$2B Cetera Advisors OSJ plans big-league growth spurt
A major Cetera Advisors office of supervisory jurisdiction has set a goal of adding 55 advisors and up to $3 billion in client assets over the next four years using a different take on the hybrid approach.
Horizon Financial Group, which is the second-largest super OSJ within the No. 21 independent broker-dealer, hopes to more than double its affiliated advisors and client assets by 2021, says CEO Pete Bush. The Baton Rouge, Louisiana-based OSJ currently has 45 advisors managing about $2 billion.
Bush played baseball at Louisiana State University with future Minnesota Twins and Baltimore Orioles player Jeff Reboulet, who is now an affiliated advisor heading up the OSJ's division focusing on pro athletes. In anticipation of its growth, Horizon completed a rebranding last year and recently hired three new support staff members.
IBD rivals to Cetera Advisors and its parent, Cetera Financial Group, have been pitching their hybrid RIA channels successfully to prospective advisors. For example, LPL Financial’s largest hybrid RIA, Private Advisor Group, has boosted its assets under management by 2,200% to $14.3 billion since 2011.
Horizon places its advisory assets entirely with Cetera’s corporate RIA. However, Bush has started offering advisors the choice of being direct employees of Horizon or independent contractors of Cetera. The expansion plans also include acquisitions of smaller practices in need of succession plans, Bush says.
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“A lot of what’s driving that is the sustainability of our practice but also the practices of the advisors that affiliate with us,” says Bush, adding that the firm wants “to offer partnership opportunities and/or succession opportunities with advisors who haven’t really thought through that exit strategy.”
Bush’s practice joined the Denver-based Cetera Advisors back in 2004, but his OSJ only had six affiliated advisors in 2011. Individual wealth management services, retirement-plan business and the OSJ make up Horizon’s three main sources of business.
The firm has finished a couple of small M&A deals, with two more in the works and multiple financing partners including local commercial banks, Bush says. Horizon expects to spend up to $3 million on M&A deals in the next four years for practices of $200,000 or $300,000 in annual revenue, Bush says.
The W-2 or 1099 classifications will give advisors the choice of a salary model versus a production model, he says. Bush also plans to add more compliance and operations employees to the firm’s 11-member support staff, along with marketing personnel, to help carry out its growth plans.
The practice changed its name from Horizon Wealth Management last year as part of the rebranding. The firm also launched new websites and podcasts for advisors and clients.
Reboulet, an infielder, spent parts of 12 seasons with five teams in the major leagues before joining Cetera in 2004. Reboulet and Bush later wrote a book on planning for athletes. Bush, a first baseman who played in three College World Series, doesn’t regret missing out on the big leagues, he says.
“You can only be in the majors for a short period of time,” Bush says, “but you can be an OSJ for a long time.”