusion in the definitive merger agreement of a termination fee of $3.0 million as RCAP’s sole and exclusive remedy in the event that ICH terminated the merger agreement with RCAP to consummate an alternative business combination transaction.

On September 30, 2013, the special committee held a meeting to review and consider the letter of intent prepared by ICH and Bracewell and, following its review and approval, directed management to provide the letter of intent to RCAP for consideration. Over the course of the next day, the parties, acting through outside legal counsel, discussed and negotiated the terms of the letter of intent.

On October 1, 2013, the special committee met to discuss the revisions to the letter of intent proposed by RCAP’s outside counsel, Proskauer Rose LLP, referred to as Proskauer. The special committee discussed, among other terms, RCAP’s request that the employment agreements be entered into with ICH’s senior management concurrently with the execution of the merger agreement effective upon the closing of the merger, the deletion of the fiduciary-out exception to the exclusivity provision and RCAP’s request for reimbursement of expenses in the amount of $500,000 in the event that the parties did not enter into a definitive agreement during the exclusivity period and ICH entered into an agreement relating to a competing proposal within the following 180 days. Following such discussion, the special committee unanimously approved a draft of the letter of intent restoring the fiduciary-out exception to the exclusivity provision and incorporating the other comments discussed at such meeting. The special committee also determined that it was now appropriate to engage a financial advisor to evaluate and advise the special committee with respect to the proposed transaction and the merger consideration to be paid to ICH stockholders.

On October 1, 2013, the RCAP board of directors held a meeting to discuss and approve the terms of the letter of intent to be entered into with ICH.

On October 1, 2013, ICH and RCAP executed and delivered the letter of intent and a mutual non-disclosure agreement to facilitate due diligence. On October 2, 2013, ICH and RCAP issued press releases regarding the execution of the letter of intent and the potential transaction and filed current reports on Form 8-K with the SEC disclosing the execution of the letter of intent and the material terms thereof.

On October 4, 2013, Proskauer delivered a draft merger agreement to Bracewell. Beginning on such date and continuing through October 27, 2013, the date on which the merger agreement was executed and delivered, the parties conducted due diligence on each other and representatives of Proskauer and Bracewell exchanged drafts of the merger agreement and, together with representatives of both companies, engaged in extensive negotiations with respect thereto. The negotiations addressed, among other things, the structure of the transaction and whether it would be a taxable event for ICH stockholders, the nature of the representations and warranties to be made by the parties, the conditions required to be satisfied prior to each party’s obligation to close the transactions and the circumstances under which ICH would be required to pay to RCAP a termination fee and/or reimburse RCAP for certain expenses. On October 10, 2013, Proskauer

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delivered to Bracewell a draft voting agreement to be entered into by Mr. Murphy concurrently with the execution of the merger agreement with respect to ICH common stock owned by him or issuable upon the exercise of his vested options (together representing approximately 8.3% of ICH’s outstanding common stock on a fully-diluted basis as of such date).

During the first week of October 2013, the special committee designated Mr. Murphy to conduct the process of interviewing potential candidates for a financial advisor for purposes of evaluating the proposed transaction with RCAP. During the week of October 6, 2013, Mr. Murphy, on behalf of the special committee, interviewed several financial institutions, including Cassel Salpeter & Co., LLC, referred to as Cassel Salpeter, for the purpose of engaging one of them to act as the special committee's financial advisor.

On October 10, 2013, the special committee engaged Cassel Salpeter to serve as its financial advisor for purposes of evaluating the proposed transaction with RCAP. The special committee selected Cassel Salpeter due to, among other things, its experience with evaluating and advising companies with respect to fundamental business transactions, including its prior experience advising financial services companies in merger transactions similar to the proposed transaction.

In the afternoon of October 14, 2013, the special committee convened a meeting to receive an update from management regarding the proposed transaction and to discuss with Cassel Salpeter its preliminary financial analyses with respect to ICH and the proposed transaction. At the time of the meeting, the proposed merger consideration was $7.35 per share on a fully-diluted basis, payable in cash or RCAP Class A common stock based on the RCAP VWAP at the election of ICH stockholders, subject to maximum cash consideration of not more than 60% of the total merger consideration to be received by ICH stockholders.

