Though it is not official yet, Robert Moore is set to be named nonexecutive chairman of the board for the parent company of the Cetera Financial Group, according to a source familiar with the board selection process.
Moore, the former president of rival independent broker-dealer LPL Financial (LPLA), is expected to be tapped formally for the post when Cetera’s parent company, RCS Capital, wraps up its Chapter 11 procedures in May or June, the source adds.
“Consistent with any change of ownership, and as previously disclosed, we are putting in place a new board of directors upon the company’s emergence from the restructuring process,” said David Orlofsky, chief restructuring officer of RCS Capital Corp. and senior managing director of Zolfo Cooper, a restructuring services group, in a statement.
“Given Cetera’s strong value proposition, we’re confident that the new board will attract highly respected individuals,” Orlofsky added. “Beyond that, it would be premature to publicly discuss any details until board composition is finalized.”
As part of the restructuring arrangement, Larry Roth plans to stay on as CEO of Cetera Financial Group and “is looking forward to partnering closely with the new board of Cetera’s parent company to open a new chapter of growth for the organization,” explained Orlofksy.
Tuesday was the last day when objections to the company’s bankruptcy plan could be filed, and a search of public court documents did not reveal any further objections, a source familiar with the company’s bankruptcy process says.
Moore, who served as president of LPL Financial from May 2012 to March 2015, is now CEO of Legal & General Investment Management America, an asset manager, and should remain in that post while serving on the Cetera board.
Also on Wednesday, the firm confirmed that it likely will merge VSR Financial Services into Summit Brokerage Services and bring Investors Capital Corp. into Cetera Advisors.
“Based on extensive advisor feedback gathered across Cetera, we will be integrating both VSR and ICC within other firms in our network. We will be selective with respect to the advisors invited from these firms to affiliate with our network’s other broker-dealers, in order to ensure the best fit possible with our company’s broader mission and values following the completion of our transformation process,” said Joseph Kuo, a spokesperson for Cetera Financial Group, in a statement.
“We are taking this step to drive an enhanced and more focused support experience for selected advisors from these firms. We expect to share further details when we announce the completion of our transformation process soon,” Kuo explained.
At least one observer said that this consolidation makes sense.
“This shouldn’t come as a surprise, given that these firms never seemed like a very strong fit with the rest of the Cetera network,” said Jeff Nash, president of the Nash Consulting Group, a practice-management firm that has worked with several Cetera firms, in a statement.
“Cetera has been doing well with advisor retention …, and that’s a position the company won’t undermine by implementing any wind-down plans that treat advisors unfairly, even those the company may not want to invite to join its other firms going forward,” Nash explained. “Cetera appears to be providing impacted advisors with ample time to make decisions on where they should go next.”
The Firm’s Future