A wealth management firm affiliated with Cetera said Thursday it plans to more than double its advisor headcount and the assets it oversees, a sign the “super” Office of Supervisory Jurisdiction model is working.
Horizon Financial Advisors, which is part of the independent broker/dealer Cetera Advisors, currently has 45 affiliated independent financial advisors across the U.S. who collectively oversee approximately $2 billion in assets. It serves individuals, families, institutions and retirement plans—all of which will play a part in its new growth targets.
But it has big plans to grow. Over the next four years, Horizon plans to add 55 new independent advisors, and with them, an additional $2 billion to $3 billion in client assets, bringing its total to between $4 billion and $5 billion.
While the goals might seem aggressive, Horizon founder and CEO Pete Bush said it’s just a continuation of the firm’s trajectory. The firm had only six affiliated advisors in 2011.
To maintain the momentum and more than double its size, the group plans to spend $1 million to $3 million to acquire independent advisory practices and books of business consisting of retirement plans. The strategy is to acquire businesses whose leaders’ succession planning is driving them toward a sale and, if they don’t have them already, help them find associates to take it over.
It will also target advisors and groups looking to get out of the business of managing retirement plans but have the clients and interest in maintaining a core wealth management business. The Horizon unit that manages retirement accounts, run by Bush’s brother, would take those over and the advisors winding that part of their business down could either start their own group or be folded into an existing group.
Bush said the future of the group, and super OSJs as a whole, will depend on the multi-channel approach—one in which firms have both 1099 and full-time employees.
“Our vision for growth is also a vision for how all Super OSJ groups can remain relevant and successful in an industry landscape that demands a deeper level of engagement among advisors with their clients than ever before,” Bush said.
Many forecasted consolidation in the independent channel would pick up in recent years and that’s expected to continue into 2018. Bush likened the trend to what has already happened in some other industries. Like pharmacists and farmers, Bush thinks there will be a fewer number of single-advisor businesses and smaller practices, as regulatory hurdles and expenses like technology become more burdensome.
Chip Roame, the managing partner of Tiburon Strategic Advisors, a market research, strategy consultant to financial services firms, said he is impressed with the advisor aggregators gaining traction and that the super OSJ model “seems to be working.”
Last year, a number of firms closed down their b/ds in favor of becoming OSJs.
Capital Guardian, a Miami-based independent b/d and registered investment advisor with 35 advisors, dissolved its b/d and joined Fort Lauderdale-based Kovack Securities as a super OSJ. Cetera member firm Girard Securities, with 200 advisors and $7.7 billion in client assets, also deregistered itself as a b/d and joined Cetera Advisor Networks as a super OSJ.
