Cetera Financial Group is closing down one of its broker-dealers, J.P. Turner & Co., and inviting select advisers to join another of its firms.
Over the past few weeks, about half of the 300 advisers at J.P. Turner & Co. have been invited to move to Summit Brokerage Services Inc., another Cetera broker-dealer, according to several brokerage executives and industry recruiters. The remainder of the J.P. Turner reps not going to Summit are scattering across the industry, industry executives and recruiters said.
RCS Capital Corp., or RCAP, acquired J.P. Turner and Summit in 2014, placing them under the Cetera umbrella. Both acquisitions were part of a buying binge of independent broker-dealers led by Nicholas Schorsch, RCAP's largest shareholder who was formerly its executive chairman. After each IBD deal was announced, RCAP management routinely stressed that the firms would remain separate businesses.
In an email to InvestmentNews, Larry Roth, the CEO of Cetera, said that the decision to close J.P. Turner did not signal an imminent larger consolidation among its various firms.
“We emphasize that this transition is not part of a broader consolidation strategy, but rather, is intended to address a unique and clear demand from a significant number of J.P. Turner's advisers,” according to Mr. Roth's email.
“Cetera Financial Group is winding down J.P. Turner in order to enable advisers at that firm to more rapidly access the full range of services and support our network offers through Pershing,” wrote Mr. Roth. “Since they became part of our network, J.P. Turner advisers have voiced a strong desire to transition to the Pershing platform. After extensive review, it became clear that the most expeditious and seamless way for this to happen was to invite a significant number of these advisers to Summit Brokerage Services.”
J.P. Turner has used a different clearing firm in the past.
An industry recruiter said Pershing was not going to allow J.P. Turner to join its platform. “The firm wasn't going to be allowed to convert to Pershing because of its reputation,” said the recruiter, Jonathan Henschen.
The firm has 36 disclosure items, including 24 regulatory actions and 12 arbitrations, according to its BrokerCheck report.
Asked about Mr. Henschen's comment, Andrew Backman, an RCAP spokesman, said the firm had no comment beyond Mr. Roth's statement.
A spokesman for Pershing, Paul Patella, did not return a call to comment.
J.P. Turner has recently become known as a large seller of alternative investments such as nontraded real estate investment trusts that Mr. Schorsch is best known for as the chairman and CEO of AR Capital, or ARC.
Mr. Roth said that he expected the transition of the J.P. Turner brokers to be completed by October.