Catherine Bonneau is excited about the future of Cetera Financial Institutions, the arm of Cetera that serves as the broker-dealer for bank programs. She outlined the opportunities and challenges for the broker-dealer that she heads in an exclusive interview with Bank Investment Consultant.
First and foremost, she is bullish because of new resources that will be available to her bank advisors as part of RCS's expanding empire. RCS surprised the industry in January by acquiring Cetera Financial Group for $1.15 billion.
The move was part of RCS Chief Executive Nicholas Schorsch's push into the advisory space. Subsequently, he also bought smaller broker dealers J.P. Turner, VSR Financial, Girard Securities and a 51% stake in Docupace Technologies, a web-based processing system.
Bonneau said that one of Cetera's current goals is to help bank advisors increase their share of wallet, noting that advisors usually have just half of a client's investable assets. That aligns with Schorsch's comments earlier this year to Financial Planning, a sister publication to Bank Investment Consultant. He said at the time that a rising economy, a wider range of products, not to mention newfound scale and smart branding, will help advisors achieve that goal.
Bonneau noted the biggest challenge facing the channel is creating public awareness that advisory services are available at banks. Indeed, 75% of banks don't offer a program at all (another challenge for the broker dealers) so for many potential clients, those services essentially don't exist at the local bank. On the plus side, Schorsch mentioned earlier this year that the mass affluent market, long the bread-and-butter of bank programs, will be a crucial segment for the company's growth.
The lure for banks, Bonneau said, is the fact that advisory services offer a source of non-interest income, a major concern in the post-crisis environment, she said.
SELF-CLEARING PLATFORM TO GET BETTER
As part of the changes at Cetera, it is planning to announce tomorrow an expansion of its relationship with Broadridge, a provider of investor communications and technology for wealth management firms.
Broadridge will offer a number improvements designed to streamline Cetera's self-clearing process. This recommitment to self-clearing will enable Cetera to provide enhanced reports to financial institutions that can be modified for a bank to look at its business in various way; for instance, by branch or by business line.
A major goal of all of Cetera's technology is to take as much work off the advisor's plate as possible, enabling them to have more meaningful meetings with clients and prospects, Bonneau said.