In the evening of October 14, 2013, the special committee convened a meeting to receive an update from management and to further discuss and consider the proposed transaction, including the analysis provided by Cassel Salpeter earlier that day. Mr. Murphy and representatives of Bracewell provided an update regarding the status of negotiations and the draft merger agreement. Following discussion, the special committee recommended that the ICH board of directors proceed with the proposed transaction subject to the satisfactory resolution of the open items, and directed ICH management to keep the special committee informed as to any material developments.

Immediately following the meeting of the special committee, the ICH board of directors convened a special meeting to receive an update on the proposed transaction from management and the special committee. Mr. Atherton provided an overview of Cassel Salpeter’s preliminary analyses with respect to ICH and the proposed transaction that had been discussed with the special committee earlier that day and relayed the special committee’s recommendation that the ICH board of directors proceed with the proposed transaction on the terms and conditions reflected in the most recent drafts of the transaction documents. Representatives of Bracewell reviewed the draft merger agreement with the ICH board of directors and highlighted certain key provisions, including the representations and warranties, restrictions on ICH’s business activities pending closing, ICH’s “no shop” covenant, ICH’s “fiduciary out” termination rights, other termination rights and related fees and expenses and the conditions to each party’s obligation to close the merger. Representatives of Bracewell explained that the draft merger agreement was generally consistent with the terms of the letter of intent and that, although the parties were still negotiating certain open points, they expected these would be resolved. Representatives of Bracewell also informed the ICH board of directors that there were no material open issues with respect to the draft voting agreement to be entered into by Mr. Murphy. Mr. Murphy provided an update regarding the status of negotiations with RCAP and explained that he and other members of ICH management were in the process of reviewing drafts of employment agreements received from RCAP. Following discussion, the ICH board of directors provided guidance to ICH management and Bracewell regarding certain open items in the merger agreement and instructed management to proceed with the proposed transaction pending the satisfactory resolution of the open items and to keep the ICH board of directors informed as to any material developments.

Following the October 14, 2013 meetings, representatives of ICH management and Bracewell continued to discuss and negotiate the draft merger agreement with representatives of RCAP and Proskauer to reach a satisfactory resolution of the remaining open issues, and ICH management provided periodic updates to the

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members of the ICH board of directors. The parties also continued to negotiate the voting agreement, the disclosure letters to be delivered concurrently with the merger agreement and the employment agreements, and conducted additional due diligence.

On the morning of October 22, 2013, the ICH board of directors convened a special meeting to receive an update from Mr. Murphy and Bracewell with respect to the resolution of the open items in the draft merger agreement. Mr. Murphy explained that he had engaged in numerous discussions with members of RCAP’s senior management regarding a reduction in RCAP’s valuation of ICH on a per-share basis as result of its due diligence on ICH, and that the parties had agreed (subject to approval by each party’s board) on a price of $7.25 per share for ICH common stock on a fully-diluted basis in lieu of an alternative proposal by RCAP that involved a pre-closing downward adjustment to a slightly higher per-share price. Following discussion, the ICH board of directors determined that the proposed resolution preserved both the value to be received by ICH stockholders and the certainty of that value at the time of the special meeting. Representatives of Bracewell then provided an update regarding the tax consequences of the merger. Bracewell explained that, following extensive discussions among the parties and their legal advisors, the parties ultimately determined that the current corporate organizational structure of RCAP would not accommodate a transaction structure that would cause the merger to qualify as a tax-free reorganization for U.S. federal income tax purposes without significant uncertainty and delay of the merger closing. Bracewell explained that the transaction structure that was being considered would trigger U.S. federal income tax liability for ICH stockholders who elect to receive RCAP Class A common stock as merger consideration, although there would be no change to the U.S. federal income tax treatment for ICH stockholders electing to receive cash as merger consideration. Following discussion, the ICH board of directors determined that potential benefits of a tax-free reorganization were outweighed by the significant potential delays and uncertainties associated with achieving such outcome, and that the ability of ICH stockholders to elect cash consideration in the merger transaction (subject to the 60% cap) partially offset the prospect of having to pay U.S. federal income taxes on RCAP Class A common stock received as merger consideration. At the conclusion of the meeting, the ICH board of directors determined that the additional developments did not change the ICH board of directors’ previous conclusion that the transaction would be in the best interests of ICH and its stockholders and directed management to proceed with the proposed transaction on the basis discussed at the meeting.

