A group of 40 brokers has left Cetera Financial Group, the first significant departure since Cetera's parent company, RCS Capital Corp., filed for bankruptcy last month.
PlanMember Securities Corp., a broker-dealer that focuses on retirement plans for school teachers and employees at other nonprofit institutions, said Wednesday it had recruited the 40 advisers with annual production of $4.4 million in gross dealer concession from Legend Equities Corp.
Legend is part of First Allied Holdings, one of Cetera's 10 broker-dealers.
The group is led by Rich Williams of Williams & Co., a Michigan-based firm that focuses on 403(b) and 457(b) retirement plans. Mr. Williams and his team resigned from Legend at the end of last week.
PlanMember is a mid-sized broker-dealer with about 500 advisers and $67.2 million in total revenues in 2014, according to the most recent information the company reported to
InvestmentNews.
Cetera Financial Group, the umbrella organization housing 9,100 registered reps and advisers, has seen remarkable loyalty as it goes through its pre-arranged bankruptcy,
which it officially entered at the end of January. The process is expected to take several months; advisers' allegiance is being tested almost daily as recruiters from other firms hound them to depart.
Questions facing Cetera were part of the reason for the Williams & Co. team leaving Legend, said Richard Ford, the chief marketing officer for PlanMember.
The Williams & Co. group “felt like they were a little bit of a misfit at the broker-dealer conglomerate and wanted to control their destiny a little more,” Mr. Ford said. “Williams is the No. 2 agency in the Legend group. We started talking to them in October.”
A Cetera spokesman, Joseph Kuo, downplayed the significance of Williams & Co. leaving, noting that the firm expects adviser attrition at the start of the year, and adviser recruiting and retention were in line with previous years.
“While we're not surprised that specific adviser departures would generate higher visibility than usual given recent-past parent company issues that are now behind us, we find most of our advisers are focused on supporting their clients through this period of market turmoil,” he said in an email, adding that Cetera advisers are focused on coming regulatory changes rather than business moves or transitions.
Mr. Ford countered that notion. When asked if he expected to recruit more advisers from Legend, he said: “It would be our hope we could.”
He declined to give specific details of any recruiting packages or transition compensation for the Williams & Co. advisers.
