The largest acquisition so far this year in wealth management comes with offers of retention payments to 1,000 Securian financial advisors, who are debating whether or not to join their buyer, Cetera.
In an interview with Financial Planning one week after
Antoniades declined to say how much financial assistance Cetera will extend for the incoming practices. He compared the deal to Cetera's 2021 acquisition of
"We can keep them in their own community, just like we did with Voya. We can keep the relationships together that are so important to how they interact with each other," Antoniades said. "We retain that through our transition, and we get to overlay all of our capabilities on top of it. The secret to acquisitions is to do no harm to begin with, and then to bring your capabilities to bear that add value."
The deal between Los Angeles-based Cetera, a network of four brokerages with 8,000 advisors, and St. Paul, Minnesota-based Securian — whose wealth arm spans 31 independent offices with $47.4B in assets under administration — will move Securian's brokerage, registered investment advisory firm, insurance agency and trust company into Cetera's fold. The two wealth management firms
Representatives for Securian said no one was available for an interview about the deal. Upon completion, the firm's financial advisors will switch their branding to Cetera Wealth Management Group and their brokerage to Cetera Advisor Networks.
In a statement last week for the press release announcing the deal, Securion CEO Chris Hilger cited another aspect of the deal that launches a strategic partnership for the giant insurance firm to sell its individual life and annuity products through its former brokerage and across Cetera.
"This transaction allows Securian Financial to increase our strategic focus and accelerate growth in our priority markets, while at the same time continue our commitment to the retail wealth business through our strategic partnership with Cetera," he said. "Cetera delivers on all important aspects of our acquisition partner selection criteria, including community focus, differentiating scale, and industry-leading technology choice and product platforms."
Over the past three years, Securian
Other recent examples include
Securian and other "captive insurance" brokerages often
"At this point in time, its assets and bodies," Henschen said of Cetera. "A lot of the lower fruit has been picked, so to speak, so they're having to settle for something that may not be ideal but it gets their asset levels up there as they prepare to go public, whenever that might be."
Since 2018, Cetera
The dealmaking has ratcheted up the company's debt, but Moody's Investors Service
"The change in Aretec's outlook to positive from stable reflects Moody's expectation that the benefits to profitability from higher interest rates will support de-levering over the next 12 to 18 months," analyst Gabriel Hack wrote in a note. "Moody's expects Aretec's leverage ratio will be around 6.5x at the end of 2022, with the possibility of significant de-levering throughout 2023 if interest rates remain high and there are no significant increases in debt."
Recruiting — another area where the ratings agency noted the firm's strength and presence in the industry — is adding to Cetera's ranks. In 2022, the firm
With Securian's advisors poised to go to Cetera Advisors Network as well, Antoniades said that the incoming group's business will "fit very nicely into our large enterprise channel." He also praised Securian's training of new entrants to the industry, noting that about 80% of its advisors are "homegrown" by the firm.
"We've already got competency in dealing with insurance firms," Antoniades said, citing the Voya deal and Cetera's former parent, Dutch insurer ING. "It's a business that we understand and that we do a good job in, frankly. So if I can curate a really good experience here and put something really differentiated on the table, there's no reason why we can't do more of these."
