Cetera Financial Group has completed its acquisition of Securian Financial Group’s retail wealth and trust businesses, making the San Diego-based firm one of the largest networks of independent broker-dealers in the U.S.
“In the broader space, we’re probably number 3 or 4 in size now. This deal actually moves us up a little bit, makes us a little bigger fish in the pond, which is always a good thing,” said Cetera Chief Operating Officer Tom Gooley.
The deal was first announced in January to acquire certain assets related to Securian Financial Services, Inc., including Securian’s broker-dealer investment advisor agency and the equity of the Securian Trust Company – representing more than 1,000 financial professionals across 30 independent firms.
At the close of the deal, announced Aug. 10, Cetera had retained more than 91% of Securian’s invited professionals, representing almost $50 billion in client assets.
“This is the largest acquisition we have done to date,” Gooley said, adding that a retention rate of over 90% is “excellent,” because once these kinds of deals are announced competitors are quick to try and sign on broker-dealers from the acquired company’s network.
The financial professionals from Securian join the Cetera Advisor Networks as a distinct community, branded as Cetera Wealth Management Group.
“We have a large number of advisors – approximately 9,000 – on the platform,” Gooley said. “What we like to do is break them down into smaller parts and make them a family, make them a community so they get to know each other.”
Tom Taylor, chief sales and growth officer at Cetera, noted the similar cultures of Securian and Cetera and how the new “top-caliber professionals and their leadership team feel like family.”
“We share the same ethos of client-centricity and innovation and can’t wait to get to work serving clients together, with even more products, solutions and support than before,” he said.
The model of creating distinct groups is the firm’s “secret sauce,” Gooley said, adding that the model was also used in Cetera’s “exceedingly successful” 2021 acquisition of the independent financial planning channel of Voya Financial Advisors in 2021 that retained 93% of the business, now named Cetera Wealth Partners.
New Trust Business
The acquisitions of both Voya and Securian Financial represent a trend in Cetera’s strategy of carving out the broker-dealer businesses from insurance companies.
“Insurance companies are finding they cannot invest in a broker-dealer enough to make it competitive in the marketplace,” Gooley said. “This is our business; this is what we do day in and day out, so we invest continuously in our platform and the things that we need to do to be a full-fledged, full-service broker dealer creating a wealth hub for our advisors.”
In addition to the familiarity of onboarding broker-dealers from insurance firms like Securian, Gooley said Cetera was also attracted to the longevity of Securian’s advisors.
“That’s a very attractive market for us because they’re sticky – advisors that want to hang out and stay with one firm,” he said.
Kjirsten Zellmer, president of Cetera Wealth Management Group, described Cetera’s onboarding and integration process as “strategic” and that it minimized business disruption.
“I am excited and eager to begin our bright future at Cetera, and to offer its exponential growth, scale and optionality to our valued financial professionals, managing partners and team members,” she said.
In addition to the added value of Securian’s broker-dealer, the acquisition has also given Cetera a new business – Cetera Trust Company, N.A.
“We’re pretty excited to add it,” Gooley said. “We’ve had a request from our advisors for a long time to open a trust. It wasn’t the reason we did the deal, but it certainly was the icing on the cake.”
The trust business will leverage Cetera’s technology but will be a stand-alone entity with its own board and employees and sit within Cetera’s holding company, Gooley said.
“We’re bringing it over as-is with the expectation that it will be a growth market for us,” he added.
In addition to gaining a new trust business and broker-dealer, Cetera is also gaining a “strategic partner” in Securian, Gooley said. “The advisors that came over will continue their relationship with Securian by using their products and we are going to build much stronger connectivity between us.”
Cetera Financial Group
CEO: Adam Antoniades
Headquarters: San Diego
Business: Wealth hub serving financial advisors, tax professionals, licensed administrators, large enterprises, as well as institutions, such as banks and credit unions
Financials: $330 billion AUA and $116 billion AUM, as of March 31, 2023
Employees: Approximately 2,000
Network Members: Approximately 9,000
Notable: In a recent advisor satisfaction survey of more than 23,000 reviews, Cetera’s Voice of Customer program ranked 4.7 out of 5 stars.