Independent planning firm RMR Wealth Builders, with $1 billion in AUM in Teaneck, NJ, has left its long-time independent broker-dealer, the Cetera company Financial Network (now renamed Cetera Advisor Networks) for the hybrid RIA B-D, Innovation Equity Partners Financial in Tampa, Fla. In making the move, RMR chose to stick with former Financial Network executive John Simmers, who is a cofounder of the new firm, and to make a break with the private equity-owned Cetera.
"We are not getting what we need from Cetera," says RMR President Stuart R. Miller. Miller says he cannot guarantee dependable service to his clients from a B-D like Cetera, which, due to its private equity ownership, is looking at some point to sell to a larger buyers. Cetera was formed two years ago in a spinoff of ING's advisor division, which was purchased by New York private equity firm, Lightyear Capital.
However, RMR is also seeking multiple benefits of partnership with a hybrid RIA and B-D, Miller adds.
"During our quarter of a century-long affiliation with [Financial Network], our firm experienced the full business lifecycle, from start-up to growth to mature business," Miller says. "As we reached the last stage of the cycle, we, as all mature organizations do, faced a very important decision-grow or die. We chose to grow through innovation, and that meant making a change to join our old friend John Simmers at IEP Financial."
Simmers recently launched IEP Financial along with Keith Gregg, Scott Sherwood, Dwayne Calton, Randy Ciccati and Ramu Singh, who are all are industry veterans.
"It's a true partnership," Gregg, IEP CEO, said in an interview. "We are, for all intents and purposes, a modern day coop. We have shared services and shared resources."
RMR advisors will now have pension and insurance benefits along with many other services through IEP, he said adding that he is delighted that RMR chose to become the startup's first strategic partner.
"This validates our ability to attract best in class financial advisory firms that can highly benefit from our hybrid model and shared service technology platform," Gregg said in a statement. "RMR embodies the best of what our industry has to offer: a select group of passionate, hard working and forward thinking professionals characterized by superior reputation, highest integrity and an unwavering focus on investment performance and client service."
IEP's goal is to become the hybrid B-D and RIA platform of choice for innovative independent Financial Advisors, small- to mid-sized broker/dealers, and RIAs, according to Gregg. The new firm thinks that one of the attractions for a firm like RMR is the company's shared services utility and technology platform, known as iBITS for Innovative Business Intelligence Technology Solutions.
RMR provides investment advisory services exclusively to high-net-worth families, foundations and corporations. The firm, which currently manages $1 billion in client's assets and generates $7 million revenue, has offices in New York, Florida and Arizona.