Independent Broker-Dealer Cetera to buy Avantax

  • It was announced yesterday that Cetera Financial Group is buying Avantax, formerly Blucora, in an all-cash transaction for $1.2 billion.
  • The acquisition adds NFS/Fidelity as a custodial partner for Cetera which allows them to establish a multi-custodial option to recruit additional advisors to.
  • Avantax has some 3,078 financial professionals focused on tax and wealth management, as well as nearly $83.8 billion in assets under administration and $42.6 billion in assets under management.
  • Cetera currently has more than 9,000 financial professionals with $341 billion in AUA and $121 billion in AUM.
  • The combined entity would include 12,075 financial professionals, $424.8 billion in AUA and $163.6 billion in AUM.

For the existing Avantax advisors, the good news is, this acquisition will bring no significant changes to their platform.  It has been reported that Avantax will remain a stand alone firm, they will keep NFS as their clearing firm and there will be no name change.  With so much consolidation happening in the marketplace, this is a best-case scenario for Avantax advisors.  With the news just being reported, it’s still too soon to know if retention bonuses will be provided to the existing advisors.  Typically, in acquisitions, the more change for advisors, the higher the bonus being offered will be.  For example, if an advisor has to repaper, rebrand or adapt to new technology, the acquiring firm will typically be more aggressive in essentially re-recruiting advisors to stay and they may have to make their retention packages come close to meeting market deals to win their business.  With the Cetera purchase of Avantax, we may see a different scenario play out.  With very little change approaching for the existing Avantax advisors, it’s most likely Cetera will not be inclined or need to offer lucrative packages to convince advisors to stay put. 

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