Exploring Account Fees and Bonuses: Highlights from Cetera and Avantax Webinar

Posted on October 24th, 2023 at 1:27 PM
Exploring Account Fees and Bonuses: Highlights from Cetera and Avantax Webinar

From the desk of Jim Eccleston at Eccleston Law 

Cetera Financial Holdings senior management hosted an online seminar with Avantax Inc.'s financial advisors to address concerns raised by 3,100 advisors following Cetera's announcement earlier this month that it is acquiring the tax-specialized broker-dealer for $1.2 billion.

Avantax financial advisors likely inquired about the fate of an unpopular $60 annual fee implemented three years ago for advisers' accounts at outside money managers. This fee, known as," direct to fund," (DTF) among advisers, was a method for selling mutual funds directly to clients. Additionally, discussions were expected concerning the clearing firm currently used by Avantax Investment Services Inc., which presently clears trades through Fidelity's National Financial Services, while Cetera utilizes Pershing.

Another potential topic included the distribution of bonuses, referred to as, "transition assistance," in the industry, to Avantax financial advisors. These bonuses are customary in broker-dealer acquisitions to retain advisors and their client base. Questions concerning the bonus may arise because not all advisors are eligible for such bonuses, as clarified in Cetera's September 11th SEC filing announcing the Avantax acquisition. Cetera stated that they would provide transition assistance to certain firms as deemed appropriate, and the allocation of assistance would be at their discretion. Detailed information on this matter will be communicated separately in the coming weeks, as InvestmentNews reports.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

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