A Newport Beach, Calif.–based team of advisors have left Securian Financial, a broker/dealer Cetera Financial plans to acquire, to join LPL Financial’s broker/dealer, RIA and custodial platforms. Advanced Benefit Systems, led by advisors Jerry Kanter and Scott Mason, manages about $200 million in total assets.
Kanter and Mason said the move was prompted by Cetera’s acquisition of Securian. Cetera announced plans earlier this year to acquire Securian’s retail wealth business and make it a “distinct community” within Cetera Advisor Networks. The transaction is expected to close in August.
The team was with Securian for more than 30 years, and evaluated six b/ds, in addition to Cetera, before deciding on LPL.
“Securian was kind of the comfortable old armchair; it was worn out and it was comfortable, so why change it?” Mason said. But when Securian made the announcement, “We looked at that and posed the question, ‘Is Cetera the right place for our clients, and is it the right place for us?’”
In addition, at Securian, the firm didn’t own its client data, making a transition to a new company more difficult. And while Mason said he doesn’t ever plan to leave LPL, they like the fact they now own their data if they ever did so.
LPL’s succession planning support was another big selling point, Mason said. The firm has a large network of advisors, with more than 21,000 across the country, which will be helpful in choosing a successor when they retire down the road.
“I’m not in my 30s or 40s anymore,” Mason said. “We’ve got a lot of younger clients, and succession planning is very important to us. At some point we’re going to fade to black or ride off into the sunset, or whatever you want to call it, and we’re going to need to have someone who can service our clients.”
WealthManagement.com reported in June that Cetera’s acquisition of Securian was turning out to be more problematic than the firm had first thought.
Many, if not the majority, of Securian reps were considered statutory employees of the insurance company, and had employee benefits such as health, dental and vision insurance. They won’t be getting those benefits at Cetera, sources said.
Mason confirmed that fact, adding it dated back to the days of Minnesota Life Insurance Company, now part of Securian, due to a very small portion of the reps’ compensation being W2. His team was receiving medical benefits and a 401(k) match.
To make up for the loss of those benefits, Cetera is including an allowance in its calculation of retention payments—a one-time payment of $40,000 to $50,000, depending on the advisor.
Mason said the loss of those benefits did not play into his firm’s decision to leave. “We’re losing them no matter where we go.”
A spokesman for Cetera declined to comment.
Kanter founded Advanced Benefit Systems in 1989, serving business owners, professionals and affluent families. He specialized in risk management and estate and business planning. Mason joined two years later, bringing his specialization in financial planning and investment advisory for high-net-worth families.