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Former Cetera executive to lead combined Blucora IBD after acquisition

The new giant of the tax-based niche just made another power move.

Blucora established its wealth management unit as the dominant tax-savvy independent broker-dealer following its acquisition of rival 1st Global. Now it has hired the former CEO of its only remaining direct competitor.

The parent firm appointed Enrique Vasquez on June 3 to be president of wealth management atop HD Vest and 1st Global. Blucora acquired 1st Global for $180 million last month, and the combined wealth management unit will move into a new headquarters next year.

HD Vest - 1st Global

Vasquez spent 11 years with Cetera Financial Specialists. He managed its transition into Cetera Financial Network in 2012 after the IBD network acquired the firm, then known as Genworth Financial Investment Services. The Cetera firm remains the only other tax-focused IBD, though other firms in the sector do often pitch offerings aimed at advisors who are also CPAs or enrolled agents.

Blucora’s June 4 presentation at Baird’s investors conference referred to Vasquez’s former firm as “Competitor A.” CEO John Clendening identified the Cetera IBD in his remarks, adding that other IBDs and wealth management firms compete against the company as well.

Clendening praised Vasquez’s prior experience with GE Capital and his role in “essentially formulating the Cetera Financial Specialists business.” He also described an upcoming tax-strategy investing software rollout Blucora designed to enhance advisors’ workflows.

The “classic consolidating acquisition” of 1st Global will make the unit a “stronger overall competitor on top of the scale and financial benefits,” Clendening said. “If you’re an advisor that’s interested in doing tax-smart investing, we’re essentially the game in town, we’re the company you want to come to.”

HD Vest and 1st Global are using separate offices in the Dallas-Fort Worth Metroplex until their new HQ is ready in 2020, spokeswoman Dana Taormina says. Blucora leased 150,000 square feet as the first tenant at a new building in Coppell, Texas, according to local news reports.

Vasquez is replacing HD Vest’s interim CEO Todd Mackay, who Blucora named its chief business operations and development officer. Mackay has served in the role since November, when current HighTower Advisors CEO Bob Oros stepped down from the post at HD Vest.

“Enrique is a recognized wealth management leader who brings an impressive record of achievement,” Clendening said in a statement, adding that Vasquez “will play a vital role” in the firm’s growth and delivery of the best products, services and solutions to advisors and clients.

Representatives for Cetera declined to comment on Blucora’s appointment of Vasquez, noting a company policy against commenting on past or current employees beyond wishing them well. His former firm produced $157.7 million in revenue in 2018, as the No. 30 IBD in the sector.

In addition to his tenure with the Cetera firm and the GE affiliate, Vasquez spent time with the French investment bank Societe Generale. His most recent position was at CareBuilders at Home of Illinois, a senior home nursing company.

With the acquisition closing last month, Blucora’s wealth management unit expanded to 4,400 advisors who generated a combined $547 million in revenue in 2018. Folding in 1st Global will boost the unit’s run-rate EBITDA by nearly $24 million by the end of the year, the firm says.

Blucora is also launching the previously announced automated tax-smart investing tool for HD Vest advisors in a few days and shortly afterwards for 1st Global’s representatives, Clendening says.

The software cuts down 40 to 50 hours of “manual labor on Excel” to one hour speaking to clients, he said. The software performs audits of each client account based on tax planning strategies, including asset location, Social Security, loss harvesting and others.

The tool will minimize advisors’ lengthy work in finding tax alpha to simply explaining the value delivered to clients, Clendening says.

“We’re the only company that’s on the path to build this,” he said. “It’s a game changer.”

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