Cetera Financial's Future Owner Is Revealed

Cetera Financial includes the broker-dealers Cetera Advisors, Cetera Advisor Networks, Cetera Financial Institutions, Cetera Financial Specialists, First Allied Securities and Summit Brokerage Services.

According to Moore, Cetera broker-dealers recruited 784 advisors in 2017. “We have gathered strong momentum …, and with Genstar hope to reignite and accelerate it. We see ourselves as the destination of choice for high-quality advisors,” he said.

Jeff Nash, head of the consulting group BridgeMark Strategies, says the Genstar news puts a lot of industry gossip about the firm’s future to rest: “Cetera always publicly said that they were going through their strategic review from a position of strength, and this outcome proves all the naysayers dead wrong about Cetera’s long-term viability,” he said in a statement shared with ThinkAdvisor.

Genstar’s equity stake, Nash adds, should prove to be “an enormous shot in the arm for Cetera in terms of its ability to more aggressively recruit financial advisors and financial institutions to its various member firms.”

Turning Another Page

Last year, Cetera moved to renegotiate its credit facilities, which followed the restructuring of its operations in 2016 — when it became a stand-alone entity after the bankruptcy of its former parent company, RCS Capital (later renamed Aretec, or Cetera spelled backward).

RCS Capital, which was led by then Executive Chairman Nicholas Schorsch, bought Cetera for $1.15 billion from Lightyear Capital in 2014. Later that year, an entity in the nontraded REIT space that Schorsch was involved with became embroiled in an accounting scandal and related troubles, which spilled over onto RCS Capital.

Schorsch has no more ties to Cetera or RCS Capital, nor does Larry Roth. Roth led Cetera’s broker-dealers from May 2014 to September 2016, when Moore was tapped as the group’s leader.