Robert Moore, LPL Financial's former president and one-time potential successor to its CEO Mark Casady, will become chairman of Cetera Financial Group after its parent company emerges from bankruptcy, according to a source familiar with the Cetera board's selection process, who asked not to be named.
Moore will be keeping his day job as CEO of institutional money management firm Legal & General Investment Management America. Moore did not immediately return calls to his office in Chicago.
“Robert Moore would be a very logical choice for chairman of Cetera’s parent company board," Ruth Papazian, retired chief marketing officer for both LPL and the independent broker dealer H.D. Vest Financial Services, said in a statement. "He’s known and respected [Cetera CEO] Larry Roth for many years, and the two have complementary skill sets…. Adding a recognized industry leader like Robert to the team would provide an added boost of confidence to the entire industry about Cetera’s future prospects.”
BANKRUPTCY EMERGENCE NIGH
RCS Capital, Cetera's parent, is expected to emerge from bankruptcy either later this month or next, according to a source familiar with the bankruptcy proceedings, who added that the last day for objections to be filed to the bankruptcy was May 17 and none of any material nature were filed with the court.
"There are no further impediments to an expeditious emergence from Chapter 11 for Cetera’s parent company and its broker-dealer holding companies," the source said.
While stopping short of confirming Moore's choice as non-executive chairman, David Orlofsky, RCS's chief restructuring officer, said in a statement, "We are putting in place a new board of directors upon the company’s emergence from the restructuring process. Given Cetera’s strong value proposition, we’re confident that the new board will attract highly respected individuals.”
CLOSING VSR, ICC
In a related development, Cetera plans to shut down two of its IBDs, VSR Financial Services and Investors Capital Corporation, leading to the likely loss of an unknown number of its advisers.
“Based on extensive adviser feedback gathered across Cetera, we will be integrating both VSR and ICC within other firms in our network," Cetera spokesman Joe Kuo wrote in an email. "We will be selective with respect to the advisers invited from these firms to affiliate with our network’s other broker-dealers, in order to ensure the best fit possible with our company’s broader mission and values following the completion of our transformation process.”
The consolidation and loss of advisers "shouldn’t come as a surprise," Jeff Nash, president of Nash Consulting Group, a practice management firm that has worked with various Cetera firms over the years, said in a statement provided by Cetera. “These firms never seemed like a very strong fit with the rest of the Cetera network.”
In clarification, Nash told Financial Planning the two firms were smaller, boutique firms with fewer services than the larger Cetera IBDs.
“Advisers impacted by this should approach it as a chance to calmly assess what they really want out of any future broker-dealer relationship, versus giving in to the immediate noise from the usual industry doomsayers who are the first to shout panic,” Nash continued in the statement from Cetera.