Cetera Financial Group quietly dropped the head of its wealth management division two months ago, the sixth Cetera leading executive to lose a job in 10 months.
Steve Dunlap left his executive role with the Bank of New York Mellon to join Cetera two years ago with much fanfare, but he tells Financial Planning he was cut thanks to reorganization in the wake of RCS Capital's acquisition of Cetera last year.
The move comes as RCS continues to struggle following an accounting scandal last year in another company formerly run by its founder Nicholas Schorsch, and a stock price that has dropped from nearly $40 in April of last year to $1.69 this week. RCS reported a loss of $66 million, or $1.11 per share, and a 23% decline in revenue to $678 million for the quarter ending June 30.
"Cetera explained at the time that this action was taken that it was simply reorganization and an elimination of wealth management at the firm," says Dunlap, who moved his family to Los Angeles for the job.
"My view is, 'I don't understand that move.' But beyond that, I don't feel I should comment on the specific situation."
Cetera declined to discuss the details of Dunlap's exit. "We respect the contributions Steve Dunlap made to the firm and we wished him well when he departed from the team many months ago," says Cetera spokesman Joseph Kuo.
SIXTH EXECUTIVE DEMOTION
Dunlap is the sixth RCS leader to lose a post in the last ten months. Earlier this month Cetera CEO Larry Roth left his seat on the RCS board, just six months after joining it, along with another director Peter Budko. RCS says it will replace its CEO Michael Weil and its Chief Financial Officer Brian Jones, both of whom continue to serve in their positions.
Nicholas Schorsch, RCS's founder, resigned his position as chairman of the board in December following the revelation of troubles. In an earlier high profile departure, shortly after RCS bought Cetera last year, Schorsch reversed his pledge to retain top talent when then Cetera-CEO Valerie Brown abruptly left the company.
"The broader RCS Capital has had a lot of craziness the last twelve or so months, so [it's] likely not [all] of this could have been predicted," says Chip Roame, founder of Tiburon Strategic Partners says of Dunlap's troubles. It's a "tough personal spot for Steve having moved his family west."
However, Dunlap's departure does not represent a rollback in the IBD's commitment to its wealth management operations, according to one Cetera insider who requested anonymity because he was not authorized to discuss a personnel matter.
"They reallocated what [Dunlap] was responsible for to other people," the source said. "First Allied had a good team. I don't feel like there was in any way a loss."
First Allied is among the group of IBDs Schorsch snapped up in a rapid acquisition tear as he built RCS into second largest IBD in the country after LPL Financial in numbers of advisors.
Cetera spokesman Kuo said the responsibilities were inherited by Brett Harrison, in his newly created role as Executive Vice President of Advisor Growth.
"Cetera continues to invest in significant new tools, resources and platforms to enhance the ability of advisors to provide sophisticated financial planning services to their clients," Kuo says. "This is a function of our network that is dedicated to aligning multiple tools, resources and platforms expressly to help advisors grow their practices in multiple ways."
Dunlap, who has begun to work as an independent consultant in the field, says he is looking for a new position, preferably in the financial technology sector.
"While I'm figuring out what the next chapter in my career will be, I'm keeping myself busy," Dunlap says.
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