A Newport Beach, California-based team of advisors has left Securian Financial, a broker/dealer that Cetera Financial intends to acquire, to join LPL Financial’s broker/dealer, RIA and custody platforms. Led by consultants Jerry Kanter and Scott Mason, Advanced Benefit Systems has approximately $200 million in assets under management.
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 “self-contained community” within Cetera Advisor Networks. The transaction is expected to close in August.
The team had been with Securian for more than 30 years and evaluated six B/Ds in addition to Cetera before deciding on LPL.
“Securian was like the easy old chair; It was worn and comfortable, so why change?” Mason said. But when Securian made the announcement, “We looked at that and asked the question, ‘Is Cetera the right place for our customers and is it the right place for us?'”
Additionally, at Securian, the company did not have their customers’ data, making the transition to a new company more difficult. And while Mason said he never plans to leave LPL, they like the fact that they now own their data if they ever did.
LPL’s succession planning support is another key selling point, Mason said. The company has a large network of advisors, numbering more than 21,000 across the country, who will be helpful in selecting a successor when they retire.
“I’m not in my 30s or 40s anymore,” Mason said. “We have many younger customers and succession planning is very important to us. Eventually we’re going to black out, or ride into the sunset, or whatever you want to call it, and we’re going to need someone who can serve our customers.”
WealthManagement.com reported in June that Cetera’s acquisition of Securian was proving to be more problematic than the company first thought.
Many, if not most, Securian officials were considered legal employees of the insurance company and had benefits such as health, dental, and vision insurance. According to sources, they will not receive these benefits at Cetera.
Mason confirmed this fact, adding that it dates from the time of the Minnesota Life Insurance Company, now part of Securian, since a very small portion of the agent’s compensation is W2. His team received medical benefits and a 401(k) match.
To compensate for the loss of these benefits, Cetera includes a subsidy when calculating deductible payments — a one-time payment of $40,000 to $50,000, depending on the advisor.
Mason said the loss of those benefits played no part in his firm’s decision to leave the company. “We lose them no matter where we go.”
A Cetera spokesman declined to comment.
Kanter founded Advanced Benefit Systems in 1989 and serves business owners, professionals and affluent families. He specialized in risk management, estate and business planning. Mason joined two years later, bringing his specialization in financial planning and investment advice to high net worth families.
