After bankruptcy, Cetera Financial Group looking to sell Legend Equities Corp.

Cetera Financial Group, off to a fresh start Wednesday after its parent company emerged from bankruptcy, is likely to sell its broker-dealer Legend Equities Corp., which focuses on retirement plans for teachers and employees of tax-exempt organizations. Cetera's former parent company, RCS Capital Corp., or RCAP, entered into a pre-packaged Chapter 11 bankruptcy in January. RCAP was formerly controlled by Nicholas Schorsch, who has no role in the new company. The holding company that now owns Cetera is called Aretec, which is Cetera spelled backwards. The firm is now owned by its former creditors, which include large financial institutions such as Fortress Investment Group, Carlyle Investment Management and Eaton Vance Management. The sole focus of Cetera is independent broker-dealers and their financial advisers. The company performed a strategic review of Legend during the bankruptcy period and concluded that it was best to explore selling it, said Larry Roth, who is remaining as the CEO of Cetera, which currently consists of 10 broker-dealers and 9,000 advisers. Cetera is beginning to consolidate its broker-dealer network as a way to reduce costs. “Legend is a very well-respected firm that focuses on the 403(b) market and school teachers,” said Mr. Roth. “It's likely to be spun off. That in no way reflects a lack of respect for its business.” Other highlights of Cetera's new start include a $150 million capital infusion into the company by the new owners and the appointment of Robert Moore as non-executive chairman of Cetera's board, according to Mr. Roth. “It's a relief to be through the bankruptcy process and clearly focused on the future,” Mr. Roth said. “I am thankful that the Cetera advisers have continued to have confidence in the business and the executives who serve them.” (More: Appointment of former LPL exec Robert Moore to Cetera's board could help embattled B-D restore its brand) Mr. Moore resigned as president of LPL Financial in March 2015. He was expected to take over as CEO of LPL from Mark Casady, but left the company after he was passed over by LPL's board. Mr. Moore is currently the CEO of Legal & General Investment Management America, an institutional money manager. He will continue in that role while serving as Cetera's non-executive chairman. The company expects to focus on growth initiatives in the near future, Mr. Roth said. “The management team identified strategic projects in our budgets going forward,” he said. “We are reviewing with Robert and the board. The goal is to help advisers better serve their clients and manage businesses in this ever-changing environment, particularly around the new Department of Labor fiduciary rule.”