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San Diego-based First Allied had close to 600 brokers and financial advisers under its roof before the Covid-19 pandemic.

First Allied Securities Inc., which was open for almost 30 years and involved in a series of high-profile transactions in that time, said at the end of last month that it had closed, according to its BrokerCheck profile.

Part of the Cetera Financial Group network of broker-dealers, which is owned by private equity manager Genstar Capital, First Allied Securities was based in San Diego. Before the Covid-19 pandemic, it had close to 600 brokers and financial advisers under its roof who generated an average of $263,000 in annual fees and commissions in 2018, according to the most recent data available from InvestmentNews Research.

“First Allied is no longer a separate legal entity, but its brand is alive, well, and flourishing,” a company spokesperson said in an email.

Cetera’s strategy in closing First Allied was similar to how it recently shuttered another former broker-dealer that is now a giant branch office, Summit Brokerage Services Inc., the spokesperson added.

“Putting the First Allied brand under Cetera Advisors gives this community of more than 400 financial professionals access to an enhanced tech stack, and our unified workstation, AdviceWorks,” the spokesperson noted.

Cetera Financial Group, which at one time had as many as a dozen broker-dealers in its network, now lists four extant broker-dealers on its website: Cetera Advisors, Cetera Advisor Networks, Cetera Investment Services and Cetera Financial Specialists. Each caters to a different type of financial adviser. Networks is a collection of giant branch offices while Specialists focuses on CPAs and tax professionals.

Adam Antoniades, CEO of Cetera Financial Group, which has $353 billion in total assets, was a senior executive at First Allied Securities and started there in 2005. First Allied Securities was known in the independent broker-dealer industry for targeting growth-focused advisers with marketing skills and as a firm where financial advisers knew the back-office employees well, industry observers said.

Closing broker-dealers and moving advisers under the roof of another firm is a tried-and-true method of cutting costs for large networks.

“When you go from 12 firms down to four, that’s what a private equity manager is all about,” said Jon Henschen, an industry recruiter. “That’s a cut to staffing while spending on buying broker-dealers and recruiting.”

Since 2010, when what eventually became Cetera was spun off from Dutch insurer ING Groep and purchased by Lightyear Capital, the network has made at least a dozen broker-dealer acquisitions. Cetera, at the time controlled by former nontraded REIT czar Nicholas Schorsch, bought First Allied Securities from private equity manager Lovell Minnick in 2013.

Cetera Financial Group eventually defaulted on its debt and then emerged from bankruptcy, ultimately to be purchased in 2018 by Genstar for $1.7 billion.