Cetera Financial Group has recently made moves that appear to tighten the purse strings on pay for the home office staff and curb the growth of costs in the near future, according to three industry sources.
Cetera Financial, a network of five independent broker-dealers with 8,000 reps and advisers, recently told employees that it has put a freeze on merit pay increases for the next couple of years and reduced its 401(k) match to 1% of an employee’s annual salary, down from 4%, according to the sources, who asked not to be named because of the sensitivity of information regarding compensation.
It was not clear exactly when the changes in the ongoing and future compensation policies were announced, according to the sources.
A spokesperson for Cetera, Adriana Senior, did not return phone calls and emails on Thursday to comment.
In such cases at broker-dealers, advisers typically do not feel the impact from the compensation changes as they operate independent businesses and only use its services for brokerage and advisory transactions, record keeping and other back office support. It’s not clear how many employees of Cetera’s back office will feel an impact. The Cetera Financial website lists 1,700 employees.
Genstar Capital, a private equity manager that focuses on midsized companies, acquired Cetera in 2018 for $1.7 billion and financed a majority of the deal with the sale of $1 billion in below investment-grade debt, commonly known as junk bonds.