Cetera’s move last week to merge two of its existing RIA practices, Avantax Planning Partners and The Retirement Planning Group, was the wealth management industry’s latest example of broker-dealer platforms evolving as competitors in the RIA M&A market.
Avantax and The Retirement Planning Group (TPRG) were both acquired by Cetera in 2023, then merged last week to form Cetera Planning Partners, a national RIA with nearly $19 billion assets under administration and over 100 advisors who will operate as W-2 employees.
“Cetera Planning Partners is designed as an employee-advisor model,” Jennifer Hanau, president of Cetera RIA and branches channel, told InvestmentNews. “As part of our succession strategy, there are a small number of independent contractors who are in the process of introducing clients to new wealth advisors. Once those transitions are complete, all advisors within Cetera Planning Partners will be employees.”
Cetera has completed around 70 transactions to grow its RIA model since 2020, including this year’s acquisitions of Darnall Sikes Wealth Partners, Plains Wealth Management, and Matkovic Financial Group. All advisors affiliated with Cetera Planning Partners will have Schwab, Pershing and Fidelity as their initial custodian options. Hanau says Cetera Planning Partners is part of a “clear shift” among advisors looking for models that offer “support, infrastructure, and long-term stability” to help them focus on serving clients rather than running their firm.
“Cetera Planning Partners reflects how we’re responding to that shift – by investing in an employee advisor RIA designed to deliver deep planning capabilities, integrated technology, operational strength, and flexibility,” said Hanau. “We’re committed to growing Cetera Planning Partners both organically and through acquisitions, and it plays a central role in how we’ll continue to expand Cetera’s footprint.”
Other broker-dealers bolstering their RIA business include LPL Financial, which has spent nearly $900 million across 77 acquisitions of independent advisors, according to RIA consultant and M&A advisor David DeVoe. LPL’s recent deal activity includes its acquisition of Mariner Advisor Network earlier this month, and it made a minority investment last fall in the $40 billion RIA and OSJ Private Advisor Group.
“IBDs [independent broker-dealers] are sitting on massive affiliated RIA assets. It makes perfect sense to consolidate them and capture the same growth national RIAs are enjoying. Cetera isn't alone here; this is becoming a playbook across the industry,” DeVoe told InvestmentNews. “The RIA business has the potential help bolster an IBD's low profit margins and drive incremental growth.”
Osaic is another broker dealer that has expanded its RIA footprint as evidenced by last summer’s acquisition of CW Advisors, while Raymond James has moved to deepen its presence by offering advisor equity financing and minority investments to independent RIAs. The M&A market for RIAs is still dominated by top consolidator firms who have accounted for 63% of all deals year-to-date, according to DeVoe & Co.
“IBDs have won select deals, but there's real hesitancy among fee-only advisors to join firms tied to transaction-based business models or products,” DeVoe said. “Many of these advisors walked away from their Series 7 licenses years ago, and that stigma hasn't fully faded.”
Advisors at The Retirement Planning Group will begin using the Cetera Planning Partners brand on July 15. Cetera said it expects Avantax Planning Partners to shift to the Cetera Planning Partners brand later this year.
Louis Diamond of advisor recruiting firm Diamond Consultants says that Cetera-owned employee-advisor practices will support a rising valuation for Cetera, which is majority owned by private equity firm Genstar Capital. Genstar first invested in Cetera in 2018, and made a reinvestment in 2023.
“From a valuation standpoint, those businesses that are fully owned employee advisors, are much more valuable. So if you put that into the broader Cetera ecosystem, it does bolster the overall value of Cetera,” said Diamond.
The entire Cetera network spans over 12,000 advisors with $640 billion in assets under administration and $294 billion in assets under management. Diamond said Cetera Planning Partners could mirror the strategy from RIA aggregator Focus Financial and its moves to consolidate firms under its Focus Partners Wealth brand.
“They're potentially creating optionality for having something very valuable to sell, even outside of Cetera, if it's very successful,” said Diamond. “It keeps the option alive, either when Cetera has a recap, or goes public. You have a more valuable segment of the business. You could spin it off, or you can sell it.”
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