Robert Moore faces a series of daunting questions as he settles in as the new chief executive of
Cetera Financial Group.
The owners of the firm are investors that bought the debt of Cetera Financial's former parent, RCS Capital Corp., and include some of the most noted money management firms in the industry such as
Fortress Investment Group,
Carlyle Investment Management and
Eaton Vance Management.
RCS Capital filed for bankruptcy in January. Cetera emerged as a new company in May, when
Mr. Moore was named its non-executive chairman.
As part of RCS Capital's corporate restructuring, Cetera Financial received a $150 million infusion of new capital from the owners of RCAP debt. The restructuring reduced RCAP's debt and obligations to $650 million, from $1.1 billion.
As Cetera Financial introduces new tools and resources for Cetera's 9,000 advisers in the coming weeks, the big question is what is Mr. Moore's long-term plan to satisfy the company's owners and make them whole?
(Related read: RCAP files for bankruptcy; Cetera to emerge as independent company)
According to industry executives and Cetera advisers, Mr. Moore has three options to consider: Does he consolidate all 10 Cetera broker-dealers, cut costs dramatically or sell pieces of Cetera —including individual broker-dealers — to raise cash?
“If I'm an adviser in one of those seats, I'm asking those questions,” said Jodie Papike, executive vice president at
Cross-Search, a recruiting firm for advisers and broker-dealer executives. “Is
consolidation and reducing expenses going to happen more quickly now that Robert is CEO?”
Cetera Financial Thursday announced that Mr. Moore was appointed CEO and Robert Dineen, a longtime industry executive, was its non-executive chairman of the board. Larry Roth, the CEO of Cetera since 2014, who led the company through its bankruptcy, will serve as a consultant to Mr. Moore, who will take over on September 12.
(Related read: Big broker-dealer shakeups)
When asked whether he would quickly move to roll up Cetera's broker-dealers, Mr. Moore said, in a statement, that he “would emphasize that we recognize the unique value proposition of Cetera's multi-brand model, and we remain committed to preserving our multi-brand approach as a firm.”
Regarding cost cutting, Mr. Moore said that the company's reorganization plan “strikes the right balance in enabling us to efficiently manage expenses while investing additional resources in enhanced tools and platforms for our advisors and institutions.”
He said there was “nothing new to report” about the company's wind-down plan when asked any firms would soon be sold.
In a company statement Thursday, Mr. Moore said the firm expects to have “a number of important positive announcements in the coming weeks, from new tools and resources for our advisers and institutions, to significant progress in previously disclosed orderly wind-down and divestiture activities with respect to noncore firms in our network.”
“The impression is that he is going to increase services while reducing expenses to create profitability,” Ms. Papike noted.
Mr. Moore, the former president of
LPL Financial, clearly has his supporters in the industry.
“[He] is driven. He's going to get the job done,” said one industry executive, who asked not to be named. “I think he will be very successful.”
Cetera is focused on implementing the
Department of Labor's new fiduciary rule, according to Mr. Moore. Firms must begin complying with the DOL's new regulation requiring financial advisers to put clients' interests ahead of their own when making recommendations for retirement accounts in April, with full implementation required by January 2018.
(Related read: FAQs: Got questions about the DOL's fiduciary rule? We've got answers.)
“We have been working very, very diligently on DOL preparedness,” Mr. Moore said in an interview Thursday, adding that specifics surrounding those efforts will be unveiled later this month.
More broadly, his primary task will be to “unlock and reach the potential” of Cetera, Mr. Moore said, while working to position the El Segundo, Calif.-based company as a leader impacting the future of financial advice. Mr. Moore said he was asked to consider becoming CEO as the board was assessing ways to reach its “full capabilities.”
Adam Antoniades will continue to serve as Cetera's president, reporting directly to Mr. Moore.
Mr. Roth joined Cetera's former parent, RCS Capital, from
AIG Advisor Group in 2013. He led the parent's wholesaling broker-dealer, Realty Capital Securities, before
replacing Valerie Brown as CEO of Cetera Financial in May 2014.
“We thank Larry Roth for his many contributions to our company, and welcome his assistance through the transition," Mr. Dineen said in a Thursday's statement.
Mr. Roth will serve as a consultant to Mr. Moore, providing strategic counsel and guidance.
Mr. Moore is replacing him as CEO about three months after Cetera appointed Mr. Moore chairman.
Mr. Moore was previously the chief executive of institutional asset manager
Legal & General Investment Management America Inc. Before that, he was president of
LPL Financial, an independent broker-dealer based in Boston, until resigning in March 2015.
