Alex Ortolani
6 min read
You can find original article here Wealthmanagement. Subscribe to our free daily Wealthmanagement newsletter.
Cetera Financial Group CEO Mike Durbin believes the firm’s recently created RIA channel will attract both internal and external advisors, partly due to its multi-model approach.
In a market shifting toward independent registered investment advisor models, Durbin sees Cetera as uniquely positioned to offer options ranging from fee-only, fiduciary-focused advice to hybrid models with commission-based business, to independent 1099s operating on Cetera’s platform.
“We’ve clustered all those into this new channel because that is this confluence of RIAs [models], and/or going to market and doing the direct provision of advice and guidance to the end household as a Cetera advisor,” he said.
The San Diego-based broker/dealer’s channel combines four existing advisor groups created through years of acquisition. It includes The Retirement Planning Group, a fee-only W-2 model; Avantax Planning Partners, a hybrid W-2 model; Cetera Investors, a supported independence model through over 40 branch offices; and Cetera Blueprint, a platform offering for affiliate RIAs.
“We have the resources of a 12,000-advisor organization, but [you] still have [your] posse,” Durbin said. “[They] still do trips together, the sales leadership is the same, the service escalation leaders are the same—we think it’s the right way to go about it.”
Durbin said he expects the “rate of growth” to be the largest across the firm’s five advisor channels, but this is due in part to the “law of small numbers.” The RIA channel, which is a conglomeration of four existing models, has just under $35 billion in AUM among over 600 advisors.
He said that growth will come from two areas. One is Cetera’s ability to see advisors in its network through the full cycle of evolution, from a startup 1099 to a larger firm that needs supported services and offerings, to finally selling the firm.
“We can accommodate all of that inside the four walls of Cetera,” he said. “There’s nothing more hurtful—and thankfully there is less and less of it now—than when we hear we’ve lost a team because they left us to take a different form somewhere else. [They] really can stay here.”
The second area is recruiting external firms, which range from independent, hybrid broker/dealer breakaways to existing small RIAs.
“We’re getting growth internally and externally in this RIA channel,” he said. “The real thesis is that this secular trend toward more RIA-centric offerings is sort of undeniable, so we have to be there.”
