February 28, 2024
Jason Diamond Quoted
By John Manganaro
Asked whether Cetera’s claim that its new “growth guarantee” is indeed an industry first, several advisory industry recruiters said that was more or less true, and they agreed the announcement was an interesting development in the fast-evolving world of financial advisor mergers and acquisitions. However, they are unsure whether the move will dramatically affect the firm’s recruiting success or result in many advisors making different affiliation decisions than they otherwise would have.
“The closest program I can think of is at Ameriprise,” said Jason Diamond, executive vice president and senior consultant at Diamond Consultants. “I don’t know that the Ameriprise group goes as far as explicitly guaranteeing a certain amount of growth, but their willingness to support incoming advisors is a big part of their secret sauce, in my view. They say something effectively similar about faster growth, and as with the Cetera announcement, they tie it back to the data that shows advisors grow faster and stronger post-affiliation.”
Diamond said he expects the new approach will resonate well, at least with some advisors seeking a new approach to affiliation.
“If you are an advisor who is worried about growth, or if you are specifically seeking faster growth as a key driver of your decisions about your affiliation model, this will clearly resonate,” Diamond said. “However, in my experience, there is a sizable swath of advisors — more than not — who are already in high-growth mode. They’ve been crushing it, thanks to the strength of the markets and for other reasons.”
Thus, Diamond said, the question is whether advisors who are already growing strongly will see such a guarantee as an important value-add coming from Cetera — let alone if it will prove determinative in their final affiliation decision. For his part, Diamond doesn’t see this as “a total game changer” with respect to advisor flows to Cetera, “because growth just isn’t such a big pain point you hear about.”
“Maybe this will be most attractive to those up-and-coming advisors with, say $500,000 to $1 million in revenue, who might need help turbo-charging growth to get to the next phase in their business,” Diamond said. “Will it attract that prestigious corner office team? I doubt it. Ultimately, I would say the guarantee is novel, and I personally think the concept is very valid. Cetera can say, ‘We know we help advisors grow, and we’re putting our money where our mouth is.’”
