Wealth Solutions Report’s Post

This week, Wealth Solutions Report covers no less than nine acquisitions representing over $5.5 billion in combined assets. This diversity of M&A is a good sign for the industry, because it demonstrates that RIAs of all types are pursuing – and achieving – scale while finding deal partners that align with their strategic goals. #wealthmanagement #mergersandacquisitions #financialadvisors

Brand reputation is a greatly underestimated factor for a wealth management firm, in large part because it’s difficult to quantify in the same way as advisor headcount, asset levels, geographic footprints and profit margins. But major M&A deals and recruitments have come down to which brand is more highly regarded in the industry. The inverse is also true. If a firm tarnishes its brand reputation bad enough, that can scare off talent, clients and potential deal partners. Even private equity firms may think twice about injecting capital into an RIA or IBD that’s embroiled in a headline-grabbing scandal. Some issues, whether they are regulatory actions or civil lawsuits, may be too damning to risk being associated with. This is why it is so crucial to work with the right people, and to conduct thorough due diligence on them before getting involved. That guidance applies to firm leaders who are bringing people into their organizations, as well as to financial professionals who are considering doing business with those organizations. #wealthsolutionsreport #financialadvisors #wealthmanagement

The RIA M&A space continues to buzz with significant activity across the board. Joe Duran’s Rise Growth Partners hired Jennifer Geoghegan as Chief Marketing Officer and Tony Ling as Managing Partner – Investments. Rush Benton, the former Head of Wealth Management M&A at CAPTRUST, launched the boutique RIA investment bank Gorman Jones. It is likely that the growing supply of RIA M&A shops, led by longtime industry leaders who could work elsewhere if they wanted, reflects well-founded optimism about the ongoing demand for such services. In other words, the dealmaking pipeline appears to be quite strong for the foreseeable future, as shown by industry data from established RIA M&A shops such as DeVoe & Company, ECHELON Partners and Berkshire Global Advisors. Competition breeds innovation. It also motivates M&A experts to maintain excellence of execution, and continue providing insightful guidance on how to generate optimal results from deal processes. That’s a net positive for RIA leaders, and their advisors. #mergers #acquisitions #wealthmanagement

Family offices have long been an esoteric niche of wealth management due to the relatively small number of ultra-high net worth families in existence and the tendency for family offices to maintain near-total silence with the media due to client confidentiality. A rising perception in our industry is that offering family office services can enhance a firm’s competitive positioning. This perception has pushed them into the limelight, leading to increased interest by acquirers and major capital investors, as well as new firms proclaiming family office expertise and established firms launching family office subsidiaries. The perception may prove true for firms that actually provide superior family office services compared to rivals, but the term “family office” must retain real meaning rather than being diluted. #wealthmanagement #financialadvisors #familyoffices

When a larger firm facilitates the merger of two smaller firms, this can achieve multiple goals. The smaller firms can achieve scale, complementary capabilities and better brand awareness. The larger firm can demonstrate its value-add to those smaller firms, as well as attract other firms not yet in its ecosystem that are open to mergers. The process has occurred in a few different forms recently. Today’s roundup covers Bluespring Wealth Partners’s merger of Retirement Wealth Specialists and Security Financial Management. In February, we covered Merchant Investment Management-backed Trivium Point Advisory merging with Paradigm Financial Partners and Lyons & Lyons, CPAs. The same month, we covered Aztec Software acquiring Financial Fitness Group and merging it with Aztec’s iGrad financial literacy platform. The trend also points to the benefits of allowing affiliates, minority-stake investment partners and wholly-owned subsidiaries to maintain a certain amount of autonomy. Doing so can help retain key personnel at the smaller firms, and generate new ideas on how to grow the business. #mergersandacquisitions #financialadvisors #wealthmanagement

According to Constellation Wealth Capital’s website, there is approximately $7 trillion in assets under management (AUM) across nearly 18,000 RIAs in the U.S., a 19% five-year AUM compound annual growth rate (CAGR) for $5 billion-plus AUM firms, and a projected two-times increase in $1 billion-plus RIAs over the next five years. According to the Schwab Advisor Services 2024 Supported Independence Study, the current median AUM of advisors who recently went independent is $278 million, and they expect to oversee $396 million over the next five years. Among advisors considering going independent, the median initial AUM they expect is $176 million, and then $297 million five years later. So there is still a huge opportunity for direct investments by private equity firms in larger RIAs, and a huge need among younger RIAs to achieve scale. In addition to organic growth, support for the latter is likely to come from aggregators and affiliation networks. As multi-billion-dollar RIAs proliferate, external capital infusions also may become more common for smaller RIAs. #wealthmanagement #financialadvisors #acquisitions #recruitment

ACQUIRED: Corient, the U.S. wealth management arm of Canadian asset manager CI Financial, has acquired #Charlotte-based Byron Financial, LLC. which oversees nearly $1.1 billion in assets under management. The acquisition, finalized on July 31, is part of Corient's ongoing expansion efforts. CI Financial disclosed the purchase in its August 8 earnings report, which also revealed the company's record total assets of almost $500 billion in the second quarter. This figure represents an increase of $81 billion, or about 20%, compared to the same period last year. Nearly half of CI Financial's assets stem from its aggressive acquisition strategy in the U.S., where it has bought close to 40 registered investment advisors since 2019. Byron Financial, headquartered in Charlotte, N.C., is a private wealth management firm that provides comprehensive financial services to high-net-worth individuals. Of its total assets under management, approximately $13 million is managed on a discretionary basis.

