Cetera to buy Voya's wealth manager as M&A reshapes IBD sector

Cetera Financial Group is buying Voya Financial Advisors, in a deal that will accelerate the consolidation in the independent broker-dealer sector.

Some 900 financial advisors from Voya's wealth manager are folding into the IBD network’s largest firm, Cetera Advisor Networks, the companies said Feb. 8. Los Angeles-based Cetera, backed by private equity firm Genstar Capital, is buying certain assets related to Voya’s “independent financial planning channel,” according to the firms. It's one of three parts of a business that generated $477.2 million in revenue in 2019.

The companies didn’t release the terms of the deal or the expected date of close. Cetera is the No. 5 firm on Financial Planning’s IBD Elite rankings with $1.92 billion in annual revenue, and it has been bulking up its recruiting offers as it aims to reverse a small net loss of advisors to its headcount of 7,543 in the third quarter. Cetera is a network of five IBDs of varying sizes.

“We have always respected VFA's commitment to their business owners, independent operating model and strong community of financial professionals,” Cetera CEO Adam Antoniades said in a statement. “We share an unwavering purpose in providing more American investors with sound independent financial guidance.”

The website WealthManagement.com first reported that the firms were nearing a deal a couple of days earlier. Current VFA President Tom Halloran, as well as key executives and service teams of the Des Moines, Iowa-based wealth manager, will remain in their roles under the deal.

“We are energized by Cetera's industry-respected mission to help independent financial professionals provide financial wellness to clients at each life stage,” Halloran said in a statement. “Cetera's commitment to the independent model is the right fit for our business owners, giving them increased flexibility and scale.”

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Voya was the No. 18 firm in annual revenue among IBDs in 2019. Prior to the financial crisis, the firms shared the same parent, Dutch insurer ING. Now spun off as a publicly traded insurer in its own right, Voya’s parent will disclose its fourth-quarter earnings later this week. In the announcement of its deal with Cetera, the firms said Voya serves approximately 385,000 retail customers with nearly $40 billion in assets.

Midsize firms ranging from a few hundred advisors to a couple thousand have proven attractive as acquisition targets to industry giants in recent years. The No. 1 independent broker-dealer, LPL Financial, will complete its $300-million acquisition of Waddell & Reed, the No. 15 firm, by the middle of the year. The No. 3 firm, private equity-backed Advisor Group, bought the five Ladenburg Thalmann firms last February for $1.3 billion.