Advisor Group, Cetera Face Heavy Debt, Big Risks
January 13, 2021 by Jeff Berman
As ultra-low interest rates, a challenging economy and fee pressure weigh on the financial services industry, broker-dealers Advisor Group and Cetera Financial Group face magnified risks, according to credit ratings agencies and recruiter Jon Henschen, president of Henschen & Associates.
The heavy debt held by these two BDs, which are owned by private equity firms, limits their options in the event of a severe market downturn and constrains their ability to serve their advisors, Henschen says. The firms, for their part, say that they have strategies in place to manage their debt and that private equity ownership has its advantages.