Products January 16, 2014

Principal Unveils Enroll-by-Text Service

A new service from the Principal Financial Group enables workers to enroll in an employer-sponsored retirement plan through text messages.
Reported by

Workers can also join their employer’s retirement plan through a new mobile website, according to a statement from the firm.

“By making the [enrollment] process quick and convenient, we’re able to battle inertia and get individuals to start saving right away,” says Jerry Patterson, senior vice president of retirement income strategy at The Principal.

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

Once individuals have chosen their contribution amount by text message or the quick-enrollment website, new participants can then select their investment elections online or by phone. This can be done at the same time or at a time convenient for the individual. 

More information on the service is available here.

Deals & People January 16, 2014

RCS Capital to Acquire Cetera for $1.15B

In a move expected to create one of the largest broker/dealer networks in existence, RCS Capital Corporation (RCAP) is set to acquire Cetera Financial Group for $1.15 billion.
Reported by

Following the cash transaction, Cetera and its subsidiaries will become part of RCAP’s retail advice business, which is already absorbing a number of other firms, including Summit Brokerage Services and Investors Capital Holdings, according to a statement from RCAP.

Valerie Brown, president and CEO of Cetera, will continue to oversee her company’s respective brands as part of the RCAP family of companies. Her senior management team also joins RCAP under the deal.  

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

Private equity firm Lightyear Capital is the current owner of Cetera, which was originally formed in 2010 following the sale of three ING broker/dealers. The firm provides independent broker/dealer services and investment advisory services through four distinct platforms. They are Cetera Advisors, Cetera Advisor Networks, Cetera Financial Institutions and Cetera Financial Specialists.

Taken together, the networks represent approximately 6,600 registered representatives operating across the U.S., bringing RCAP’s distribution footprint to some 8,900 representatives—a number that will likely grow following other pending acquisitions. The purchase of Cetera also adds $145 billion in assets under administration and approximately 2 million new clients for RCAP.

RCAP says it’s set to become the second-largest independent financial adviser network in the U.S., based on number of advisers as measured by the 2013 independent broker/dealer rankings report from Financial Advisor Magazine. That report lists LPL Financial, with about 13,300 advisers, as the biggest independent broker/dealer network by adviser numbers. Ameriprise Financial is ranked second, with about 9,700. It’s yet unclear if or when RCAP will surpass Ameriprise in terms of adviser numbers.  

RCAP says the deal will diversify its revenue stream, which presently is derived from its wholesale distribution business, capital market services and transfer agency lines of business.

RCAP’s executive chairman, Nicholas Schorsch, has received significant media attention in the last several years for piloting large acquisitions and reshaping the financial services industry, especially within the real estate investment trust (REIT) sector.

Schorsch’s real estate company, American Reality Capital Properties Inc., has a market capitalization of approximately $4 billion and was among the biggest sellers of nontraded REITs and nontraded business development companies over the past two years. 

«