From October 22, 2013 until the evening of October 27, 2013, representatives of ICH and RCAP and their respective legal advisors continued to negotiate and finalize the terms of the merger agreement, voting agreement and related documents consistent with the instructions received from the special committee and the ICH board of directors. ICH management provided periodic updates to the special committee and the ICH board of directors regarding progress, and the special committee and ICH management consulted with their legal and financial advisors with respect to material developments.

On October 23, 2013, the RCAP board of directors held a meeting to discuss the terms of the merger agreement, the voting agreement to be entered into by Mr. Murphy and the employment agreements to be entered into with Mr. Murphy and other members of ICH’s senior management, and approved the then-current drafts of those agreements and the transactions contemplated thereby and delegated authority to the Executive Committee of the RCAP Board to review, authorize and approve the final versions of each of those agreements and the transactions contemplated thereby.

On the evening of October 27, 2013, the special committee met, joined by representatives from Cassel Salpeter and Bracewell and members of ICH management. At the request of the special committee, Cassel Salpeter reviewed and discussed its financial analyses with respect to ICH and the proposed transaction. Thereafter, Cassel Salpeter rendered its verbal opinion to the special committee (which was confirmed in writing by delivery of Cassel Salpeter’s written opinion dated the same date), that, as of October 27, 2013, the aggregate merger consideration to be received by the holders of ICH common stock in the merger pursuant to the merger agreement was fair, from a financial point of view, to such holders. The full text of the written opinion of Cassel Salpeter, which describes, among other things, the assumptions, qualifications, limitations and other matters considered in connection with the preparation of its opinion is attached as Annex C to this proxy statement/prospectus. Representatives of Bracewell discussed the revisions to the draft merger agreement subsequent to the draft of October 22, 2013. After further discussion, the special committee

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unanimously voted to recommend to the ICH board of directors that it approve the proposed transaction upon the terms set forth in the then-current draft merger agreement.

Immediately following the meeting of the special committee, the ICH board of directors held a special meeting attended by all members of the ICH board of directors and representatives from management and Bracewell. Mr. Murphy provided an update on the status of the employment agreements for certain members of management to be entered into concurrently with the merger agreement, effective upon the closing of the merger. On behalf of the special committee, Mr. Atherton discussed Cassel Salpeter’s financial analyses and opinion to the special committee and provided the special committee’s formal recommendation that the ICH board of directors approve the merger agreement and the transactions contemplated thereby. Representatives of Bracewell summarized the material terms of the proposed transaction and noted the material changes made to the merger agreement subsequent to the draft of October 22, 2013. Following a discussion of the terms of the merger agreement and other ancillary matters related to the merger, including the terms of Mr. Murphy’s voting agreement and the employment agreements, and taking into account all of the factors which had previously considered by the ICH board of directors in connection with the proposed transaction, including, without limitation, those described in “ICH’s Reasons for the Merger and Recommendation of the ICH Board of Directors” below, including that no third parties had approached the ICH board of directors with a competing acquisition proposal subsequent to the announcement of the letter of intent with RCAP, the ICH board of directors determined that the merger agreement and the transactions contemplated thereby, including the merger, were advisable, fair to and in the best interests of ICH and its stockholders and unanimously voted to adopt resolutions authorizing ICH to enter into the merger agreement, directing that the merger agreement be submitted for approval by ICH stockholders and recommending that the ICH stockholders adopt the merger agreement at a special meeting to be called for such purpose.

On October 27, 2013, the Executive Committee of the RCAP Board authorized and approved the final terms of the merger agreement to be entered into with ICH, as well as the voting agreement to be entered into with Mr. Murphy and the employment agreements to be entered into with Mr. Murphy and other members of the ICH senior management and the transactions contemplated by each such agreement.

Following the ICH board of directors meeting, the parties executed and delivered the merger agreement on the evening of October 27, 2013. On October 28, 2013, RCAP and ICH each publicly announced the execution of the merger agreement, and the merger agreement and various communications related thereto were filed with the SEC on that date and thereafter.

