Girard was among the last firms purchased under the Schorsch empire. In 2014, accounting irregularities were discovered at one of his publicly traded entities, culminating in the resignation of Schorsch and other senior executives. Through the end of 2015, RCS was forced to write off many of Schorsch's acquisitions, culminating in a January 2016 bankruptcy.
In May 2016, RCS Capital emerged from bankruptcy with an independent Cetera Financial Group as its only operating business. As the parent Cetera firm transformed, it has helped several of its subsidiaries successfully wind down their broker-dealer businesses, including J.P. Turner in 2015, and VSR Group and ICC Capital Corporation in 2016.
In June, Cetera Advisors Networks added HBW’s $800 million in assets as the firm wound down its broker-dealer platform.
Taylor argues that in the wake of regulatory change and fee compression, small and mid-sized firms can survive as independent entities by jettisoning the burdens of being broker-dealers and converting into independent advisor groups affiliated with hybrids.
“This is the model that Cetera Advisor Networks is based on,” says Taylor. “We’ve noticed a trend of small broker-dealers deciding to close up shop because of the regulatory burdens. That’s our foundation, and we’ve seen an increase in that demand.”