Ratings Agency Displays Cautious Outlook for Financial Services Sector
A ratings action taken by credit rating agency Moody’s Investors Service has affirmed the B3 corporate family rating (CFR) for Aretec, Cetera’s parent company. Moody’s said Aretec’s stabilizing financial advisor base and growth strategy focused on advisor recruiting helped support its CFR.
In consideration of the potential for widespread and broad economic implications due to the current Covid-19 pandemic, Moody’s is taking a cautious view of the financial services sector, downgrading its outlook for several firms, including that of Aretec. Moody’s said the challenging macroeconomic environment will weigh on the firm’s revenue and has revised the outlook for Aretec to negative.
Jeff Buchheister, chief financial officer of Cetera, said, “The rating affirmation by Moodys reflects the confidence that the agency has in Cetera’s organic growth strategy and the strength of our private equity owners, Genstar. Market volatility and the Federal Reserve Board’s cut to the federal funds target rate impacts a large part of financial services industry like banking and brokerage that rely on interest income as part of their revenue profiles. We understand that the shift to a negative outlook is a conservative decision to flag that there is greater risk in the sector than there was before. We are working closely with Moody’s to communicate the mitigating expense measures and revenue strategies that we are putting in place to offset deteriorating market conditions.”
Adam Antoniades, chief executive officer of Cetera, said, “First and foremost our focus right now is on our advisors and institutions and helping them navigate the impact of a global pandemic that is unprecedented in our time. From expanding service capacity, to offering regular online training sessions for advisors, hosting advisor peer-to-peer exchange of ideas, and the rapid rollout of facilitating technologies, everyone at Cetera is working tirelessly to support our network of financial professionals. We’ve proven our ability to emerge from volatile markets in a position of strength, and I am confident that with our private equity owners, leadership team and network of affiliated financial professionals we will do so again.”
About Cetera Financial Group®
Cetera Financial Group (Cetera) is a leading financial advice firm. It empowers the delivery of an Advice-Centric Experience® to individuals, families and businesses across the country through independent financial advisors as well as trusted tax professionals and banks and credit unions. It’s headquartered at 200 N. Pacific Coast Highway, Suite 1200 El Segundo, CA 90245-5670.
Comprehensive services include: wealth management solutions, retirement plan solutions, advisory services, practice management support, innovative technology, marketing guidance, regulatory support, and market research.
"Cetera Financial Group" refers to the network of independent retail firms encompassing, among others, Cetera Advisors LLC, Cetera Advisor Networks LLC, Cetera Investment Services LLC (marketed as Cetera Financial Institutions or Cetera Investors), Cetera Financial Specialists LLC, and First Allied Securities, Inc. All firms are members FINRA / SIPC.
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