The head of Cetera Financial Group, a group of independent broker-dealers owned by RCS Capital (RCAP), says the firm isn’t likely to sold or spun off any time soon and is focusing on day-to-day operations.
After sister firm American Realty Capital Properties (ARCP) revealed $23 million of accounting errors in late October and RCAP pulled out of a deal to buy part of Cole Capital from ARCP in early November, executives made it clear they were considering all options on a call with investment analysts about two weeks ago.
“There’s been no conversation around selling [Cetera],” said Cetera President Larry Roth, in an interview with ThinkAdvisor.
Roth adds that he and other executives spoke with affiliated advisors earlier this month and that “regular communications will continue.”
“It’s business as usual,” he said. “We are making technology upgrades and other investments, including one [about the Business Plan Challenge]. There’s not a lot of concern, to be honest.”
Cetera said early Tuesday that it had picked 61 affiliated advisors to receive a total of $6.7 million as part of its Business Plan Challenge program.
The awards aim to help the winning advisors move aggressively to implement growth plans. According to Cetera, which includes 11 broker-dealers and about 9,700 reps, the broker-dealers fund the plans with support from RCS Capital and Cetera.
“The broker-dealers are very well capitalized and have been so for a long time,” Roth said. “Retention through the third quarter and into last month was north of 97%, based on revenue, and recruiting has picked up in the past 90 days … business remains very strong.”
Independent advisors and advisor groups submitted close to 400 applications for the challenge grants, according to Cetera.
“This past June, RCS Capital CEO Michael Weil and others talked about how to best invest in the firm,” explained Roth. “It makes more sense to invest in the current practices of advisors, along with IT and services, than anywhere else, given the size of the firm today.”