$1.6B enterprise picks LPL over Cetera after Voya deal

Cetera Financial Group lost a major enterprise out of an incoming group from a firm it acquired earlier this month, despite retaining more than 800 financial advisors after the deal.

Brian M. Woods Financial Services, an office of supervisory jurisdiction spanning 30 advisors with $1.6 billion in advisory, brokerage and retirement plan assets, left Voya Financial Advisors for LPL Financial before Cetera acquired certain assets related to Voya’s independent planning business earlier this month, LPL said on June 24.

Woods is the third incoming group with at least $1 billion in client assets to be unveiled by LPL in the last two weeks. LPL has attracted six out of the 14 billion-dollar enterprises changing firms in the independent channel so far in 2021, according to Financial Planning’s tracking of recruiting announcements. The record level of M&A deals in wealth management also pose recruiting challenges for acquiring firms seeking to retain advisors who aren’t usually privy to deal talks and find themselves moving to a new broker-dealer in their wake.

In completing the deal, Cetera kept the vast majority of advisors and accounts with 90% of the registered representatives and 93% of the assets under administration from Voya. In the case of the Boston-area enterprise, though, LPL’s team answered their questions more quickly and comprehensively than Cetera during its due diligence search after the announcement of the acquisition in February, Woods says.

“If myself and my team were going to make a move, I wanted to make sure we went to the right place,” says Woods. “I had looked at LPL years before and was very impressed … That was six years ago. They were top of my list to revisit when I heard we were purchased.”

Representatives for Voya and Cetera declined to comment on the team’s moves or on Woods’ comments. The move was first reported by Barron’s.

Bank channel

$36B wealth manager eyes credit union expansion with LPL

June 22, 2021 9:29 AM

The Danvers, Massachusetts-based team formally moved to LPL on April 30, according to FINRA BrokerCheck. Woods’ wife Bonnie Woods, a registered sales assistant, has worked alongside him in the business since 1995, and the enterprise includes Worcester-based North Pointe Wealth Management and other offices across Massachusetts and New Hampshire. The enterprise had been with Voya since 2015, a year after the onetime parent of Cetera, RCS Capital, acquired its prior BD, Investors Capital.

“Investors Capital was all rolled up into Cetera, so basically they probably didn't want to go back to the firm that they already left,” says recruiter Mark Elzweig. “People usually just stay [after an acquisition] and see what it's all about and decide two years later whether it makes sense for them to continue to be there.”

Engaging with potential incoming advisors’ questions and concerns after announcing an acquisition is “a huge deal” for wealth managers seeking to retain them through the close, according to recruiter Jodie Papike of Cross-Search. Papike compares the period — typically only a few months long — to the dating phase before marriage.

“It's certainly not a given when there's an acquisition that everyone is going to stay,” Papike says. “Anytime there is an acquisition, there is uncertainty that comes into the lives and the practices of advisors.”

LPL learned that lesson four years ago when rivals added more than 1,300 reps from the 3,200-strong network of four IBDs whose assets it acquired from an insurer. The No. 1 IBD passed its more recent test with flying colors: In April, LPL closed its $300-million acquisition of Waddell & Reed’s wealth manager while retaining advisors managing 95% of its client assets.

The firm’s recruiting has only gained momentum since then, with LPL announcing two other incoming teams with a combined $2.5 billion in client assets in June, as well as a credit union wealth manager set to bring $36 billion to the firm’s BD, RIA and custodian next year.

“We are committed to making ongoing investments in integrated technology, wealth management resources and robust business solutions that can help the firm and each individual advisor in their network be successful,” Ken Hullings, LPL’s head of enterprise recruiting, said in a statement. “We look forward to supporting the entire Woods team for years to come.”

Woods’ headcount of advisors grew by a net 909 year-over-year in the first quarter to reach a record 17,672. Now that Woods is affiliated with LPL, he says he plans to tap into its succession and recruiting resources with an eye toward expanding throughout the Northeast.

“I don't want to move again,” Woods says. “Now we can just concentrate on building our business and relationships.”