Effective February 11, 2014, RCAP engaged in a series of transactions, which are referred to in this proxy statement/prospectus as the exchange transactions, to restructure its capital structure and the ownership structure of its operating subsidiaries. The exchange transactions made it possible for the merger, if restructured as a forward triangular merger (where ICH is merged with and into Merger Sub, instead of the opposite), to qualify as a “reorganization” for U.S. federal income tax purposes within the meaning of Section 368(a) of the Code. In addition, the parties realized that the valuation mechanism relating to fractional shares in the merger agreement was incorrect and that more time was needed to complete the merger than originally anticipated.

Therefore, on February 28, 2014, the merger agreement was amended to, among other things, (1) provide that ICH will merge with and into Merger Sub, with ICH ceasing to exist and Merger Sub continuing as the surviving entity in the merger and as a subsidiary of RCAP under the name “Investors Capital Holdings, LLC,” (2) provide that this new merger structure is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Code, (3) clarify that each ICH stockholder entitled to receive a fraction of a share of RCAP Class A common stock in exchange for such stockholder’s shares of ICH common stock will receive, in lieu of such fractional share, an amount in cash equal to the product of such fractional share interest multiplied by the volume weighted average trading price of a share of RCAP Class A common stock on the NYSE for the five consecutive trading days immediately preceding the closing date of the merger and (4) extend the date after which the parties can terminate the merger agreement, which we refer to as the “outside date,” from April 30, 2014 (or June 30, 2014, if receipt of FINRA approval would be the only condition that had not been satisfied or waived by April 30, 2014) to July 31, 2014.

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At a meeting held on February 28, 2014, acting upon the unanimous recommendation of the special committee (which also met on that date), the ICH board of directors unanimously confirmed its determination that the merger agreement, as so amended, and the transactions contemplated by the merger agreement, including the merger, are advisable, fair to and in the best interests of ICH and its stockholders, approved the amendment to the merger agreement, and reiterated its recommendation that ICH stockholders adopt the merger agreement, as amended, and approve the merger. Also on February 28, 2014, the Executive Committee of the RCAP board of directors (acting by written consent pursuant to board authority) approved the amendment to the merger agreement.

ICH’s Reasons for the Merger and Recommendation of the ICH Board of Directors

At a meeting held on October 27, 2013, acting upon the unanimous recommendation of the special committee, the ICH board of directors unanimously determined that the merger agreement and the transactions contemplated by the merger agreement, including the merger, are advisable, fair to and in the best interests of ICH and its stockholders, and adopted resolutions approving the merger agreement and the transactions contemplated thereby, including the merger, directing that the merger agreement be submitted for approval by the stockholders of ICH and recommending that ICH stockholders adopt the merger agreement at a special meeting to be called for such purpose.

In evaluating the merger agreement, the merger and the other transactions contemplated by the merger agreement, the special committee and the ICH board of directors consulted with ICH management and their respective legal advisors, and the special committee consulted with its financial advisor. In the course of determining that the merger agreement and the transaction contemplated by the merger agreement, including the merger, are fair to, advisable to and in the best interests of the ICH stockholders, the ICH board of directors considered the recommendation of the special committee and a number of other factors in addition to the matters discussed by the ICH board of directors as described above under “— Background of the Merger.” The material factors considered by the special committee in arriving at its decision to recommend the merger agreement and the merger for approval by the ICH board of directors were substantially the same factors considered by the ICH board of directors in reaching its decision to approve the merger agreement and recommend that it be adopted by the ICH stockholders and include, but are not limited to, the following factors:

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On February 28, 2014, the merger agreement was amended to, among other things, modify the structure of the merger and provide that, as so restructured, the merger is intended to qualify as a “reorganization” for U.S. federal income tax purposes within the meaning of Section 368(a) of the Code. The ICH board of directors considered this factor in reaching its decision to approve the merger agreement amendment.

During the course of reaching the determinations and decisions and making the recommendations described above, the special committee and the ICH board of directors also considered the following risks and potentially negative factors relating to the merger agreement and the transactions contemplated thereby:

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In authorizing ICH to enter into the first amendment to the merger agreement, as of February 28, 2014, the special committee and the ICH board of directors determined that the proposed changes to the merger agreement did not affect, in any material respect, the analysis of the reasons for the merger as considered by the special committee and the ICH board of directors at the time ICH entered into the original merger agreement, as of October 27, 2013.

