Cetera Financial is getting into the business of buying registered investment advisors with the news today that the Genstar Capital–backed firm has acquired MAGIS Financial Partners, a Horsham, Pa.–based hybrid RIA with about $490 million in client assets.
According to the RIA’s Form ADV, MAGIS was previously owned by Ascensus, another Genstar-backed company that provides record-keeping and administration to U.S. retirement plan and 529 plan markets. Terms of the deal were not disclosed.
“It’s really a semblance of us getting into the space of buying RIAs,” said Brett Harrison, head of Cetera Advisors. “Being able to have the opportunity to acquire an RIA—it really gets us definitely in the space of being able to have that piece of the growth engine exemplified here.”
The deal will allow MAGIS to shut down its RIA entity and transition that business to Cetera Advisors’ corporate RIA. MAGIS’ team, which is led by President Steven Zimmerman, will become W-2 employees of Cetera. While Cetera has a W-2 affiliation model within Cetera Investors, the unit that was seeded through its acquisition of Foresters Financial’s U.S. broker/dealer and advisory business, this is the first employee model inside Cetera Advisors.
“For Cetera Advisors, which is historically an independent-only business model, this will be a unique opportunity for them to have an ownership structure that’s really aligned with their mantra,” Harrison said.
MAGIS’s team members were W-2 employees under Ascensus, but wealth management was not the primary business.
Being on the platform will benefit Cetera Advisors, Harrison said, more so than if it were run as an independent RIA. "We’re able to provide them with a lot more organic growth capabilities than they would be able to do on their own."