Kestra Financial Inc. said Thursday that during the third quarter, 21 new financial advisers and 13 teams with over $2.3 billion in assets under management joined the firm, while Cetera Financial Group Inc. earlier this month announced that it recruited advisers with $2.4 billion in assets.
Kestra's and Cetera's recruiting gains come at a time when registered investment advisers have seen the biggest net gains of financial advisers this year, adding 1,272 advisers over the first nine months of 2021, according to InvestmentNews research. Independent broker-dealers have seen the second largest number of net gains of advisers, with 1,056 advisers moving to independent broker-dealers over the first three quarters of the year.
That means both Kestra and Cetera are well positioned to gain financial advisers; both operate as so-called hybrid firms, meaning financial advisers can work as either investment advisers or registered reps at either firm.
Total moves of experienced advisers were up 10% year over year through the first three quarters of 2021, according to InvestmentNews data. But the roughly 12,600 moves tracked through September remain 10% below their pre-pandemic level.
Cetera Financial Group, which comprises five broker-dealers that house more than 8,000 reps and advisers, is on its way to recruiting advisers with $10 billion in assets, said John Pierce, head of business development at Cetera. He added that those assets represent a gross total of recruited assets, not a net.
"This is the most competitive recruiting environment since I’ve joined the industry in 1993," Pierce said.
"We're definitely seeing firms that are trying to pad their numbers with fourth-quarter starts," he said, meaning that large firms are adding to recruiting bonuses to incentivize advisers to move before the end of December. That's when the Financial Industry Regulatory Authority Inc. slows down and makes most adviser and broker moves impossible.
"We’ve made a major pivot to quality and are making an effort to bring in advisory assets," Pierce said.
The average recruit at Cetera this year has more than $750,000 in annual revenue production compared to $323,000 a year ago, said Pierce, who started at Cetera in July 2020. Previously he had been head of recruiting at Stifel Financial Corp.
"It's a few things," he said. "We’ve been focused on how to help professionals grow. We have no interest in annuity and insurance books of business, and we do custom underwriting for each adviser recruit."
With growth topping succession as the leading M&A driver, referral programs are a top of mind consideration for advisory firms making moves as Goldman Sachs, Pershing and Robinhood consider entering the referral market.
The $8 billion RIA is getting more fuel for geographic expansion and recruit top talent through a minority investment partnership.
The rush of SEC applications, which also includes JPMorgan and Schwab, reflect growing optimism over the tax-busting fund structure.
The half-dozen teams who joined the hybrid RIA in the early innings of 2025 have lifted it past a key asset milestone.
Meanwhile, GPB senior executives' sentencing for fraud pushed to May.
RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.
As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.
