Cetera CEO: What's Next After Protective Life Deal
What You Need to Know
The acquisition of Concourse Financial Group brings 350 advisors overseeing $16 billion in combined assets to Cetera.
More M&A is likely for Cetera and its peers, but organic growth remains an important focus, CEO Mike Durbin says.
With the right tools, the typical RIA will be able to serve far more households in the future as demand grows, he says.
Cetera Financial Group has agreed to acquire Concourse Financial Group Securities Inc. (CFGS), a subsidiary of the insurance company Protective Life Corp, in a move that Cetera CEO Mike Durbin said reflects both the evolving face of wealth management and the strong momentum of his firm.
Based in Birmingham, Alabama, CFGS comprises Protective’s affiliated retail distribution system, dually registered broker-dealer and registered investment advisor. The acquisition is expected to bring to Cetera some 350 insurance-focused financial professionals who oversee more than $12 billion in assets under administration and $4 billion in assets under management.
“We don’t want to be in the position of trying to pick winning and losing business models,” Durbin told ThinkAdvisor just ahead of the deal’s public announcement. “The country supports lots of different flavors of advice, as you know, and they change over time, too. We feel really good about the potential.”
This dynamic explains why Cetera is making acquisitions and doubling down on organic growth efforts across its advisory channels, Durbin said, noting the CFGS acquisition represents the latest insurance company carve-out for Cetera and an important milestone in the growth of Cetera Wealth Partners (CWP).
CWP, Durbin explained, largely consists of the previously acquired independent financial planning channel of insurer Voya Financial.
“Cetera has a proven track record of acquiring and successfully integrating independent broker-dealers affiliated with insurance organizations, and Concourse Financial Group Securities represents a tremendous opportunity in today’s rapidly consolidating market,” Durbin said.
Aaron Seurkamp, president of the protection and the retirement divisions for Protective, said in a statement that the transaction will allow the insurer to focus on its core competencies in the life insurance and annuity businesses while enabling Concourse Financial Group Securities financial professionals and clients to benefit from Cetera’s resources and support.
“Cetera’s established success transitioning similar organizations to their platform gives us great confidence in this deal and underscores why Cetera is the right fit for this business,” Seurkamp said.
Overall, Durbin said, Cetera faces big opportunities in terms of future acquisitions — both in the insurance space and more generally — but the most exciting prospects actually have to do with organic growth.
“As we sit here today, we still have many advisors that do not operate as the principal advisor in a given household relationship,” Durbin said. “Even if they are the primary advisor, maybe they only have 60% of the total household wallet share — because there’s also an insurance person or a bank advisor in the picture.”
The latest transaction will enable Cetera to strategically align the CFGS team within the existing Cetera Wealth Partners community, Durbin emphasized, while increasing Cetera’s scale and creating new opportunities for growth for the incoming advisors.
Overall, Cetera is home to approximately 12,000 financial professionals and their teams, with more than $521 billion in assets under administration and $224 billion in assets under management.
Making ‘The Big Feel Small’
Durbin stressed that Cetera’s growth journey has involved a number of M&A deals, but that’s only part of the picture. Guiding the firm forward is about balancing the deployment of capital for M&A transactions with boosting organic growth.
It’s also a key part of the strategy to “make the big feel small.”
