Cetera to acquire Securian's wealth business with 1,000 financial advisors

Cetera Financial Group agreed to acquire the retail wealth management business of Securian Financial Group, the latest move by an insurer to step away from a related but different industry.

Cetera, the Los Angeles-based independent wealth manager with the backing of private equity investor Genstar Capital, reached a deal on Jan. 25 to acquire certain assets related to St. Paul, Minnesota-based Securian's brokerage, registered investment advisory firm and insurance agency, known as Securian Financial Services. The deal also covers Securian Trust Company. The seller's wealth business consists of more than 1,000 financial advisors managing $47.4 billion in client assets and $24.8 billion in advisory assets across 30 independent offices. 

Financial terms of the deal — which follows many transactions in recent years taking large insurance firms out of an industry increasingly known for tough regulations and low margins for them — were not disclosed. 

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In 2019, Cetera acquired the U.S. wealth business of Foresters Financial, and it picked up certain assets related to the independent financial planning channel of Voya Financial Advisors two years later. Securian's life insurance business spans $1.4 trillion in-force policies, but its wealth management arm has lost many of its largest financial advisor teams since 2019.

Besides the assets changing hands between Cetera and Securian, the two companies struck "a broad strategic partnership agreement" that includes a distribution deal for Cetera's advisors to sell Securian's individual life and annuity products, according to a press release. 

Cetera sees "untapped growth potential" for advisors set to join the 8,000-advisor firm from Securian under the deal, CEO Adam Antoniades said in a statement. 

"We have long admired Securian Financial's commitment to their managing partners, their powerful independent operating model and dedicated community of independent financial professionals," Antoniades said. "Our firms share several common values, including a purpose-driven, service-first mindset that is grounded in our mission to help financial professionals and financial institutions grow."

Last month, Securian sold its retirement recordkeeping business with $17 billion in 401(k) assets under administration to Standard Insurance Company for an undisclosed amount. Cetera pledged to offer employment in the future to Securian's management team and eligible staff members from its wealth and trust business following the expected close in the third quarter. 

"This transaction allows Securian Financial to increase our strategic focus and accelerate growth in our priority markets, while at the same time continue our commitment to the retail wealth business through our strategic partnership with Cetera," Securian CEO Chris Hilger said in a statement. "Cetera delivers on all important aspects of our acquisition partner selection criteria, including community focus, differentiating scale and industry-leading technology choice and product platforms." 

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Securian is the No. 15 independent brokerage on Financial Planning's annual IBD Elite ranking of the largest firms in the channel with $460.5 million in annual revenue. At the end of 2021, it listed 1,114 advisors and $53.2 billion in client assets. At least five of the branch managers the firm refers to as "managing partners" left Securian in 2022, adding on to the four it lost in the prior three years. The firm's ranks of managing partners have fallen to 30 independent offices mentioned in the press release from as many as 40 or 50 before the pandemic.

"I couldn't be happier with my timing," said one advisor who left the firm in the last few years but asked to be quoted anonymously out of fear of potential litigation or other reprisals from the firm. The advisor "saw the writing on the wall," they said, bringing up similar deals such as MassMutual's acquisition of MetLife's retail wealth arm in 2016 for $165 million.

"I have a few friends in the industry who have been around longer than I have. They said that they heard whispers of this as far back as two years ago," the advisor said. "It seemed like Securian was reading from the exact same playbook as MetLife over the last two years."

Incoming teams from Securian will technically join Cetera's largest brokerage, Cetera Advisor Networks, while taking on a new brand name as the Cetera Wealth Management Group. 

Cetera has about 8,000 financial advisors across four different brokerages, including an existing one that folded into Cetera Advisors last year, First Allied Securities. With annual revenue of $2.47 billion, Cetera is the No. 5 firm in the independent brokerage channel behind only Raymond James Financial Services, Advisor Group, Ameriprise and LPL Financial.