Despite the trouble its parent company RCS Capital (RCAP) is currently undergoing, Cetera Financial Group announced Wednesday that one of its member firms, Cetera Advisor Networks, recruited Empire Asset Management group, a hybrid practice with $200 million in advisory and brokerage client assets.
The deal is the first by Cetera since its parent company, RCS Capital, filed for bankruptcy in March to establish Cetera as an independent firm. At the time, Cetera CEO Larry Roth said the move would be a “fresh start” for the company that would “include significant additional capital” to make investments in tools and resources for the nearly 9,100 advisors it supports.
Based in Albany, N.Y., Empire will join Harvey Bowks, one of Cetera Advisor Network’s super OSJs, for practice management, compliance and operational support.
Empire consists of seven employees serving mass-affluent and high-net-worth retirees. Brad Konopaske, the founder and president, and Paul Paska, the chief branding officer, lead the firm.
“As successful and experienced advisors, Brad Konopaske and Paul Paska had a wide array of options to consider when they chose to take the next step forward for their practice,” Roth said in a statement. “Choosing Cetera reflects the strength of our value proposition, as well as the strong progress we continue to make in transforming into a privately held, independent organization exclusively dedicated to the advisors and institutions we support.”
Jeff Nash, the president of Nash Consulting Group, said the recruitment shows that advisors wouldn’t leave en masse from Cetera in the fallout from RCAP as some predicted.
Cetera’s proven all the doomsayers dead wrong so far, and don’t be surprised if that keeps happening with recruitment and retention at the original four Cetera-branded firms,” Nash said. “And Cetera is only going to get more formidable once their restructuring process is completely behind the network.”
Another of RCAP’s business units, digital compliance and cybersecurity firm Docupace, also announced Wednesday that it reached an agreement with RCAP to repurchase their majority share stake to continue on as an independent company. The company will continue to operate under founder and CEO Michael Pinsker, who had operated Docupace as an independent company under RCAP. The transaction is expected to close in May.