The foregoing description of the information and factors considered by the special committee and the ICH board of directors includes the material information and positive and negative factors considered, but is not exhaustive and may not include all of the factors considered by the special committee or the ICH board of directors, or any individual director. In view of the wide variety of factors considered by the special committee and the ICH board of directors in connection with their respective evaluations of the proposed merger and the complexity of these matters, the special committee and the ICH board of directors did not consider it practical, nor did they attempt to, quantify, rank or otherwise assign relative weights to the specific factors considered in reaching their respective ultimate decisions. Rather, the special committee and the ICH board of directors conducted an overall analysis of the factors described. In addition, in considering the factors described above and any other factors, individual members of the special committee or the ICH board of directors may have viewed factors differently or given different weight or merit to different factors. The special committee made its recommendation to the ICH board of directors and the ICH board of directors (acting upon such recommendation) is making its recommendation to the ICH stockholders, in each case, based on the totality of the information and factors presented to and considered by it.

In considering the recommendation of the ICH board of directors to vote for the adoption of the merger agreement, you should be aware that the executive officers and directors of ICH may have certain interests in the proposed transaction that may be different from, or in addition to, the interests of ICH stockholders generally. See “— Interests of ICH’s Directors and Executive Officers in the Merger.” In addition, you should be aware that certain information presented in the foregoing description of the reasoning of the special committee and the ICH board of directors is forward-looking in nature and should, therefore, be read in light of the “Cautionary Statement Regarding Forward-Looking Statements” contained in this proxy statement/prospectus.

The ICH board of directors (acting upon the unanimous recommendation of the special committee) unanimously recommends that you vote “ FOR ” the proposal to adopt the merger agreement and approve the transactions contemplated by the merger agreement, “ FOR ” the proposal to approve, on a non-binding advisory basis, the compensation that may be paid or become payable to ICH’s named executive officers in connection with the merger, and “ FOR ” the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies in favor of the proposal to adopt the merger agreement and approve the transactions contemplated by the merger agreement.

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RCAP’s Reasons for the Merger

The RCAP board of directors has unanimously approved the merger agreement and the transactions contemplated by the merger agreement, including the merger. In reaching its decision, the RCAP board of directors consulted with senior members of RCAP’s management team and with its legal advisors regarding the results of the due diligence efforts undertaken by RCAP’s management team and RCAP’s legal advisors. The decision of the RCAP board of directors to approve the merger agreement was based upon a number of potential benefits of the merger and other factors that it believed would contribute to the success of the combined company, and thus benefit the RCAP stockholders. These benefits and factors include the following, the order of which does not necessarily reflect their relative significance:

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The RCAP board of directors considered a number of potentially negative factors, as well as related mitigating factors, in its deliberations concerning the merger agreement, including:

After consideration of these factors, the RCAP board of directors determined that these risks could be mitigated or managed by RCAP, ICH or the combined company prior to or following the merger, and were reasonably acceptable under the circumstances or, in light of the anticipated benefits, were unlikely to have a materially adverse impact on the merger or on the combined company following the merger.

Overall, upon consideration of all of the foregoing factors as well as others, the RCAP board of directors determined that the risks and other negative factors were significantly outweighed by the potential benefits of the merger and other positive and mitigating factors and determined to approve the merger agreement and the transactions contemplated by the merger agreement, including the merger.

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In authorizing RCAP to enter into the first amendment to the merger agreement, as of February 28, 2014, the Executive Committee of the RCAP board of directors (acting pursuant to board authority) determined that the proposed changes to the merger agreement did not affect in any material respect the analysis of the reasons for the merger as considered by the RCAP board of directors at the time RCAP entered into the original merger agreement, as of October 27, 2013.

The foregoing description of the information and factors considered by the RCAP board of directors is not exhaustive, but RCAP believes it includes all the material factors considered by the RCAP board of directors. In view of the wide variety of factors considered by the RCAP board of directors in connection with its evaluation of the merger and the complexity of these matters, the RCAP board of directors did not consider it practical, and did not attempt, to quantify, rank or otherwise assign relative weights to the specific factors it considered in reaching its decision. Rather, the RCAP board of directors made its decision based on the totality of information presented to it and the investigation it conducted. In considering the factors described above, individual RCAP directors may have given different weights to different factors.

