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$7.7B Cetera Affiliate Drops BD Business, Blames DOL

August 18, 2017

A Cetera Financial Group-affiliated firm is deregistering as a broker-dealer and joining Cetera’s network as an independent advisor group, Cetera says in a press release. The decision to wind down was driven by the Department of Labor’s fiduciary rule, which went into partial effect in June, according to WealthManagement.com.

Girard Securities, whose 200 independent advisors oversee $7.7 billion, will now operate as the Girard Region affiliated with Cetera Advisor Networks, according to the company press release. Girard Securities CEO Susie Woltman Tietjen will transition to a new role as regional director of the Girard group of advisors but will continue heading the management team from the firm’s San Diego, Calif., headquarters “for the foreseeable future,” Cetera says.

Girard’s transition follows HBW Partners’ June move from being a standalone independent broker-dealer to operating as an “autonomous region” within Cetera, according to Cetera. Cetera executive Tom Taylor says he sees this trend continuing as a result of changes spearheaded by the DOL.

“Our firm is extremely well-positioned for continued success in recruiting, as smaller and mid-sized firms increasingly seek ways to remain together as autonomous entities, but without the administrative and regulatory burdens of being a broker-dealer in a post-DOL environment,” Taylor says in the press release.

Speaking with WealthManagement.com, Tietjen reiterates that the decision to deregister had to do with the DOL’s fiduciary rule, which requires retirement-account advisors to put clients’ interests first.

“I don’t know how in the world we could’ve done it as a small firm, and I, quite frankly, don’t know how others are doing it, which just reinforces why being part of a larger organization is so critical today,” she tells the publication. “If my team is constantly in the weeds on some kind of regulatory project, that takes us away from serving and supporting our advisors."

By Alex Padalka
  • To read the WealthManagement.com article cited in this story, click here.