Cavner sets aside financial advisory career

When prominent Springfield financial adviser Nadia Cavner sold her company last month, she started to close a chapter of a career marked by grand achievement and, more recently, a felony conviction.

At the end of January, Cavner officially forfeited her ability to professionally manage investments as part of the sale of Nadia Cavner Group, according to the buyer’s representative and her long-time brokerage partner.

Cavner’s broker profile at FINRA.org indicates she is no longer licensed in the United States through the Financial Industry Regulatory Authority, which writes and enforces rules for advisers selling stocks and mutual funds.

On Jan. 14, Cavner sold the Nadia Cavner Group – the financial services firm she started in May – for an undisclosed amount to Overland Park, Kan.-based Lawing Financial Inc. According to a Lawing representative who spoke to Springfield Business Journal last month, the adviser will serve in a temporary role during the transition, but the firm had no plans to hire Cavner long-term.

Reached Feb. 3 at her office, 2620 E. Normandy St., Ste. 108, Cavner declined an interview and referred all questions to Lawing Financial spokesman Alex Greenwood of Alexander G Public Relations LLC.

“As part of the acquisition, she planned to give up her securities registration to devote more time for consulting to Lawing Financial and her personal philanthropic efforts,” Greenwood said via email. “We look forward to her being involved and engaged to help with the many client relationships that are part of this process. Our primary goal is to make this a seamless transition for our clients, and Nadia Cavner’s work as a consultant is vital.”

Cavner had 21 years of experience in the securities industry and was registered as an independent contractor/broker with Cambridge Investment Research Inc. the past eight years.

Cindy Schaus, vice president of public relations and creative marketing for Fairfield, Iowa-based Cambridge Investment, said the firm was aware of Cavner’s plans to give up her securities registration in the Lawing Financial deal.

The latest moves stem from Cavner’s April guilty plea in federal court for intentions to injure, harass or intimidate her college-age daughter’s ex-boyfriend Patrick McFarland. The following month, Cavner left BancorpSouth Inc. (NYSE: BXS), where she worked for eight years, and opened her own firm.

In August, Cavner was sentenced to five years of probation, six months of limited home detention and two years of community service. McFarland and his girlfriend have since sued Cavner in civil court, seeking at least $500,000 through 20 charges. The case, filed in October, is ongoing.

According to securities regulations, a felony conviction would statutorily disqualify Cavner from selling U.S. securities for a decade. However, financial advisers can appeal FINRA’s disqualifications and licenses are not pulled until an independent board conducts a full review. Three months ago, an anonymous source contacted SBJ and media partner KSPR with information that a hearing had been scheduled in the case on Nov. 7. Neither FINRA nor Cavner would confirm or deny a hearing had been held on the matter.

Had Cavner not dropped her licenses, the fate of the financial adviser’s ability to sell securities long-term would remain unclear.

FINRA spokeswoman Nancy Condon declined to comment on Cavner’s status beyond what was available on the organization’s Broker Check platform. She said details of any related decisions would be available at FINRA.org once they are reached. Michelle Ong, another FINRA spokeswoman, has said the proceedings of the regulatory body are not open to the public.

Greenwood also would not comment on the adviser’s hearing process beyond affirming FINRA’s disclosure that Cavner is no longer licensed.  

Stephen Evans, a certified financial planner and owner of Springfield-based Evans Wealth Planning LLC, said it’s possible Cavner’s appeal was not going well, and she decided to sell the company while it still had value.

“If she loses her license to sell securities, she doesn’t have those clients anymore,” Evans said. “She’d have nothing to sell. She may have seen the writing on the wall and it might have been time for her to say, ‘I’m not going to win this one.’”

It appears the adviser already had lost a significant chunk of her portfolio as word spread about the felony conviction. Prior to her guilty plea, Cavner had managed assets of roughly $490 million among some 1,100 households. In the sale of Nadia Cavner Group, Lawing Financial picked up $300 million in managed assets.

Evans said whether Cavner knew her company would be short-lived or believed she could win an appeal is left for speculation. Either way, by starting her own firm, she had a book of business to sell.

Cavner’s portfolio of investors was substantial.

Barron’s 2012 Top Advisor Rankings positions Cavner at No. 11 in Missouri and as the state’s top female adviser, noting her client’s typical net worth is $2 million. Franklin Templeton Investments had ranked Cavner No. 1 in the banking division worldwide for 11 years running through 2012.

With mutual funds, which Cavner sold via Franklin Templeton, annual management fees on assets, known as 12B-1 fees, can pile up fast even though they are a fraction of a percent of any fund’s total value, Evans said. Assuming Cavner’s $300 million in total assets were all subject to 12B-1 fees, he said Cavner could have earned roughly $750,000 a year on her existing portfolio.

“If she left all that money at (BancorpSouth), there’s nothing to sell. But if those clients were hers, she’s pulling a trail,” Evans said. “It’s a good amount of money.”

According to FINRA rules, Cavner must apply to reinstate her status for Series 7, 24 and 63 licenses that she’s held since the early- to mid-1990s. If she reapplied within two years, she wouldn’t have to retake the licensing exams.[[In-content Ad]]