Cetera has introduced what it is calling the industry's first guaranteed growth program for newly affiliated advisors.
Incoming advisors will see at least 38% faster growth relative to their peers, Cetera promises, or their affiliation fees will be refunded.
Recruiters say the approach has some promise, but they don't expect it will change the game for Cetera's incoming advisor flows.
The "Cetera Growth Guarantee," announced Monday, is for newly affiliated financial advisors and institutions participating in the firm's GrowthLine program.
GrowthLine and the new guaranteed growth program are components of the firm's Growth360 suite of practice development tools, which was initially launched in 2021 as a peer-based benchmarking methodology and strategic growth framework developed to help affiliating advisors expand their practices.
"Since the launch of our Growth360 program in 2021, Cetera has proven its ability to meaningfully grow advisor practices with tools and offerings that focus holistically on driving organic growth," said Adam Antoniades, CEO of Cetera Financial Group, in the announcement. "Three years later, we are committed and confident in Cetera's ability to help advisors grow their business faster than they would anywhere else in the industry."
What's Being Guaranteed
Under the official terms published on Cetera's website, if an affiliating advisor joins a broker-dealer or RIA affiliated with Cetera Financial Group and participates in GrowthLine, they should be eligible to participate in the guarantee program.
The guarantee kicks in if such an advisor fails to grow their assets under administration "at least 38% faster than [their] peer group during the year following the latter of the date [they] complete the program or [their] four month affiliation anniversary."
In such a case, the terms spell out, the BD or RIA will refund affiliation fees for that year, up to $2,400, upon the request of the advisor. The advisor's "peer group," in turn, includes "all individuals who registered with a Cetera Company before 2020 and remained registered throughout the measurement period and who had verified assets under administration exceeding $20 million at the beginning of the measurement period."
The firm notes that the GrowthLine program is a marketing program and does not seek to improve clients' account performance or provide investment advice. Additionally, market performance is excluded from the comparison.
Cetera's Recruiting Efforts
Cetera reports that, thus far, the GrowthLine program, which is available to all Cetera advisors and valued at more than $150,000 in services, has served more than 1,000 advisors with a data-backed track record of outpacing the growth of other advisors. Firm leaders say financial professionals who have used the growth evaluation tools report greater clarity on the best opportunities to grow their practices, and they receive customized resources and guidance to capture new revenue.
This expansion of the GrowthLine program comes less than a year after the firm announced its 1.2 billion acquisition of Avantax. The combined entity — assuming that most Avantax advisors and staff move to Cetera in the months and years ahead — would include 12,075 financial professionals, $424.8 billion in AUA and $163.6 billion in AUM.
"While other firms offer growth resources for advisors, too often they don't accurately measure success, make unsubstantiated claims and entail a financial cost outside of an advisor's affiliation fees, which is not the case at Cetera," Antoniades said.
According to Antoniades, GrowthLine provides a customized and integrated growth plan that brings together "a powerful combination of data, segmentation, AI and technology," paired with a full-service marketing strategy, planning and execution. He said the program ultimately provides Cetera advisors with a holistic sales and marketing transformation designed to drive maximum customer lifetime value, and this is why the firm is confident in offering the new guarantee.
A Novel Approach to Recruiting?
Asked whether Cetera's claim that its new "growth guarantee" is indeed an industry first, several advisory industry recruiters said that was more or less true, and they agreed the announcement was an interesting development in the fast-evolving world of financial advisor mergers and acquisitions. However, they are unsure whether the move will dramatically affect the firm's recruiting success or result in many advisors making different affiliation decisions than they otherwise would have.
