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Cetera retention bonuses being rolled out

Are the Cetera retention packages enough to keep advisors in their seats?

In a recent article in InvestmentNews Jodie Papike is quoted discussing the Cetera retention packages that are currently being rolled out to existing advisors at Cetera. In total, ten broker dealers are included under the current Cetera ownership. These ten broker dealers represent just over 9,000 advisors.

One industry recruiter, Jodie Papike, said she had spoken with a Cetera adviser who generates $750,000 in total revenues, and he was offered a bonus of 6%, or $45,000, in the form of a five-year note.  Cetera advisers should be prepared to be disappointed, she said. “It was way less than what he expected,” said Ms. Papike, executive vice president of Cross-Search.

The Cetera retention money being offered to reps is based on a combination of factors including gross dealer concessions, regulatory history, outstanding loans and profitability to the firm. Many advisors under these parameters will be surprised to find out they will not be offered retention money.

The bigger question advisors are asking at this point is beyond how much capital they will receive to stay. Advisors want to know the future of their current broker dealer.

Meanwhile, Cetera advisers have plenty of questions regardless of the amount they may get in a stay bonus, Ms. Papike noted. “What will their firm look like in one to three years?” she asked. “Will they all be consolidated together or will they remain separate? If an adviser is offered a five-year note, is he comfortable with the direction of Cetera?”

These questions along with many others are waiting to be answered. The good news for reps is that they don’t have to move their business to get the capital. Reps considering taking the money should plan to keep it or at least be prepared to repay the money should things change and they find themselves needing to move to a new broker dealer.


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