Newport Beach, Calif.-based Advisor Team Leaves Securian Financial, Broker/Dealer Cetera Financial with Plans to Acquire, to Join LPL Financial Broker/Dealer, RIA and Custodian Platform became. Led by advisors Jerry Cantor and Scott Mason, Advanced Benefit Systems manages approximately $200 million in total assets.
Kanter and Mason said the move was prompted by Cetera’s acquisition of Securian. Earlier this year, Cetera announced plans to acquire Securian’s retail wealth business and make it a “unique community” within Cetera Advisor Networks. The transaction is expected to close in August.
The team has worked with Securian for over 30 years and evaluated six b/ds in addition to Cetera before deciding on the LPL.
“The Securian was like a comfortable old armchair. It was worn out and comfortable, so why change it?” Mason said. But when Securian made the announcement, “we looked at it and asked the question, ‘Is Cetera the right place for our clients, and is it the right place for us?’ .”
Additionally, Securian did not own its own customer data, making the transition to the new company more difficult. Mason said he never intended to leave the LPL, but he liked the fact that if he did, he would still be able to own the data.
LPL’s succession planning support is also a big selling point, Mason said. The company has a large network of over 21,000 advisors across the country who will help him find a successor for his future retirement.
“I’m not in my 30s or 40s anymore,” Mason said. “We have a lot of young customers and succession planning is very important to us. No matter what, you’re going to need someone who can serve your customers.”
Wealth Management.com reported in June that Cetera’s acquisition of Securian turned out to be more problematic than the company originally thought.
Many, if not the majority, of Securian’s representatives were considered legal employees of insurance companies and had employee benefits such as health, dental, and vision insurance. They don’t get those benefits on Cetera, according to sources.
Mason acknowledged that fact, adding that it dates back to the days of Minnesota Life Insurance Company, now part of Securian, as a small portion of sales representative compensation was W2. His team received medical benefits and a 401(k) match.
To cover these loss of earnings, Cetera includes a provision in its calculation of retained earnings. This will be his one-time payment of $40,000 to $50,000 depending on the advisor.
Mason said the loss of these benefits did not affect his company’s decision to exit. “We lose them wherever we go.”
A spokeswoman for Cetera declined to comment.
Kanter founded Advanced Benefit Systems in 1989 to serve business owners, professionals and wealthy families. He specialized in risk management, real estate and business planning. Mr. Mason joined the firm two years later, drawing on his expertise in high net worth financial planning and investment advisory.
