Global Wealth Partners, a $400 million asset firm that was an affiliate of First Allied Securities, one of the 10 broker-dealers in the Cetera Financial Group network, has jumped ship to DFPG Investments Inc.
Global Wealth Partners, with 12 registered representatives and offices in San Diego and San Jose, Calif., moved last month, according to Ryan Smith, president of DFPG, which specializes in real estate products.
RCS Capital Corp., or RCAP, the parent company of Cetera, announced Monday it was filing for
Chapter 11 bankruptcy protection by the end of the month. Cetera is not expected to be part of the Chapter 11 filing.
Mr. Smith said the Global Wealth team brings to 24 the number of advisers it has hired from Cetera firms since July. Collectively, the advisers brought in about $500 million in assets into DFPG, Mr. Smith said.
“There are a lot of reps that call us,” said Mr. Smith. “That uncertainty is hard for reps to operate in.”
The Global Wealth team is
not the first group of Cetera advisers to leave. Voya Financial Advisors Inc. hired 28 advisers with $500 million in assets from Investors Capital Corp., another Cetera firm, back in October.
RCAP has been operating under a cloud ever since another public company controlled by one of its founders,
Nicholas Schorsch, acknowledged in October 2014 that a $23 million accounting error had been left uncorrected over the first half of that year. The firm has been saddled with $800 million in debt and its stock price has fallen to 30 cents a share recently.
Global Wealth works with high-net worth clients and places importance on fast access to alternative products, according to Lou Naser, managing partner and founder of the San Jose-based firm.
“We suggest commercial real estate to a lot of our clients,” he said. “DFPG was a great fit for us because they're a small boutique.”
Despite the loss of Global Wealth, Joseph Kuo, a spokesperson for Cetera, said the network has a nearly 97% retention rate among its financial advisers. “We enjoyed a long and positive relationship with Global Wealth Partners, and we wish them well in their future endeavors,” he said.
