Erica McGinnis has stepped down as president and CEO of independent broker/dealer network Advisor Group but will remain with the firm as executive vice president and head of transitions.
The sudden timing of the change, in the wake of the group's sale by AIG to Lightyear Capital, led some industry recruiters to question if the move was McGinnis' choice, and what a change in leadership means for the future direction of the b/ds.
Jonathan Henschen, president of the recruiting firm Henschen & Associates in St. Croix, Minn., said the role change “sounds like a demotion.” He added that when executives take on lesser roles it usually is because of one of two reasons: a lack of competency or the executive doesn’t want the stress of the job.
The change in leadership comes three months after AIG officially completed the sale of Advisor Group to Lightyear Capital LLC and PSP Investments.
“I was flabbergasted, because Erica had such a good reputation in the compliance arena,” said Larry Papike, CEO of Cross Search. Prior to her tenure as Advisor Group’s CEO, which began in 2013, McGinnis served as the firm’s senior vice president and chief compliance officer.
Papike added that he hasn’t seen a strong recruiting effort from Advisor Group since at least January, when AIG announced it would sell the b/ds. Advisor Group firms—FSC Securities Corporation, Royal Alliance Associates, SagePoint Financial and Woodbury Financial Services—have been consistent underperformers in advisor recruitment from 2009-2015, according to the long-term rep movement study published by Discovery Data.
Papike said a new CEO may point to the b/d moving in a different direction, given the firm’s recent sale as well as what he views as protracted recruitment efforts.
Valerie Brown, former CEO of Cetera Financial and Advisor Group’s executive chairman of the board, will serve as interim president and CEO while the firm searches for McGinnis’s replacement.
Advisor Group would not comment beyond an emailed statement from spokesman Kevin Dinino: "Erica McGinnis has accepted a role of EVP, Head of Transitions – leading the separation from AIG. This new role will allow focused leadership on our transition to an independent company and to utilize Erica’s deep understanding of the business and our advisors, positioning our organization for success."
Papike wonders what McGinnis’s status will be once the firm has transitioned. “What’s her job when that’s done?”