Opinion of Financial Advisor to the Special Committee

On October 27, 2013, Cassel Salpeter rendered its oral opinion to the special committee (which was confirmed in writing by delivery of Cassel Salpeter’s written opinion dated the same date), as of October 27, 2013, as to the fairness, from a financial point of view, to the holders of ICH common stock of the aggregate merger consideration to be received by such holders in the merger pursuant to the merger agreement. The summary of the opinion in this proxy statement/prospectus is qualified in its entirety by reference to the full text of the written opinion, which is included as Annex C to this proxy statement/prospectus and sets forth the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Cassel Salpeter in preparing its opinion.

The opinion was addressed to the special committee for the use and benefit of the members of the special committee (in their capacities as such) in connection with the special committee’s evaluation of the merger. Cassel Salpeter’s opinion may not be used for any other purpose without Cassel Salpeter’s prior written consent. Neither the opinion nor the summary of the opinion and related analyses set forth in this proxy statement/prospectus is intended to and they do not constitute advice or a recommendation to any of the holders ICH common stock or any other security holders as to how such holder should vote or act with respect to any matter relating to the merger including, without limitation, whether to elect to receive cash or shares of RCAP Class A common stock as merger consideration, or otherwise. Cassel Salpeter’s opinion should not be construed as creating any fiduciary duty on Cassel Salpeter’s part to ICH or any other party to the merger agreement, any security holder of ICH or such other party, any creditor of ICH or such other party, or any other person. Cassel Salpeter’s opinion was just one of the several factors the special committee took into account in making its determination to recommend that the ICH board of directors approve the merger agreement and the merger, including those described elsewhere in this proxy statement/prospectus.

Cassel Salpeter’s opinion only addressed whether, as of the date of the opinion, the aggregate merger consideration to be received by the holders of ICH common stock in the merger pursuant to the merger agreement was fair, from a financial point of view, to such holders, and did not and does not address any other terms, aspects, or implications of the merger agreement or the merger, including, without limitation, any term or aspect of the merger that is not susceptible to financial analyses, the fairness of the merger or all or any portion of the merger consideration, to any other security holders of ICH or any other person or any creditors or other constituencies of ICH or any other person, nor the fairness of the amount or nature, or any other aspect, of any compensation or consideration payable to or received by any officers, directors or employees of any parties to the merger, or any class of such persons, relative to the merger consideration to be received by the holders of ICH common stock pursuant to the merger agreement, or otherwise. Cassel Salpeter did not express any opinion as to what the value of shares of RCAP Class A common stock actually would be when issued to the holders of ICH common stock in the merger or the prices at which shares of ICH common stock or RCAP Class A common stock may trade, be purchased or sold at any time. Cassel Salpeter assumed that the shares of RCAP Class A common stock to be issued in the merger to the holders of ICH common stock will be listed on the NYSE. In addition, Cassel Salpeter understood that the right of the holders of ICH common stock to elect to receive the merger consideration in cash or shares of RCAP Class A common stock was subject to limitations and procedures set forth in the merger agreement, including, without

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limitation, with respect to the maximum amount of cash consideration payable in the merger pursuant to the merger agreement, as to which such limitations and procedures, Cassel Salpeter expressed no view or opinion.

Cassel Salpeter’s opinion did not address the relative merits of the merger as compared to any alternative transaction or business strategy that might exist for ICH, or the merits of the underlying decision by the special committee, the ICH board of directors or ICH to engage in or consummate the merger. The financial and other terms of the merger were determined pursuant to negotiations between the parties to the merger agreement and were not determined by or pursuant to any recommendation from Cassel Salpeter. In addition, Cassel Salpeter was not authorized to, and did not, solicit indications of interest from third parties regarding a potential transaction involving ICH.

Cassel Salpeter’s analyses and opinion were necessarily based upon market, economic, and other conditions as they existed on, and could be evaluated as of, the date of the opinion. Accordingly, although subsequent developments could arise that would otherwise affect its opinion, Cassel Salpeter did not assume any obligation to update, review, or reaffirm the opinion to the special committee or any other person or otherwise to comment on or consider events occurring or coming to its attention after the date of the opinion.

