Aretec, the parent company of Cetera Financial Group, this morning rounded out its board of directors and announced the appointment of three veteran executives to its seven-person board.
The three new directors are Mary Cranston, a noted attorney; Robert Dineen, a veteran of both wirehouses and independent broker-dealers; and Edmond Walters, the founder and CEO of eMoney Advisor, which was sold to Fidelity in February 2015. Months later, he resigned.
Cetera is looking for a fresh start after its former parent company, RCS Capital, or RCAP, last month emerged from bankruptcy. RCAP entered into a pre-packaged Chapter 11 bankruptcy in January.
RCAP was formerly controlled by Nicholas Schorsch, who has no role in the new company. The holding company that now owns Cetera is called Aretec, which is Cetera spelled backwards. The firm is now owned by its former creditors.
The three new board members join four others previously appointed as part of the bankruptcy reorganization process: non-executive chairman and former president of LPL Financial Robert Moore; Larry Roth, CEO of Cetera Financial Group; Michael Kaufman, principal of Redwood Capital Management; and David King, managing director at
Fortress Investment Group.
“We are very pleased with the quality and caliber of individuals we have attracted to our board,” Mr. Moore said in an interview. “We are very excited about working with them.”
As for Mr. Walters, Aretec was looking specifically for a member of its board who worked in technology, Mr. Moore said.“He has a technology and adviser background,” Mr. Moore said.
One Cetera adviser clearly saw appointing Mr. Walters to the board as a positive for Cetera's advisers.
“It's interesting because advisers who have used eMoney said they found more client money and added assets. It's been successful for them,” said the adviser, who asked not to be named.
“Technology has been moved up to the board room where it should be,” the adviser said, adding that several technology systems have been stacked onto each other at Cetera over the years. “We affectionately call technology a 'Franken-monster.' It's been a series of bolt-ons after bolt-ons, but Pershing seems to have made it work.”
Pershing is the main clearing firm for the Cetera broker-dealers.
Mr. Dineen is a rare bird in the brokerage world. He is a veteran executive of both a leading wirehouse and large independent broker-dealer network. At Merrill Lynch, he worked for 20 years with stints as a senior manager for two CEOs, David Komansky and E. Stanley O'Neal, before leaving. In 2003, he became CEO of the Lincoln Financial Network of independent broker-dealers, eventually retiring a decade later.
Ms. Cranston, who will head the board's risk committee, is the retired senior partner and past chairwoman at Pillsbury Winthrop Shaw Pittman, an international law firm.
Mr. Dineen will lead the audit committee and Mr. Moore the compensation committee.
Cetera Financial Group is home to 10 broker-dealers and 9,000 advisers.
The consolidation of Cetera's broker-dealers is beginning. Known for selling alternative investments like nontraded real estate investment trusts, VSR Financial Services, is merging with into another Cetera firm, Summit Brokerage Services Inc.
Likewise, Investors Capital Corp. is merging into Cetera Advisors.
Cetera Financial Group is also likely to sell its broker-dealer Legend Equities Corp., which focuses on retirement plans for teachers and employees of tax-exempt organizations.
