Robert Moore, the former president of LPL Financial, is returning to the brokerage industry as chairman of Cetera Financial Group after it's parent company emerges in the coming weeks from bankruptcy proceedings, according to a source familiar with the move who asked not to be named.
Mr. Moore resigned as president of LPL Financial in March 2015. He was widely expected to take over as CEO of LPL from Mark Casady, but did not get the nod from LPL's board. Mr. Moore is currently the CEO of Legal & General Investment Management America, an institutional money manager. He is expected to continue in that role while serving as Cetera's non-executive chairman.
Mr. Moore did not return phone calls on Wednesday seeking comment.
Mr. Moore brings a wealth of experience in the financial services industry to Cetera, which is home to 10 broker-dealers and 9,000 advisers. He joined LPL Financial in 2008 as its chief financial officer. Prior to LPL, Mr. Moore served as CEO and chief financial officer at ABN AMRO North America and LaSalle Bank Corp.
Cetera parent company, RCS Capital Corp., or RCAP, filed for bankruptcy protection in January. RCAP was bloated with hundreds of millions of dollars in debt after a broker-dealer buying binge by its former controlling shareholder, Nicholas Schorsch, who is no longer involved in running the company.
The purpose of RCAP's Chapter 11 bankruptcy was to improve the company's balance sheet, reduce debt and dump certain non-brokerage assets.
David Orlofsky, chief restructuring officer of RCS Capital Corp. and senior managing director of Zolfo Cooper, did not comment directly about Mr. Moore becoming chairman of the new company.
The company is putting in a new board, he wrote in a statement.
“Given Cetera's strong value proposition, we're confident that the new board will attract highly respected individuals,” Mr. Orlofsky wrote. “Beyond that, it would be premature to publicly discuss any details until Board composition is finalized.”
Meanwhile, the consolidation of Cetera's broker-dealers is beginning. Known for selling alternative investments like nontraded real estate investment trusts, VSR Financial Services Inc. will be merged with into another Cetera firm, Summit Brokerage Services Inc., according to sources.
Summit reported $111 million in revenue last year, according to the most recent survey of broker-dealers by InvestmentNews. VSR Financial last responded to the survey in 2013, when it reported $107.3 million in revenues.
Likewise Investors Capital Corp. will be merged into Cetera Advisors. The former is home to 458 advisers and produced $98.8 million in revenues in 2015; the latter has 1,180 reps under its roof and last year produced $$297.6 million in revenues. Both firms clear with Pershing.
"We will be selective with respect to the advisers invited from these firms to affiliate with our network's other broker-dealers, in order to ensure the best fit possible with our company's broader mission and values following the completion of our transformation process," wrote Cetera spokesman Joseph Kuo in an email.
Consolidating operations at the Cetera broker-dealers has been expected as a way to reduce costs. J.P. Turner was merged into Summit last year, but only those J.P. Turner advisers invited to join Summit made the move. A similar plan is in place with the consolidation of VSR Financial, with close to 300 advisers, into Summit, which is home to 450 advisers, noted Jodie Papike, executive vice president at Cross-Search, a recruiter for independent broker-dealers.
Both VSR Financial and Summit use the same clearing firms, Pershing and First Clearing. Summit has about 80 staff to work with its advisers.
“The first question is, how are you going to service all these advisers,” Ms. Papike asked. “Where is the staff going to come from? And how much work will Summit put into this?” She added that VSR advisers were told this week that the firm would close by the end of August.