November 18, 2016
By Bruce Kelly, Investment News
CEO Robert Moore proves he’s not afraid to go toe-to-toe with LPL to recruit top advisers
When Robert Moore joined Cetera Financial Group in May as chairman, and later became CEO, many in the industry wondered if he would recruit head-to-head with his old employer, LPL Financial.
They now have their answer.
Mr. Moore and Cetera have landed one of LPL’s largest and well-known brokers, Ron Carson, who heads a practice with $7.4 billion in client assets, according to a source with knowledge of the move.
“This is a very big win for Cetera,” said Jonathan Henschen, an industry recruiter. “This is a good quality group with lots of assets. The question is, is Cetera giving away the store — like giving him an unusually high payout — just to get him. Sometimes B-Ds will do that with large groups.”
The move could also have a big impact on LPL. Mr. Carson’s departure could make other brokers nervous, said one analyst.
“You are losing one of your big, figurehead advisers, someone who other advisers see as a role model, and they ask, ‘why is he doing that and leaving,’” said Alois Pirker, research director for Aite Group’s wealth management practice. “There’s a risk there. Management has to stop that risk spreading across the firm and needs to communicate to the brokers why this is happening.”
The answer might be Mr. Carson’s relationship with Mr. Moore, who serves on the board of Carson Wealth Management. The relationship blossomed when Mr. Moore was president of LPL. Mr. Moore was expected to take over as CEO of LPL in 2015 from current CEO Mark Casady, but did not get approved by LPL’s board. He later left the company and left the advisory business for a while until returning to Cetera.
Mr. Carson did not respond to calls and emails to comment for this story. A spokesman for LPL, Jeff Mochal, declined to comment. A spokesman for Cetera, Joseph Kuo, said the firm did not comment on rumors.
Mr. Carson’s firm has $2.6 billion in assets at LPL, with the remainder at other custodians. Of the $2.6 billion in assets, $1 billion is in advisory and the rest in brokerage.
Based in Omaha, Neb., Mr. Carson joined LPL in 1989, according to his profile on BrokerCheck. Since then, he has grown his business into one of the leading independent advisory firms in the country, routinely rated by Barron’s magazine as one of the leading independent advisers in the country.
This is the second prominent, long-standing LPL adviser who has recently left the firm. WealthPLAN Partners, co-founded by Brent O’Mara and Todd Feltz, is a hybrid RIA managing $2.2. billion of client assets and was previously affiliated with LPL for 27 years before jumping to Securities America Inc. earlier this month.
During a conference call this month with investors, Mr. Casady gave no hint of such prominent advisers leaving the firm and stated that LPL’s business is currently being supported by “continued strong recruiting.”
With his move to Cetera, Mr. Carson is joining a firm that is trying to shake off a recent history filled with problems. Its prior owner, Nicholas Schorsch, in 2013 and 2014 went on debt fueled buying binge of retail brokerage firms that eventually pushed Cetera’s prior owner, RCS Capital Corp., into bankruptcy.
Earlier this year, Cetera Financial Group emerged from bankruptcy with new owners and no ties to Mr. Schorsch. Mr. Moore joined the Cetera board as chairman in May and then became CEO in September, replacing Larry Roth.
At the start of this week, Cetera, with close to 9,000 financial advisers across a network of seven brokerage firms, experienced a technology meltdown when its systems crashed, leaving brokers with limited access to serving client accounts and managing client money for the better part of Monday and Tuesday.