Cetera CEO Robert Moore.

Cetera Financial Group said it has struck a deal to sell Legend Group, a broker-dealer with about 350 advisors and $6 billion in assets, to Lincoln Investment Capital.

Legend focuses on clients with 403(b) plans—retirement plans for teachers and other non-profit employees. It is based in Palm Beach Gardens, Fla. Terms of the deal were not announced.

“As publicly disclosed earlier this year, our exploration of a potential sale of the Legend Group was guided by our plan to exit businesses that were not core to our future growth plans, combined with our commitment to identify a transaction opportunity with a company that understands and supports the Legend Group’s unique strengths in the 403(b) plan space,” said Cetera CEO Robert Moore in an interview.

“We expect the transaction to be completed by early-2017,” explained Moore, who recently took the helm at Cetera from Larry Roth, now serving as a consultant through year-end.

“These firms know each other well. Though we compete against each other in the industry, we share common values and history—both firms help people retire well,” said Lincoln Investment President & CEO Ed Forst, in an interview with ThinkAdvisor.

“Together, Lincoln and Legend are big enough to compete [in the 403(b) space]. We are very excited to welcome the Legend advisors and employees and look forward to it,” Forst said.

The clients of Legend Group will not have to move accounts or “repaper,” he explained, because the assets will remain custodied at Pershing.

Asked if Legend might face any legal issues with the growing number of lawsuits, Forst said the legal action is concentrated in “a different segment of the marketplace,” namely with state-based basic retirement plans.

“We are active in the K-12 and non-profit plans that are supplemental to 403(b) plans,” he explained. 

The combined business should include about 1,100 financial advisors and $30 billion in client assets, according to Forst.

Cetera, which before the Legend deal announcement had about 9,000 affiliated reps, includes the following broker-dealers: Cetera Advisors, Cetera Advisor Networks, Cetera Financial Institutions, Cetera Financial Specialists, First Allied Securities, Girard Securities and Summit Brokerage Services. It recently merged reps with Investors Capital into Cetera Advisors and those with VSR Group into Summit.

The broker-dealer group’s current owners include Fortress Stategic Capital, Carlyle Investment Management and Eaton Vance Management. These investors took ownership during the bankruptcy proceedings at RCS Capital, the earlier name of Cetera’s parent company, which is now Aretec.

The bankruptcy was tied to Nicholas Schorsch, a founder of RCS Capital, and some of his business partners, who became embroiled in an accounting scandal tied to a nontraded real estate investment trust group and related matters roughly two years ago. 

Last week, the former CFO of American Realty Capital Properties (ARCP), an entity founded by Schorsch, was arrested for overstating the publicly traded REIT’s financial performance.