Erica McGinnis, who has led the Advisor Group for the past three years, is stepping down from the post. Executive Chairwoman Valerie Brown temporarily replace her as president and CEO, and Brown and McGinnis will work together as the Advisor Group moves from being a part of insurance giant AIG to being owned by the private-equity firm Lightyear Capital.
“Erica McGinnis has accepted a role of executive vice president, head of transitions – leading the separation from AIG,” said spokesman Kevin Dinino, in a statement. “A search is underway for a new president and CEO … As president and CEO, Erica has contributed immeasurably to Advisor Group, and on behalf of the board and management team we sincerely thank her for her tireless efforts toward building the business that we have today.”
The Advisor Group includes some 6,000 independent advisors affiliated with FSC Securities Corp., Royal Alliance Associates, SagePoint Financial and Woodbury Financial. These broker-dealers are led by Jerry Murphy, Dmitry Goldin, Jeff Auld and Rick Fergesen, respectively.
McGinnis was tapped to lead the firm in September 2013 after then-CEO and President Larry Roth left the firm to become CEO of Realty Capital Securities, the former entity that owned Cetera Financial Group; RCS went through bankruptcy and became Aretec; Roth now heads Cetera.
Lightyear and its affiliates sold Cetera to RCS Capital several years ago for more than $1 billion.
Recruiter Jon Henschen says he is unsure of why McGinnis decided to leave her executive role. “Those in upper management step down to spend more time with family or if after being asked to do so due to a clash with others or even competency issues,” he explained in an interview with ThinkAdvisor.
“It’s my understanding that posts at firms like AIG can be all-consuming,” Henschen said.
As for who could take the reins from Brown, the recruiter speculates that either one of the broker-dealer presidents could be tapped for the job or someone will be selected from outside the Advisor Group, which would take more time. “It’s pretty quick if they hire from within” he said.
In mid-July, the Financial Services Institute said Brown would become a board member for the organization in 2017. Brown, the former CEO of Cetera Financial, joined Advisor Group earlier this year around the time that it announced the Lightyear Capital deal.
In March, RCS Capital and Cetera reached a settlement with Lightyear Capital over the recruiting of executives by the private equity group. RCS and Cetera alleged that Lightyear had enticed senior officers to leave Cetera and join it, which RCS said threatened its bankruptcy proceedings and Cetera’s restructuring plans.
Two former Cetera executives now with Lightyear and its affiliates — Cynthia Hamel and Susan Theder — have agreed not to perform work or services in ways that affect the Advisor Group’s competitive position vis-à-vis Cetera through at least Sept. 4 and no later than Dec. 4.
Furthermore, Lightyear and its affiliates have agreed to not hire, employ or retain senior managers of Cetera-related companies through Sept. 26.