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Practice Management > Building Your Business > Leadership

Cetera CEO: What's Next After Protective Life Deal

By John Manganaro

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What You Need to Know

  • The acquisition of Concourse Financial Group brings 350 advisors overseeing $16 billion in combined assets to Cetera.
  • More M&A is likely for Cetera and its peers, but organic growth remains an important focus, CEO Mike Durbin says.
  • With the right tools, the typical RIA will be able to serve far more households in the future as demand grows, he says.

Cetera Financial Group has agreed to acquire Concourse Financial Group Securities Inc. (CFGS), a subsidiary of the insurance company Protective Life Corp, in a move that Cetera CEO Mike Durbin said reflects both the evolving face of wealth management and the strong momentum of his firm.

Based in Birmingham, Alabama, CFGS comprises Protective’s affiliated retail distribution system, dually registered broker-dealer and registered investment advisor. The acquisition is expected to bring to Cetera some 350 insurance-focused financial professionals who oversee more than $12 billion in assets under administration and $4 billion in assets under management.

“We don’t want to be in the position of trying to pick winning and losing business models,” Durbin told ThinkAdvisor just ahead of the deal’s public announcement. “The country supports lots of different flavors of advice, as you know, and they change over time, too. We feel really good about the potential.”

This dynamic explains why Cetera is making acquisitions and doubling down on organic growth efforts across its advisory channels, Durbin said, noting the CFGS acquisition represents the latest insurance company carve-out for Cetera and an important milestone in the growth of Cetera Wealth Partners (CWP). 

CWP, Durbin explained, largely consists of the previously acquired independent financial planning channel of insurer Voya Financial. 

“Cetera has a proven track record of acquiring and successfully integrating independent broker-dealers affiliated with insurance organizations, and Concourse Financial Group Securities represents a tremendous opportunity in today’s rapidly consolidating market,” Durbin said.

Aaron Seurkamp, president of the protection and the retirement divisions for Protective, said in a statement that the transaction will allow the insurer to focus on its core competencies in the life insurance and annuity businesses while enabling Concourse Financial Group Securities financial professionals and clients to benefit from Cetera’s resources and support.

“Cetera’s established success transitioning similar organizations to their platform gives us great confidence in this deal and underscores why Cetera is the right fit for this business,” Seurkamp said.

Overall, Durbin said, Cetera faces big opportunities in terms of future acquisitions — both in the insurance space and more generally — but the most exciting prospects actually have to do with organic growth.

“As we sit here today, we still have many advisors that do not operate as the principal advisor in a given household relationship,” Durbin said. “Even if they are the primary advisor, maybe they only have 60% of the total household wallet share — because there’s also an insurance person or a bank advisor in the picture.”

The latest transaction will enable Cetera to strategically align the CFGS team within the existing Cetera Wealth Partners community, Durbin emphasized, while increasing Cetera’s scale and creating new opportunities for growth for the incoming advisors.

Overall, Cetera is home to approximately 12,000 financial professionals and their teams, with more than $521 billion in assets under administration and $224 billion in assets under management.

Making ‘The Big Feel Small’

Durbin stressed that Cetera’s growth journey has involved a number of M&A deals, but that’s only part of the picture. Guiding the firm forward is about balancing the deployment of capital for M&A transactions with boosting organic growth.

It’s also a key part of the strategy to “make the big feel small.”

“It’s not like we just have 12,000 advisors marching blindly forward,” Durbin said. “We have our advisors organized strategically across our different channels, and we have distinct communities within each channel. We do this to help make the big feel small, if you will, and that’s a core component of what we are trying to accomplish day in and day out.”

Key to this approach, Durbin said, is Cetera’s multi-affiliation model approach. Other growing “communities” include Cetera Wealth Management Group, which is built on Cetera’s 2023 acquisition of Securian Financial Group’s retail wealth business, and Cetera Investors, built on the 2019 acquisition of Foresters Financial’s U.S. brokerage and investment advisory business.

Durbin added that M&A transactions may get the most media attention, but the bulk of his daily work is focused more on the organic growth front and on ensuring the firm maintains its client-focused culture.

“As you know, a key part of maintaining organic growth is also keeping what you have, so we are working day in and day out to ensure our advisors have the support they need to run their businesses,” Durbin said. “We are building a proven record of advisors growing faster with us than they would if they weren’t with us.”

Growth Through Financial Planning

Cetera can deepen its relationship with clients across its channels by “leading with financial planning,” Durbin argued, and by investing in the platform and delivering the capabilities that advanced planners need in the current environment.

“If you can get a financial plan in place with a household, you either are the primary advisor or you’re on your way to being the primary advisor,” Durbin said. “It’s also important to note that there are different levels of planning — gradations of planning that range from the foundational elements all the way up to the most complicated cash flow planning and estate planning.”

Durbin said Cetera is happy to back advisors all along this spectrum by connecting them with the planning technology and capabilities they need, including via platforms like eMoney and MoneyGuidePro.

Growing Demand

While the aging advisor population is one point of concern for RIA industry leaders, Durbin argued there is actually reason for optimism in the broader demographic trends.

“There’s been about 300,000 advisors in the U.S. for a decade or longer,” Durbin said. “The number hasn’t moved even as there have been many people coming into the industry and an ever-increasing demand for the services of advisors.”

That creates good secular dynamics for the industry, Durbin said, because more and more households want advice against a fixed supply of advisors. This means it’s key that technology and product offerings are being brought to bear that let advisors take on more households.

“The productivity and efficiency of practices is getting better, and that should help us address any lack of headcount coming into this industry,” Durbin said.

Traditionally, the typical RIA would have 100 to 125 households. But in recent years, managed account platforms, planning tools and affiliation options have changed the game.

“Moving forward, I believe an advisor with the right tools can handle 200 or 250 households,” Durbin said. “That’s a sea change.”

Pictured: Mike Durbin

John Manganaro

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