Cetera Financial Group has signed a definitive agreement to buy Tower Square Securities and Walnut Street Securities from MetLife, a move that will greatly increase Cetera's presence in the Midwest and Northeast. The two firms have about 800 reps and $25 billion in client assets.
Cetera, backed by private-equity firm Lightyear Capital, made the announcement this morning, but did not disclose what it's paying for the two units. Tower Square and Walnut Street, both independent broker-dealers, will become part of Cetera Advisor Networks LLC, an independent b-d and registered investment advisor that provides local support to advisor teams that also share resources through Cetera's nationwide network.
Lightyear Capital was founded by former Paine Webber Group Inc. Chief Executive Officer Donald Marron and is among firms building brokerage businesses in a quest for stable revenues from advising individual investors on their portfolios, reports Bloomberg News.Cetera, based in El Segundo, Calif., has regional branches throughout the United States. Tower Square's and Walnut Street's offices are mostly in the Midwest and Northeast and will become new independent regions, expanding Cetera’s footprint in those areas.
“With acquisitions we look for quality firms that are a cultural fit, and those where we can offer the greatest benefit to the joining advisors,” said Valerie Brown, chief executive officer, Cetera Financial Group. “We are excited to welcome them.”
Like Cetera Advisor Networks, both Walnut Street and Tower Square employ what is called a "super OSJ" model, where they operate in team envidonments and share best practices. All three firms clear through Pershing, which means that advisors won't have to "repaper" accounts and clients can keep their same account numbers, according to Doug King, CEO of Cetera Advisor Networks.
Craig Markham, president of Tower Square and Walnut Street will join Cetera Advisor Networks as senior vice president of advisor relations. He will oversee the sales and support teams, including the smooth transition of the two firms.
After the deal closes, Cetera Financial Group will serve more than 7,000 advisors and have more than $130 billion in total client assets. The brokerage network currently provides wealth management and advisory platforms, broker-dealer and RIA services, and technology for more than 6,500 independent financial professionals and more than 600 financial institutions nationwide.