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Longtime Boston-based independent broker/dealer Cantella & Co. has withdrawn its broker/dealer and RIA registrations and converted into a super office of supervisory jurisdiction (OSJ) with Cambridge Investment Research. Cambridge brought over 105 Cantella advisors in December 2022, representing approximately $5 billion in assets under management.

The Cantella brand and leadership team, which includes CEO and CIO Jay Lanstein, President and Chief Revenue Officer Jennie Devlin, CFO and Director of Trading Bill McEvoy, and Chief Risk Officer and CCO Sheelagh Howett, remain—only now with a Cambridge broker/dealer affiliation and under its corporate RIA.

Jeff Vivacqua, president of growth and development at Cambridge, said Cantella made the move because the firm’s executives didn’t want to deal with the operational and compliance tasks involved in running a broker/dealer and an RIA. The leadership wanted to focus on the growth of their financial advisors. And while Cantella had built some systems internally, it wanted to leverage a larger firm for the technology and operations.

“I think they chose to not build everything themselves,” Vivacqua said. “It’s a speed-to-marketplace, so they could focus on the growth aspects and the needs of their advisors.”

Jonathan Henschen, founder of the recruiting firm Henschen & Associates, said he believes the firm wasn’t able to reinvent itself to get the growth it hoped for, partially because it didn’t have a clear niche in the marketplace.

“If you’re not a big firm, you better have an area you specialize in that you do well, otherwise you become ambiguous, and it’s a tough sell. I think that was their demise,” he said.

In 2021, Cantella was charged by the Securities and Exchange Commission for failing to disclose revenue-sharing agreements with its clearing broker when recommending and sweeping idle cash in client accounts into certain money market funds.

Cantella cleared through Fidelity, Pershing and Raymond James; Cambridge uses Fidelity and Pershing, but the assets that were with Raymond James will have to be converted to one of those two firms.

Cantella has a rich history; the firm was founded in 1952 by Vincent Cantella, a son of Sicilian immigrants who grew to become a legend in Boston’s financial services community and as a specialist on the floor of the Boston Stock Exchange. In 1969, the company bought a seat on the New York Stock Exchange. At one time, Cantella was one of the largest execution providers for institutional investors and asset owners in Pacific Rim countries, and it eventually became a clearing firm for small b/ds, according to the firm’s website.

Cantella died in 2006 at the age of 89.

The entrepreneurial spirit ran in the Cantella family. Vincent’s father, Michele, helped transform a small, regional pasta-making business into nationally known Prince Macaroni Company before it was sold to Borden Foods for $164 million in 1987.

Read the full article here.