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Citing DOL Rule, Girard Goes Indie With Cetera

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Girard Securities has decided to become an independent advisor group affiliated with Cetera Advisor Networks, and to wind down its own broker-dealer platform.

The independent broker-dealer was acquired into the Cetera network under its prior owners in a transaction announced in 2014.

With 200 independent advisors supporting $7.7 billion in client assets, Girard is expected to comprise one of the largest independent advisor groups affiliated with Cetera Advisor Networks.

The Girard Securities broker-dealer wind-down is expected to start in early November, subject to FINRA approval.

While Girard decided to stop being a broker-dealer, it will otherwise remain the same in terms of leadership, organization, brand and culture.

Girard Securities CEO Susie Woltman Tietjen will serve as regional director of the Girard team going forward, and Girard’s leadership team will continue to operate from Girard Securities’ current headquarters location in San Diego for the foreseeable future.

The move is, in part, a way to relieve the regulatory burdens of being a broker-dealer under the Labor Department’s new fiduciary rule.

“With the growing regulatory and operating burdens associated with running our own independent broker-dealer removed, the entire Girard organization will be able to devote our full attention to the mission of helping our advisors build the businesses they want,” Woltman Tietjen said in a statment. “Just as importantly, our new structure positions us to maintain the close-knit, family-operated culture that has always formed the backbone of our organization.”

According to Tom Taylor, president of Cetera Advisor Networks, smaller and midsize firms are increasingly seeking ways to remain together as autonomous entities, but without the administrative and regulatory burdens of being a broker-dealer under the Labor rule.

“The fiduciary era that our industry is entering has translated into a rising demand among advisors and end clients for a truly advice-centric experience, in direct contrast to the sales or product-centric approach utilized by many in this space,” Taylor said in a statement.

Two months ago, Cetera Advisor Networks announced it had acquired HBW, an IBD with 55 independent advisors supporting over $800 million in client assets.

Like Girard, HBW wound down their broker-dealer platform but otherwise stayed together under the same brand, leadership, organization and culture as an independent advisor group affiliated with Cetera Advisor Networks.

“The transition of both Girard as well as HBW from broker-dealers to Regions affiliated with Cetera Advisor Networks is a trend that we’re confident will continue,” Taylor said in a statement. 

According to Cetera, these two announcements show the industry that the predictions made by some experts that the smaller and midsize firms would all go extinct with the implementation of the fiduciary rule were not necessarily accurate.

By converting into an independent advisor group, these smaller firms could enjoy a strong future as independent entities minus the broker-dealer regulatory burdens.

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