Nicholas Schorsch's RCS Capital Corp. is shaking up its management, announcing that Valerie Brown, the longtime head of Cetera Financial Group and its predecessor ING broker-dealers, has stepped down and is being replaced by Larry Roth, whom Mr. Schorsch plucked from Advisor Group last year to lead his wholesaling broker-dealer, Realty Capital Securities.
The change comes as the financial advice industry has been wondering how Mr. Schorsch would assemble the disparate pieces of his retail broker-dealer, which currently houses about 8,000 independent reps and advisers. Another 1,000 reps are slated to join RCS Capital after three pending broker-dealer acquisitions are completed this quarter.
“With [Cetera Financial Group] operating as a unit of [RCS Capital], Ms. Brown believes now is the right time for her to transition from her role as CEO of Cetera into a consulting role with Cetera and on to other pursuits,” Michael Weil, president of RCS Capital, said in a statement Tuesday. “Ms. Brown has said that she looks forward to witnessing the continued achievements of Cetera” and RCS Capital, which is commonly referred to by its ticker symbol RCAP.
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RCAP gave an inkling of management changes to come last week when it announced its first management shake-up since Mr. Schorsch, executive chairman, began his buying binge of broker-dealers last June, the same month RCAP listed its shares.
Last Thursday, the company said Adam Antoniades, long-time president and chief executive of First Allied Securities Inc. had been replaced in those roles by Kevin Keefe, who until recently was executive vice president and head of wealth management at Advisor Group, the broker-dealer network controlled by American International Group Inc. Advisor Group was formerly headed by Mr. Roth, who has been involved in building out Mr. Schorsch's broker-dealer network.
Mr. Antoniades is now Mr. Roth's second in command, with the title of president of Cetera Financial Group.
Ms. Brown could not be reached on Tuesday morning to comment.
Her decision to leave Cetera just as it is beginning its complicated process of integrating nine separate broker-dealers may come as a surprise to many in the financial advice industry. Mr. Schorsch consistently praised her in comments such as conference calls with securities analysts.
He has also consistently downplayed any involvement by Mr. Roth in the management of the retail broker-dealer platform. Instead, Mr. Schorsch insisted that Mr. Roth was out knocking on doors in an attempt to expand the network of broker-dealers that sell nontraded real estate investment trusts sponsored by Mr. Schorsch's real estate syndicator, American Realty Capital.
“No doubt this is a shift that many people said was going to happen,” Mr. Schorsch said in an interview Tuesday. “Many people assumed Larry was going to take” control of the fledgling broker-dealer network, he said.
Mr. Roth is assuming overall executive responsibility for RCAP's acquired broker-dealers, First Allied Securities and the four Cetera Financial Group firms. He will also eventually oversee Investors Capital, Summit Brokerage Services and J.P. Turner & Co. after those deals close.
In the interview, Mr. Schorsch stressed that the announcement of Mr. Roth's becoming CEO of Cetera Financial was part of an effort to take a “very careful and prudent look at” the management structure of the company and its disparate broker-dealers. “Some [executives] came from Cetera, some came from First Allied,” he said.
“We have a larger management team than any other broker-dealer in the business,” he said. “We are continuing to bring great talent [to the company]. We are continuing to hire every day and build a great team. It's not about one person. It's not about Valerie or me or Larry Roth. It's about building a team across the board that can do everything we need to do in a new world” for broker-dealers, he said.Valerie Brown on how the advice industry remains relationship-focused