Cetera in Talks to Buy Parts of Voya Financial Advisors

Cetera President & CEO Adam Antoniades

Cetera Financial Group is reportedly in talks to buy some of the broker-dealer assets of Voya Financial, according to industry sources who expect the deal to be announced as soon as Monday or Tuesday.

The acquisition from Voya Financial Advisors could add over 1,000 financial professionals to Cetera's roughly 8,000. The talks were first reported Saturday by Wealth Management,

"Whew. This would be a big deal. Literally. 1,600+ advisors at Voya? The search for B/D scale continues (and Voya seems to think that PE investors into B/Ds make it a good valuation to sell?)?" tweeted blogger and financial planner Michael Kitces on Sunday.

Cetera is owned by the private equity firm Genstar Capital, which bought a majority stake in the firm in 2018.

Voya, which sells insurance and other financial products, is a publicly traded entity spun off from ING in 2013.

"One step closer to proverbial 'freedom' for those advisors though. Sounds good for them.," responded Daniel Yerger, president of My Wealth Planners, on Twitter.

Voya and Genstar declined to comment on the matter. Cetera did not respond to a request for comment as of press time.

Insurance Roots

What makes the reported deal "super interesting" is the ING connections between the different players, said one industry insider close to firms involved in the talks who preferred to go unnamed.

Overall, the Voya development is part of the trend of insurance companies exiting the advisor business, the source explained, adding that Cetera has experience buying and integrating BDs from insurers — such as those previously owned by MetLife.

Before the financial crisis, the Cetera broker-dealers were owned by ING. The three BDs that constituted the ING Advisors Network — Financial Network, Multi-Financial and PrimeVest — were sold to Lightyear Capital in 2010, when the private equity firm was led by its founder Don Marron.

At the time of the sale, the ING Advisors Network included about 4,800 advisors with $75 billion in assets under administration. Its CEO was Valerie Brown, who moved to the renamed entity, Cetera Financial Group, after Lightyear bought it.

In 2013, Cetera struck a deal in to buy Tower Square Securities and Walnut Street Securities, two BDs owned by insurer MetLife. That came on the heels of Cetera acquiring Genworth Financial Investment Services, which focused on tax and accounting professionals.

A year later, Lightyear Capital sold Cetera Financial Group to RCS Capital for $1.15 billion. The BDs involved in the sale were Cetera Advisors, Cetera Advisor Networks, Cetera Financial Institutions (doing business as Cetera Investment Services) and Cetera Financial Specialists.

Then in late 2014, RCS became entangled in accounting irregularities at a related real-estate investing company — American Realty Capital Properties — led by REIT developer Nicholas Schorsch and built RCS to manage his brokerage networks.

Genstar Capital bought a majority stake in Cetera in 2018 after the business became a stand alone entity, following the bankruptcy of its former parent company and the restructuring of its operations. At that point. it included two more BDs — First Allied Securities and Summit Brokerage Services.

In 2019, Cetera bought the broker-dealer and advisory-business assets of insurer Foresters Financial, which then included 500 independent advisors.

See: Cetera Acquires $4B Affiliated Firm