The industry moves of the past week have been momentous, to put it mildly. More than a dozen firms participated in M&A deals, and two of the most prominent CEOs in the independent wealth management space were revealed to be exiting firms that reached new heights during their tenures. Rather than fixate on any one event, let us consider the bigger picture. Last week’s burst of M&A activity demonstrates the enormous financial incentives that RIA owners of all sizes have to either scale up, or sell to firms that are in the process of doing so. It is not exactly difficult for well-managed small and midsized RIAs to stay in business, given the stickiness of long-term client relationships. But the reasons for many such owners to retain full control, instead of seeking out deal partners, are increasingly subjective instead of objective. Change of management is inevitable. It is only a matter of when, why and how. That also applies to CEOs of large, publicly traded financial services companies. Whether they leave successfully on their own terms, or are told to go amid negative circumstances, the firm owes it to the professionals and clients who remain to provide a strategy for renewed growth. #wealthmanagement #financialadvisors #wealthsolutionsreport

The RIA space continues to experience significant consolidation, with a series of high-profile M&As making headlines in July, according to Citywire RIA. Here’s a look at some of the most notable moves ⤵ 𝟭. 𝗖𝗲𝗿𝗶𝘁𝘆 𝗣𝗮𝗿𝘁𝗻𝗲𝗿𝘀 𝗔𝗰𝗾𝘂𝗶𝗿𝗲𝘀 $𝟮𝟬𝟮𝗠 𝗗𝗲𝗻𝘃𝗲𝗿 𝗥𝗜𝗔 Cerity Partners expanded its reach westward by merging with Keating Wealth Management. Tim Keating's firm, managing $202 million in client assets, joined the New York-based mega-RIA, adding significant expertise and market presence. 𝟮. 𝗪𝗘𝗚 𝗔𝗰𝗾𝘂𝗶𝗿𝗲𝘀 𝗧𝘄𝗼 𝗥𝗜𝗔𝘀 𝗶𝗻 𝗠𝗮𝘀𝘀𝗮𝗰𝗵𝘂𝘀𝗲𝘁𝘁𝘀 𝗮𝗻𝗱 𝗧𝗲𝘅𝗮𝘀 Wealth Enhancement Group (WEG) continues its aggressive expansion with two significant acquisitions. WEG purchased Peak Financial Services, Inc. in Northborough, MA, adding $123 million in client assets under the leadership of founder and president Kevin M. O'Brien, CFP® Wealth Management. In Texas, WEG also acquired Starfox Financial Services, based in The Woodlands, with $254 million in client assets, co-owned by founder Jose Palafox and advisor Bill Friebel, CFP®. These strategic moves push WEG's total assets to $85.4 billion, with expanded presence in both Massachusetts and Texas. 𝟯. 𝗖𝗼𝗹𝗱𝘀𝘁𝗿𝗲𝗮𝗺 𝗛𝗶𝘁𝘀 $𝟭𝟬𝗕 𝗔𝗳𝘁𝗲𝗿 𝗠𝗲𝗿𝗴𝗶𝗻𝗴 𝘄𝗶𝘁𝗵 𝗢𝗿𝗲𝗴𝗼𝗻 𝗥𝗜𝗔 Coldstream Wealth Management made headlines with its merger with Arnerich Massena, Inc, a Portland-based RIA managing $2 billion in assets. This deal pushes Coldstream's total AUM to $10 billion. Co-chief executives Reegan Rae, CPWA® and Bryan Shipley, CFA, CAIA led Arnerich Massena and will now bring their expertise to Coldstream. 𝟰. 𝗞𝗼𝘃𝗶𝘁𝘇 𝗕𝘂𝘆𝘀 $𝟮.𝟲𝗕 𝗙𝗼𝗰𝘂𝘀 𝗥𝗜𝗔 𝗥𝗲𝗹𝗮𝘁𝗶𝘃𝗲 𝗩𝗮𝗹𝘂𝗲 𝗣𝗮𝗿𝘁𝗻𝗲𝗿𝘀 Kovitz Investment Group, a Focus Financial Partners affiliate, acquired Relative Value Partners, LLC in Northbrook, IL. This acquisition adds $2.6 billion in client assets, bringing Kovitz’s total AUM to approximately $24 billion. The leadership team at Relative Value Partners includes chief executive Bob Huffman, who has expressed enthusiasm for the combined capabilities of the firms. 𝟱. 𝗘𝗣 𝗪𝗲𝗮𝗹𝘁𝗵 𝗕𝘂𝘆𝘀 $𝟳𝟬𝟬𝗠 𝗗𝗮𝗹𝗹𝗮𝘀 𝗥𝗜𝗔 EP Wealth Advisors expanded its footprint in the Dallas-Fort Worth metroplex by acquiring Sloan Investment Management, managing $700 million in client assets. Led by managing partner Frank Sloan, this acquisition marks EP’s third RIA purchase in 2024, pushing its total AUM in the Dallas area to over $1 billion. Frank Sloan and his team bring their proprietary investment methodologies to EP Wealth, promising innovative approaches to client asset management. As firms seek to expand their market presence and enhance their service offerings, we can expect to see more strategic acquisitions in the months ahead. Winthrop & Co. 💡 #WealthManagement #MergersAndAcquisitions #RIA #FinancialAdvisors #InvestmentManagement

"Mercer Global Advisors, Inc. (“Mercer Advisors”), a national Registered Investment Adviser (RIA), today announced the acquisition of Waypoint Capital Advisors, LLC (“Waypoint”), an investment advisory and financial planning firm that manages nearly $1 billion in client assets for ultra-high-net-worth (“UHNW”) individuals and families." #PrivateWealth #WealthManagement #RealAssets #PrivateMarkets #AlternativeInvestments #Alts #UHNW #HNW #FamilyOffices #IBD #RIA #PrivateInvestments #PrivateCredit #PrivateEquity #RealEstate