Cetera Financial Group CEO Larry Roth tells PLANADVISER the firm “is winding down JP Turner in order to enable advisers at that firm to more rapidly access the full range of services and support our network offers through Pershing.”
Roth communicated similar statements across the financial press Friday—sharing the news that JP Turner would be shuttered only about a year and a half after Cetera’s parent company, RCS Capital Corporation (RCAP), first said it would move to buy it.
The initial action by RCAP to purchase JP Turner came one day after RCAP announced the deal through which it initially scooped up Cetera. At the time, RCAP was already engaged in the acquisition of a number of other firms, including Summit Brokerage Services and Investors Capital Holdings. Together, the string of fast-paced acquisitions pushed RCAP’s advisory network above 9,000 producing reps and well into the top-five U.S. advisory networks by staff footprint.
The flurry of acquisition action was driven by then-RCAP Executive Chairman Nicholas Schorsch, who 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) and investment advisory sectors. He has since suffered reputational damage after an accounting scandal at another firm he owned.
According to Roth, since they became part of the Cetera network, many JP Turner advisers “have voiced a strong desire to transition to the Pershing platform. After extensive review, it became clear that the most expeditious and seamless way for this to happen was to invite a significant number of these advisers to Summit Brokerage Services.”
Roth declined to share further details about why closing J.P. Turner would, in fact, be “the most expeditious and seamless way” for its advisers to access Pershing’s services, but presumably the choice was made by Pershing not to accept all the JP Turner advisers that wanted to get on board. Published media reports raise questions as to whether the issue was related to compliance or performance factors among the advisers not invited to join Summit Brokerage Services, but Roth has not confirmed any of this.
Roth only added: “We expect this will be a seamless migration, and that the process will be completed by the end of October of this year. We emphasize that this transition is not part of a broader consolidation strategy, but rather, is intended to address a unique and clear demand from a significant number of J.P. Turner’s advisers.”