Account fees, bonuses likely topics at Thursday’s Cetera, Avantax confab

investmentnews.com:

Cetera Financial Holdings senior management is planning a webinar Thursday afternoon with Avantax Inc.’s financial advisors to discuss questions raised by some of the 3,100 advisors in the wake of Cetera’s announcement earlier this month that it’s buying the tax-specialized broker-dealer for $1.2 billion.

The advisors have plenty of questions for Cetera’s leaders Mike Durbin and Adam Antoniades, who will be on the 1 p.m. CDT call, according to one Avantax insider, who spoke confidentially. The top question for Avantax financial advisors could very well be the fate of a highly unpopular charge instituted three years ago against some clients.

At that time, Avantax management levied a $60 annual fee for advisers’ accounts at outside money managers, a popular way for advisers to conduct business directly with mutual fund companies like American Funds. Called direct to fund, or DTF, by advisers, the method is a simple way for advisers to sell mutual funds to clients. 

Another issue likely to be raised is the status of the clearing firm used by Avantax Investment Services Inc., the broker-dealer, which currently clears trades with Fidelity’s National Financial Services. Cetera uses Pershing.

One more item likely to be talked about will be which Avantax financial advisors will get bonuses, known as “transition assistance” in industry parlance. Such bonuses are typical in broker-dealer acquisitions as a way to hang onto advisors — and their clients.

“Advisors are getting inundated with offers from other companies,” the Avantax insider said. “There’s chum in the water and everyone is chasing them down.”

Notice of the meeting was filed Tuesday with the Securities and Exchange Commission but details were only released