With Larry Roth now at the helm of RCS Capital, the company will continue expanding and use Roth’s experience to make operations more efficient, but will maintain seperate broker/dealer identities, says RCS Capital's Executive Chairman Nicholas Schorsch.
"Larry and his team, if you look at the team we announced, they’re all existing Cetera people, so this isn’t a big switch-around or changeup. We’ve created a broader, more open management structure that will allow for our company to grow fruitfully to a much larger level,” said Schorsch, in an interview with Wealthmanagement.com.
Schorsch also pointed out that there haven’t been any layoffs or payroll reductions. “These are all things we promised when we came. And we’re staying with those promises. It’s about building—it’s about building a better and bigger company, but better first,” he says.
And looking ahead, Schorsch says Roth was a good fit to lead, with his unique ability to build multiple phases of a brand. “At Advisor Group, what Larry was so good and proficient at was, Larry was able to take Sagepoint, Royal Alliance, FSC—all the different brands at Advisor Group—and allow them to have their own identities. And that’s something I’ve espoused for a long time. And Larry is just the right leader to take us into the future with that,” Schorsch says.
With that in mind, one of the areas RCS Capital has focused on is the types of services that be can scaled across businesses, such as organized back office support, marketing and compliance efforts. “It’s just looking at where the areas of scale are,” Schorsch says. One of the main areas of scale for RCS Capital right now is consolidating all of the clearing operations onto Pershing, since all of seven of the broker/dealers are on the Pershing platform at some level. “That is obviously a big efficiency for us. And we’re going to continue to do that because that’s what the advisors want,” Schorsch says.
“What’s missing in this industry is one platform where the advisors all want to be—to have that platform that has the right front-end and the right back-end, the right culture, the right mix of fee-based and commission advice, and having a broad and deep enough product offerings. Those are the things that really attract advisors and their clients to a business,” according to Schorsch.
But while Larry’s experience makes him the ideal fit, Schorsch says it was not the original plan. “The original plan was slightly different. The most important part of every plan is that it can change. And in this case, we are adapting to the environment that surrounds us.”
Valarie Brown’s departure changed things a bit, Schorsch says. “Valerie promoted Adam and then the relationship changed with Valerie and then we brought Larry in.” Brown promoted Adam Antoniades as president of Cetera two weeks ago. “She had already reorganized her team to allow her to have more free time to focus on the global organization. And Larry stepped into that role. It was actually very seamless,” he says.
“Valerie has obviously done a terrific job building the business, but remember Cetera is only about half the size of the overall organization—about 6,000 of our 9,000 advisors—so it’s a much bigger organization than what she had previously run.”
Additionally, Schorsch noted that the changes had absolutely no impact on the other broker/dealers whatsoever. “Marshall Leeds is in charge of his group, Tim McAfee [at J.P. Turner], everything is very smooth. Those guys are awesome.”
“This is about building. We’re not tearing down, we’re not cost-cutting, we’re not trimming back. We’re building a great business. And we’re building it around those great advisors in those seven firms we have.”