Cathay Bank's $507 million retail brokerage business returning to Cetera

Cetera Financial Group on Thursday said that Cathay Bank will move its retail and wealth management brokerage business from LPL Financial to Cetera Financial Institutions, a broker-dealer that specializes in working with advisers in banks and credit unions. Cathay Bank, with $507 million in brokerage assets and $14.5 billion in bank assets, was previously affiliated with Cetera Financial Institutions but left during the bankruptcy of Cetera Financial Group's former owner, the defunct brokerage RCS Capital Corp., or RCAP, which was formerly owned by Nicholas Schorsch. Crushed by debt, RCAP filed for a pre-arranged Chapter 11 filing in January 2016 as part of an agreement reached with a majority of its first and second lien holders. RCAP emerged from bankruptcy a few months later with Cetera Financial Group as its only operating company. Cathay Bank, which opened in southern California in 1962 and is focused on Chinese-American clients, has 15 advisers. A spokesman for LPL, Jeff Mochal, did not return a call to comment on Cathay Bank's move away from LPL. The president of Cetera Financial Institutions, LeAnn Rummel, said the move was an indication that other banks may soon return to Cetera. "We believe Cathay Bank will be the first of a number of institutions that, after a brief period of working with other platforms, develop an even greater appreciation for Cetera Financial Institutions' value proposition and decide to return to the fold," Ms. Rummel said in a statement. "Our work with Cathay Bank will include a specific focus on several of its priorities for its wealth management program, including increased recruiting of financial advisers, growing its life insurance business and training and education to help advisers thrive under evolving fiduciary rules."