Cetera sees dozens of Securian advisors walk in wake of deal

So far this year, 43 financial advisors have left Securian Financial Services Inc., the broker-dealer and registered investment advisor that was part of the wealth management business of Securian Financial Group, according to InvestmentNews data. Cetera Financial Group said in January it was buying the Securian wealth business for an undisclosed sum; the business includes more than 1,000 advisors who oversee $24.8 billion in assets under management and $47.4 billion in assets under administration.

The financial advisor departures from Securian come as the financial advice industry expects Cetera to finalize the terms of recruiting bonuses, commonly referred to as “stay” bonuses, for Securian’s 1,000 or so financial advisors before the advisors move this summer to one of the Cetera-branded broker-dealers.

Such payments or transition assistance to financial advisors are made over periods of several years. While details were not clear, industry executives and recruits anticipate Cetera will make generous offers to the Securian advisors.

According to InvestmentNews data, the top two destinations for advisors leaving Securian this year are LPL Financial, which has gained 16 Securian advisors, and StanCorp Equities, which netted 13.

Typical attrition at a large broker-dealer like Securian Financial Services is in the mid-single digits, so Securian appears to be experiencing more financial movement on an annualized basis than is usual.

Some of that advisor movement had already been reported. LPL said last month that it had recruited a team of 14 financial advisors called the Financial Design Group with $850 million in client assets that was formerly registered with Securian Financial Services.

There’s been plenty of time for Securian’s financial advisors to evaluate Cetera and any competitors, one recruiter noted. In any transaction, recruiters come out of the woodwork to persuade advisors to work for another firm.

“The Securian financial advisors have more time for due diligence than I expected to figure things out,” said Casey Knight, executive vice president of ESP Financial Search. “And that’s good for them.”

A Cetera spokesperson did not return a call on Monday seeking comment.

In an interview over the winter, Cetera Financial CEO Adam Antoniades noted that the average production per advisor, meaning total annual fees and commissions, was in the range of $650,000 at Securian, which is more than double the figure at LPL Financial.

Securian is also known for its new entrants program for financial advisors, with 70% or more of its advisors joining the firm through that program, he said at the time. Securian’s broker-dealer revenue is in the neighborhood of $500 million annually.

Many insurance companies have dumped their independent broker-dealers over the past 15 years as a result of the high risks and costs associated with the retail securities industry, along with increasing limitations on sales of proprietary products like variable annuities.

Cetera Financial Group is a giant network of broker-dealers and RIAs with more than 8,000 financial advisors, $365 billion in assets under administration and $125 billion of assets under management, according to the company’s website.

Related Topics: Cetera Financial Group, LPL Financial, Securian Financial