Cetera Financial Group says it has moved to close an independent broker-dealer it acquired in 2014, mainly due to issues regarding its main clearing partner.
“Cetera Financial Group is winding down J.P. Turner in order to enable advisors at that firm to more rapidly access the full range of services and support our network offers through Pershing,” said CEO Larry Roth in a statement shared with ThinkAdvisor late Thursday.
When it became clear that Pershing would not add J.P. Turner to its clearing platform, advisors decided it made sense for the roughly 300 J.P. Turner reps to move to Summit Brokerage Services, another BD acquired last year by Cetera’s parent firm, RCS Capital (RCAP).
“My understanding is that group’s advisor council moved to go to Summit after it was clear that they couldn’t move their account to Pershing,” said recruiter Jon Henschen in an interview. “In other words, the reps voted to go to Summit.”
According to Roth, the J.P. Turner advisors “voiced a strong desire to transition to the Pershing platform. After extensive review, it became clear that the most expeditious and seamless way for this to happen was to invite a significant number of these advisors to Summit Brokerage Services.”
A large number of the J. P. Turner reps, though, are not being ”invited” to make the move.
“We are talking about [Cetera] cherry picking advisors” based on yearly fees and commissions, or production, stated Henschen, who is head of Henchen & Associates. “I’m not sure of the exact cutoff, but it means they are probably keeping the best 150 [in terms of production] and have been taking compliance issues into consideration, as well.”