In arriving at its opinion, Cassel Salpeter made such reviews, analyses, and inquiries as Cassel Salpeter deemed necessary and appropriate under the circumstances. Among other things, Cassel Salpeter:

In arriving at its opinion, Cassel Salpeter, with the special committee’s consent, relied upon and assumed, without independently verifying, the accuracy and completeness of all of the financial and other information that was supplied or otherwise made available to it or available from public sources, and Cassel Salpeter further relied upon the assurances of ICH’s and RCAP’s management that they were not aware of any facts or

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circumstances that would have made any information supplied or made available to Cassel Salpeter inaccurate or misleading. Cassel Salpeter is not a legal, tax, environmental, or regulatory advisor, and Cassel Salpeter did not express any views or opinions as to any legal, tax, environmental, or regulatory matters relating to ICH, RCAP, the merger, or otherwise. Cassel Salpeter understood and assumed that ICH had obtained or would obtain such advice as it deemed necessary or appropriate from qualified legal, tax, environmental, regulatory, and other professionals. The special committee also advised Cassel Salpeter that ICH did not prepare, and Cassel Salpeter did not have access to, long-term forecasts with respect to the future financial performance of ICH, and the special committee directed Cassel Salpeter to use and rely upon, for purposes of its analyses and opinion, the ICH Projections, which Cassel Salpeter with the special committee’s consent assumed were reasonably prepared on a basis reflecting the best currently available estimates and judgments of management of ICH with respect to the future financial performance of ICH, and that the ICH Projections provided a reasonable basis upon which to analyze and evaluate ICH and form an opinion. In addition, as the special committee was aware, the RCAP Financial Data provided by RCAP was limited, and management of RCAP did not provide Cassel Salpeter with, and Cassel Salpeter did not have access to, financial forecasts relating to RCAP sufficient for Cassel Salpeter to conduct a discounted cash flow analysis of RCAP. Accordingly, Cassel Salpeter considered and compared the Analyst Estimates for RCAP with corresponding financial data of companies with publicly traded equity securities that Cassel Salpeter deemed relevant, and with the special committee’s consent, for purposes of its analyses and this opinion, Cassel Salpeter assumed that the value of the stock consideration would be equal to the cash consideration. Cassel Salpeter expressed no view with respect to the ICH Projections, the Analyst Estimates for RCAP or, in each case, the assumptions on which they were based. Cassel Salpeter did not evaluate the solvency of ICH, RCAP or any other party to the merger, the fair value of ICH, RCAP or any of their respective assets or liabilities, or whether ICH, RCAP or any other party to the merger is paying or receiving reasonably equivalent value in the merger under any applicable foreign, state, or federal laws relating to bankruptcy, insolvency, fraudulent transfer, or similar matters, nor did Cassel Salpeter evaluate, in any way, the ability of ICH, RCAP or any other party to the merger to pay its obligations when they come due. Cassel Salpeter did not physically inspect ICH’s or RCAP’s properties or facilities and did not make or obtain any evaluations or appraisals of ICH’s or RCAP’s assets or liabilities (including any contingent, derivative, or off-balance-sheet assets and liabilities). Cassel Salpeter did not attempt to confirm whether ICH or RCAP had good title to their respective assets. Cassel Salpeter’s role in reviewing any information was limited solely to performing such reviews as Cassel Salpeter deemed necessary to support its own advice and analysis in connection with its opinion and was not on behalf of the special committee, the ICH board of directors, ICH or any other person.

Cassel Salpeter assumed, with the special committee’s consent, that the merger would be consummated in a manner that complies in all respects with applicable foreign, federal, state, and local laws, rules, and regulations and that, in the course of obtaining any regulatory or third-party consents, approvals, or agreements in connection with the merger, no delay, limitation, restriction, or condition would be imposed that would have an adverse effect on ICH, RCAP or the merger. Cassel Salpeter also assumed, with the special committee’s consent, that the final executed form of the merger agreement would not differ in any material respect from the draft Cassel Salpeter reviewed and that the merger would be consummated on the terms set forth in the merger agreement, without waiver, modification, or amendment of any term, condition, or agreement thereof that was material to its analyses or opinion. Cassel Salpeter also assumed that the representations and warranties of the parties to the merger agreement contained therein were true and correct and that each such party would perform all of the covenants and agreements to be performed by it under the merger agreement. Cassel Salpeter offered no opinion as to the contractual terms of the merger agreement or the likelihood that the conditions to the consummation of the merger set forth in the merger agreement would be satisfied.

