Cetera Financial Group is slimming down.
The financial services firm, which owns the independent broker-dealer industry's largest network group, is closing down J.P. Turner, a broker-dealer it bought last year.
Since the sale, a number of Turner advisors have "voiced a strong desire to transition to the Pershing platform," Cetera said in a statement. Shuttering the broker-dealer will allow the advisors "to more rapidly access" Pershing, according to the Cetera statement.
An estimated 150 advisors of Turner's 300 advisors have been invited to move to Summit Brokerage Services, another of Cetera's 11 broker-dealers. The remaining Turner advisors are expected to leave the Cetera fold. Turner is slated to close its doors by the end of October, Cetera said.
CONSOLIDATING?
The company also maintained that that the move "is not part of a broader consolidation strategy."
But not everyone in the industry was convinced.
"If those deals were so great last year, what's different this year?" asked industry consultant Tim Welsh, president of Larkspur, Calif.-based Nexus Strategy.
Shutting down Turner can also be seen as a branding move, says Howard Diamond, managing director of Diamond Consultants, an industry research and consulting firm.
"Summit is the better name," Diamond said. "It's much more attractive to advisors. This was a smart thing for Cetera to do."
NETWORK STRATEGY
The Turner move also puts Cetera's large-scale network strategy back into play.
We believe in the network approach, Cetera CEO Larry Roth told Financial Planning in June. It is a much more efficient driver of recruiting, retention and organic growth. We believe its damaging to, in any way, dilute a broker-dealers culture and the personal relationships that it fosters, because thats what translates into growth.
But advisors who are deciding which firm to affiliate with face a difficult decision, Tom Daley, CEO of the Advisor Center, a recruiting service and online platform for advisors in the IBD market, noted at the time.
I think Larry Roth is a good guy, but there are a lot of unknowns at Cetera that they are working through, Daley told Financial Planning. Advisors may be asking themselves why participate [with Cetera] when a lot more information needs to be clear. There is an element of risk associated with the unknown.
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