Former LPL Financial President Robert Moore will be named non-executive chairman of the board of Cetera Financial once it emerges from bankruptcy, which is expected to take place this month or next, according to a source familiar with the board selection process who asked not to be named.
“Consistent with any change of ownership, and as previously disclosed, we are putting in place a new board of directors upon the company’s emergence from the restructuring process,” said David Orlofsky, Chief Restructuring Officer and CFO of RCS Capital, Cetera’s current parent, and Senior Managing Director of Zolfo Cooper.
Last March, Moore stepped down from his role at LPL to become CEO of Legal & General Investment Management America, an asset manager; he’s expected to continue in that role while serving as Cetera’s non-executive chairman, the source said. Larry Roth will continue to serve as CEO of Cetera.
“If this is true, Robert Moore would be a very logical choice for chairman of Cetera’s parent company board,” said Ruth Papazian, the retired Chief Marketing Officer of HD Vest Financial Services and former CMO of LPL. “Larry Roth and his senior management team have clearly earned the trust of Cetera’s advisors with their deft handling of the company’s restructuring process so far, and adding a recognized industry leader like Robert to the team would provide an added boost of confidence to the entire industry about Cetera’s future prospects.”
Tuesday was the last day objections to the company’s bankruptcy plan could be filed, and a search for such filings in public court documents did not reveal any. A source familiar with the company’s bankruptcy process suggested that there are no further impediments to an expeditious emergence from Chapter 11 for Cetera’s parent company and its broker/dealer holding companies.
In late January, RCAP filed for pre-arranged Chapter 11 bankruptcy after reaching agreements with a majority of its creditors. Then in March, the company filed a pre-packaged Chapter 11 bankruptcy for the holding companies of some of its b/ds. The move was meant to restructure the holding companies’ terms with RCAP creditors and bring Cetera Financial, the firm’s brokerage arm, closer to becoming an independent entity out from under the thumb of RCAP.
As part of the restructuring, Investors Capital Corp., one of Cetera’s b/ds, will be merged with Cetera Advisors, and VSR Financial will merge with Summit Brokerage Services.
“This shouldn’t come as a surprise, given that these firms never seemed like a very strong fit with the rest of the Cetera network,” said Jeff Nash, president of Nash Consulting Group, a practice management company that has worked with various Cetera firms over the years, in email comments. “Cetera appears to be providing impacted advisors with ample time to make decisions on where they should go next. Advisors impacted by this should approach it as a chance to calmly assess what they really want out of any future broker-dealer relationship, versus giving in to the immediate noise from the usual industry doomsayers who are the first to shout panic.”
“We will be selective with respect to the advisors invited from these firms to affiliate with our network’s other broker/dealers, in order to ensure the best fit possible with our company’s broader mission and values following the completion of our transformation process,” said Joseph Kuo, a Cetera spokesman. “We are taking this step to drive an enhanced and more focused support experience for selected advisors from these firms. We expect to share further details when we announce the completion of our transformation process soon.”
