Lincoln Investment is increasing its stable of advisers by more than 40% in acquiring the Legend Group from Cetera Financial Group.

Lincoln expects to have more than 1,100 advisers after adding Legend's 350. Terms of the transaction between the three independent broker dealers, expected to close early next year, were not disclosed.

Ed Forst, Lincoln Investments CEO
Ed Forst, Lincoln Investments CEO

Legend's advisers focus on providing advice to teachers, professors and nonprofit employees who qualify for 403(b) tax-deferred savings plans.

"It takes a certain size to compete in the independent broker-dealer space," Lincoln's CEO Ed Forst says. The resulting firm will be "big enough to compete and yet still small enough so that our advisers' voices are heard."


Forst says he first tried — and failed — to get his father and firm founder Nick Forst to consider joining forces with his counterpart Philip Restino at Legend about 20 years ago. The lunch he set up didn't go as well as he'd hoped.

"They were both so independent-minded" that nothing came of it, Forst says.

He expressed satisfaction that a deal finally materialized.

"Oh my God," he says, "It's been a long time coming."

Cetera, newly emerged from its pre-planned bankruptcy earlier this year, had announced its plans to offload a number of its smaller firms, also earlier this year. It has since shuttered VSR Financial Services and Investors Capital.

The deal also will help Lincoln better compete in the high-net-worth space, Forst said in a statement.

The private equity firm Lovell Minnick Partners invested in Lincoln in June 2015, to help facilitate its growth.

Legend advisers will continue to market themselves under the Legend brand and the firm's headquarters in Palm Beach Gardens, Florida, will remain open, the statement says.


Lincoln's 403(b) business continues to grow rapidly, despite its growth into different markets, Forst says.

A decade ago, these plans made up 80% of Legend's business, versus 30% today, he says.

"But we've never done as much 403(b) business as now," he said. "We do maybe $250 million in recurring contributions. Ten years ago it was maybe half of that."

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Cetera CEO Robert Moore said the deal demonstrates that Cetera has made good on its pledge to thoughtfully divest itself of an unwanted asset.

"Our exploration of a potential sale of the Legend Group was guided by our plan to exit businesses that were not core to our future growth plans, combined with our commitment to identify a transaction opportunity with a company that understands and supports the Legend Group's unique strengths in the 403(b) plan space," Moore said in the statement.