The top news within the brokerage business over the past month includes the following developments:
Cetera Cetera Financial Group is buying some broker-dealer and advisory-business assets from Foresters Financial, which includes 500 independent advisors. The firm is not disclosing the value of the transaction but says the Foresters advisors will join its self-clearing platform.
As part of the deal, Cetera also will have the option of taking over leases on more than 40 branch offices; it also can make offers of employment to staff in Foresters’ brokerage and advisory business.
“The business has an outstanding new entrants program we plan to leverage so that together, we can continue to help more clients achieve financial well-being through an advice-centric experience,” according to Cetera Financial Group President Adam Antoniades.
Like Cetera’s other businesses — Cetera Advisors, Cetera Advisor Networks, Cetera Financial Institutions, Cetera Financial Specialists, First Allied Securities and Summit Brokerage Services — Foresters will operate as an independent broker-dealer; led by Sean Casey, it also will be a division within Cetera Financial Institutions.
In a separate transaction, Toronto-based Foresters Financial is selling its U.S. asset management business, including First Investors mutual funds, to Macquarie Investment Management, which owns the Delaware Funds.
HD Vest Industry watchers are labeling HD Vest owner Blucora’s planned acquisition of tax-focused broker-dealer 1st Global as “big news, but not at all surprising,” according to popular blogger and financial planner Michael Kitces.
“Blucora owns TaxAct [software] as well, and was already building synergies around HD Vest’s base of CPA-centric advisors,” Kitces said on Twitter. “1st Global was ‘the other’ big CPA-centric broker-dealer. Just merges together two already-strategically-well-aligned firms.”
The $180 million stock deal involving two Dallas-Fort Worth independent broker-dealers could results in a firm with close to 4,500 advisors and $60 billion in total assets. News of the IBD acquisition comes about 3 1/2 years after Blucora announced plans to buy HD Vest.
“And the consolidation continues!” tweeted Kyle Van Pelt, an executive at SS&C Advent and blogger. “Expect to read a bunch more of these over the next three to four years.”
According to Todd Mackay, interim CEO of HD Vest, meetings with 1st Global leaders first took place more than a year ago: “It was evident right off the bat that the two companies had a strong alignment and a shared culture of empowering employees and advisors in the best possible way and looking at [the business] through the eyes of our advisors.”
The common vision, Mackay said, is focused on “truly serving clients with advisors focused on maximizing their after-tax returns. We believe the potential of the combined entities would significantly enhance opportunities for advisors to grow and better serve clients.”
Plus, the executive explained, both HD Vest and 1st Global clear through Fidelity’s National Financial Services. (Before Blucora, HD Vest used Wells Fargo.) “There is going to be minimal disruption across the networks and families,” he said. “Both companies run the NFS platform and use Envestnet for our trading systems.”
Janney Janney Montgomery Scott says it recruited 14 financial advisors with about $1.1 billion in combined client assets in the first quarter. They moved to Janney from Merrill Lynch and Wells Fargo.
“Janney had another successful quarter recruiting leading financial advisors with experience and expertise in all aspects of wealth management,” according to Jerry Lombard, president of the firm’s Private Client Group. “We’re happy to welcome them and are proud these advisors recognized the value of our entrepreneurial platform and client-focused culture.”
The new employees include four teams, six individual advisors and seven associates, who are based in eight branch offices. As of April 1, Janney has about $80 billion in assets under advisement; the firm has recruited 200-plus advisors since 2015.
The advisors moving to Janney from Merrill include: Philip Fried and Robert Mouro with the Fried Mouro Group of Raleigh, North Carolina; Cathryn Budd of Atlanta; Michael Hassell of Radnor, Pennsylvania; and Harlon Neal of Goldsboro, North Carolina.
Joining from Wells Fargo are: Karl Ernst and Roberto Rosa of the Ernst Rosa Wealth Management Group of Miami; Donna Judge and Scott Trevethan of Judge-Trevethan Wealth Advisors in Glastonbury, Connecticut; Frederick Leonard and Charles Leonard of Leonard Wealth Management in Mystic, Connecticut; Wayne Howle of Florence, South Carolina; and Anthony Jessuck Jr., of Mystic, Connecticut.
KMS KMS Financial Services, an independent broker-dealer owned by Ladenburg Thalmann, has named Erinn Ford to the role of CEO. Ford will take the reins from Eric Westberg, who will become chairman emeritus.
“The decision to offer Erinn the CEO position was an easy one, due to her deep appreciation of our history and culture, and because of the tremendous contributions she has made to the firm over the past year as president,” according to Westberg.
Earlier, Ford was president of Cetera Advisors (May 2014 to February 2018), after serving in other roles since January 2012. She also worked for Pacific West Financial Group from 1990 to 2012.
“I am honored to assume the torch from Eric and eager to build upon his industry leadership in supporting a financial advisor-focused approach to all that we do,” she said in a statement.
Founded in 1971, Seattle-based KMS had $16.4 billion in client assets and 337 investment professionals as of Dec. 31. Other IBDs in the Ladenburg Thalmann network are Securities America, Triad Advisors, Investacorp and Securities Service Network.
Raymond James Raymond James said Chief Financial Officer Jeff Julien — who has been with the firm since 1983 — will retire at year-end. He is set to be replaced by Paul Shoukry, the firm’s treasurer and senior vice president of finance and investor relations, but will remain a director on the bank board and a member of several management committees.
“Jeff has had an extraordinary career, serving over 32 years as Raymond James’ CFO, during which time we have enjoyed 124 consecutive quarters of profitability,” according to Chairman and CEO Paul Reilly.
In a related development, Jennifer Ackart, senior vice president and chief accounting officer, has been tapped as CFO of the firm’s employee advisors channel. This post was previously held by Richard (Rick) Franz, who retired earlier this year.
Raymond James also has hired a Florida complex manager from Morgan Stanley to lead its employee channel’s North Florida Complex: Gregg Stupinski. As complex manager, he will oversee 10 branches of Raymond James & Associates from Pensacola to Jacksonville.
Prior to moving into branch and regional sales managerial roles for the wirehouse in Southwest Florida in 2006, Stupinski was an advisor with Citigroup-Smith Barney for more than a decade. He started his career in financial services in 1993.
The news comes about a month after Raymond James hired veteran Morgan Stanley branch executive Bill Drew to run its new Southern New England Complex for employee advisors. Drew, who spent the past 24 years with Morgan Stanley and Smith Barney, was put in charge of Raymond James & Associates’ branch offices in Massachusetts, Rhode Island and Northern Connecticut.
Wells Fargo Wells Fargo — which is selling its retirement-plan unit for $1.2 billion to Principal Financial Group — is searching for a new leader from outside the bank to take over from retiring President and CEO Tim Sloan. The news comes two and a half years after Sloan took the reins from the embattled John Stumpf, who led the bank while it opened several million fake accounts.
“There’s been too much focus on me … and I felt I was becoming a distraction,” Sloan said. He has been replaced on an interim basis by Allen Parker, who has been general counsel for the past two years.
Betsy Duke, now chair of the bank and a former Federal Reserve governor, said “we have a lot more work to do” regarding the bank’s challenges. (It’s now operating under a Fed Reserve asset cap.)
The bank recently named Tim Traudt to be its interim head of wealth management, replacing Jay Welker. That development occurred several months after Welker said he would retire following a report in The Wall Street Journal on gender-bias complaints in the unit, which named him specifically. In November, the bank said it had investigated the matter and found no such bias.
Janet Levaux is editor-in-chief of Investment Advisor. She can be reached at email@example.com.