Cetera Financial Group is going organic.

Best known for its parent company's aggressive appetite for acquisitions -- having gobbled up six independent broker-dealers in less than two years, with yet another deal announced just last week -- Cetera is now unveiling a "new strategic framework" that it says will aid its transition to organic growth.

"Our main objective is organic growth," says Larry Roth, chief executive of Cetera -- the retail division that will hold roughly 9,400 advisors once its parent, RCS Capital, completes an acquisition of VSR Financial Services. "We want to continue a high level of advisor satisfaction and retention, help advisors grow more rapidly and recruit new advisors."

The organization will take advantage of its massive scale by using a newly integrated back office platform, says Roth, while the various IBDs -- the Cetera units, plus First Allied Securities, Investors Capital, J.P. Turner, The Legend Group, Summit Brokerage Services and VSR Financial Services -- will retain their separate brand identities.

NEW NO. 3?

The total revenues of the company's various IBDs added up to $1.6 billion for 2013. Such a total makes RCS the industry's third-largest IBD operation in aggregate, trailing only LPL Financial's $4 billion and Ameriprise Financial's $3.2 billion. (The 2013 number doesn't include VSR, which had another $107.3 million in total revenue last year.)

"The key to our future success will be the need to deliver all the benefits of a scaled organization at the network level combined with a support system that will help advisors grow their practices organically," according to industry veteran Roth, who was named Cetera CEO in the spring, replacing longtime Cetera head Valerie Brown.


The new integrated support platform, which Roth says will be available by the end of the year, will include improved mobile technology, marketing support through an enhanced "Connect2Clients" portal, a practice management platform and an "integrated business consulting process" first used by First Allied Securities to help advisors with issues such as succession planning, hiring, managing and developing talent.

A centralized group of wealth management consultants will be available to work with individual advisors who want to transition or expand their fee-based business, while a team of "advanced planning consultants" can assist advisors with complex planning situations.

In addition, the new network will offer best practices service and support from Summit Brokerage Services and Investors Capital -- known for their highly productive advisors -- to all advisors in the Cetera network. "They have a lot to offer to share what they know across the platform," Roth says.


In an SEC registration filing in the spring, RCS outlined its integration challenges, noting that its success will depend "in large part" on management's ability to integrate the operations, strategies, technologies and personnel of the businesses it acquired.

Commission and fee schedules on RCS' independent retail advice platform may "need to be adjust[ed] to be competitive, the company stated in the filing. Roth, however, says he is "not anticipating any changes there."

Asked about the challenge of working with and coordinating the strong personalities heading RCS's acquired firms, Roth says he hasn't had any issues to date "and doesn't expect any. I've known executives like [Summit CEO] Marshall [Leeds] for more than 20 years. I enjoy working with him and we talk all the time.

"All the [senior] executives are very collegial," Roth adds. "We want to win and we expect to be industry changing and industry leading."

As if Roth needed any reminder of who Cetera is competing with, LPL also unveiled a new technology platform at its annual conference in San Diego on Monday.
Known as ClientWorks, the new platform will give advisors access to a new analytical engine, support mobile and tablet access, provide a new user interface, and integrate prospecting, account opening, trading, cash movement and performance reporting.

A new advisor Resource Center will open in the fall this fall, with the full product release of ClientWorks set for spring 2015. The new platform will eventually replace the current advisor workstation called BranchNet.

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