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Cetera Poaches COO From AIG Advisor Group

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Cetera Financial Group has scored a major recruiting coup, poaching rival AIG Advisor Group's chief operating officer, David Ballard, to become Cetera's new executive vice president and COO.

Securing Ballard is part of Cetera's "growth-based strategy," says Larry Roth, the CEO of the IBD, one of the industry's largest with over 9,500 advisors and $32 billion in assets. "We need David's expertise in finalizing our strategy and being able to  execute  against  our plan to help advisors grow organically, take advantage of our size and scale and become a leader in risk management," Roth says.

Ballard, an industry veteran of nearly 30 years, says he left AIG because he wanted to be "part of the rapid growth and investment that [Cetera] is providing advisors." Ballard worked closely with Roth at AIG before Roth left in 2013 to take over at Cetera.

In addition to executing Cetera's growth strategy, Ballard says his major focus will be convincing advisors "why they should stay and continue to grow [with Cetera] at a rapid pace."


A number of Cetera advisors were reported to be unhappy last year when the broker-dealer's parent company, RCS Capital, endured months of negative publicity in the wake of an accounting scandal at American Realty Capital Properties, a firm with which it had shared top executive and founder Nicholas Schorsch.

RCS suffered a blow when, immediately after the accounting issues emerged, a number of IBDs suspended sales of nontraded REITs distributed by RCS and other companies associated with Schorsch.

Ballard says he "kept an eye" on RCS's problems while at AIG but believed the company's broker-dealer business "continued to be strong" and "didn't necessarily see a connection between RCS and its IBDs."

Both Ballard and Roth took pains to put distance between Cetera and RCS' 2014 problems.

Schorsch, who has resigned his position at both American Realty Capital and RCS, was "not involved at all in the operation of the IBDs," Roth maintains. Nor, he adds, did RCS's difficulties "affect Cetera directly." In any case, Roth says, discussions about RCS "have quieted down in the last 90 days."


Roth emphasizes Cetera's plans to invest heavily in organic growth, contrasting that strategy with the IBD's competitors.

Cetera is "investing heavily in technology, training, education and consulting services to help advisors grow their business more rapidly than if [they were] affiliated with a different firm," he says.

Some of Cetera's competitors, Roth asserts, "seem to be spending time reducing costs. We think you're not going to make business better by reducing costs."

Asked to assess the competitive landscape among IBDs, Roth says he thinks that some "larger B-Ds" are owned by companies who won't "view them as strategically important in the future."

Moreover, he speculates that broker-dealers owned by private equity firms or insurance companies "may choose not to stay in the business" in the future.

"If you want to win," Roth says, "you have to invest heavily in technology, advisors and risk management. You have to be good at everything and you have to be more agile."

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