In connection with preparing its opinion, Cassel Salpeter performed a variety of financial analyses. The following is a summary of the material financial analyses performed by Cassel Salpeter in connection with the preparation of its opinion. It is not a complete description of all analyses underlying such opinion. The preparation of an opinion is a complex process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. As a consequence, neither Cassel Salpeter’s opinion nor the respective analyses underlying its opinion is readily susceptible to partial analysis or summary description. In arriving at its opinion, Cassel

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Salpeter assessed as a whole the results of all analyses undertaken by it with respect to the opinion. While it took into account the results of each analysis in reaching its overall conclusions, Cassel Salpeter did not make separate or quantifiable judgments regarding individual analyses and did not draw, in isolation, conclusions from or with regard to any individual analysis or factor. Therefore, Cassel Salpeter believes that the analyses underlying the opinion must be considered as a whole and that selecting portions of its analyses or the factors it considered, without considering all analyses and factors underlying the opinion collectively, could create a misleading or incomplete view of the analyses performed by Cassel Salpeter in preparing the opinion.

The implied multiple ranges and implied value reference ranges indicated by Cassel Salpeter’s analyses are not necessarily indicative of actual values nor predictive of future results, which may be significantly more or less favorable than those suggested by such analyses. Much of the information used in, and accordingly the results of, Cassel Salpeter’s analyses are inherently subject to substantial uncertainty.

The following summary of the material financial analyses performed by Cassel Salpeter in connection with the preparation of its opinion includes information presented in tabular format. The tables alone do not constitute a complete description of these analyses. Considering the data in the tables below without considering the full narrative description of the analyses, as well as the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the financial analyses Cassel Salpeter performed.

Unless the context indicates otherwise, share prices for the selected companies used in the selected companies analysis described below were as of October 25, 2013, and estimates of financial performance for ICH were based on the ICH Projections. Estimates of financial performance for the selected companies listed below for the year ending December 31, 2013 were based on publicly available research analyst estimates for those companies.

For purposes of its analyses and opinion, Cassel Salpeter calculated an implied value of the aggregate merger consideration to be received by the holders of outstanding shares of ICH common stock of approximately $51,451,000. The implied value of the aggregate merger consideration to be received by the holders of ICH common stock was based on the cash consideration of $7.25 per share of ICH common stock, the assumption, with the special committee’s consent, that the value of the stock consideration would be equal to the cash consideration, and approximately 7,096,723 shares of ICH common stock outstanding as of October 25, 2013, per ICH management.

Cassel Salpeter calculated implied equity value reference ranges for the outstanding shares of ICH common stock based on the implied total invested capital reference ranges indicated by Cassel Salpeter’s analyses and by applying downward adjustments for ICH’s indebtedness and outstanding options. Initially, and as set forth in the analyses reviewed with the special committee on October 27, 2013, Cassel Salpeter calculated the aggregate amount of these adjustments to be approximately $7,573,000, which amount included an adjustment for restricted common stock. After further consideration in connection with the preparation of this proxy statement/prospectus, Cassel Salpeter revised this adjustment amount and the resulting implied equity value reference ranges to exclude the adjustment for restricted common stock, resulting in an aggregate adjustment amount of approximately $3,899,000. Cassel Salpeter reported the revised aggregate adjustment amount to the special committee in an addendum to the materials initially provided to the special committee.

Selected Companies Analysis

Cassel Salpeter considered certain financial data for ICH and selected companies with publicly traded equity securities Cassel Salpeter deemed relevant. The selected companies with publicly traded equity securities were:

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The financial data reviewed included:

Cassel Salpeter calculated the following multiples with respect to the selected companies:

Total Invested Capital Multiple of

High

Mean

Median

Low

LTM Revenue

2.05x

1.07x

0.83x

0.28x

2014P Revenue

1.35x

0.76x

0.72x

0.24x