HUB International’s Success in M&A and Organic Growth Highlights Trend of Specialized Firms’ Rapid Expansion in Wealth Management Industry
When insurance and consulting firm HUB International decided to expand its footprint in the wealth and retirement space, it committed fully and never looked back, hiring an industry veteran with over two decades of experience in the development and transformation of products and platforms as the COO of its Retirement & Private Wealth (RPW) division.
Adam Sokolic took the reins about three years ago, in March 2019, growing HUB’s RPW division from $9 billion in assets and 10 offices in 2018 to $142 billion and 60 offices in 2021.
Employing a dual approach of organic and M&A growth, Sokolic led over 35 acquisitions of retirement and wealth management firms in three years and currently oversees the development of an integrated retirement plan and private wealth platform, showcasing how specialized firms such as HUB leverage their strengths to expand aggressively in wealth management.
Sokolic’s background in consulting, strategy and operations at various firms prepared him to transform HUB’s RPW division, including his experience as Senior Vice President of Retirement Partners for LPL Financial, during which he led the creation and management of the LPL Financial Worksite Solutions program, a suite of services designed to address and assist employees’ financial wellness.
To understand the drivers behind HUB’s growth, we sat down with Sokolic to hear the details of his strategy.
WSR: What are the most important characteristics you search for when choosing an RIA to onboard?
Sokolic: Cultural fit is the most important characteristic we look for, and individuals and firm leaders who are focused on growth with an entrepreneurial mindset are key for us. We look for practices that have talented, next generation advisors and leaders in place and ready to ascend into a broader role within HUB.
Geography is also an important factor for us, as our focus is to expand into retirement and private wealth services for the existing HUB client base so that we can provide a more holistic and integrated benefit and insurance experience to our corporate and individual clients.
Talent. We will always find room for a firm that has a unique specialty or skill set that matches well with the existing HUB client base yet still aligns with our RPW focus. For example, our acquisition of Taylor Advisors and their focus in the banking segment, or TCG Advisors with their focus in the k-12 market.
WSR: How do your strategies differ between acquisitions of firms that focus more on retirement versus those that focus more on wealth management?
Sokolic: I do not want to speak for other firms. Our focus at HUB is on building the bridge between our retirement plan clients and the employees who participate in those plans and supporting those individuals with individual wealth management needs they may have outside of the workplace.
Our focus is on engaging with every individual and offering services and solutions that meet them where they are today, and work with them to support all of their planning needs, financial or otherwise.
We look for both retirement and private wealth firms that share that same vision and our passion for helping all Americans reach their financial goals.
WSR: How does being part of a large insurer like HUB affect your growth and acquisition strategies?
Sokolic: It allows our advisors to deliver a broader set of capabilities to support our clients’ needs which are related to but extend well beyond our core retirement and private wealth offering. Our ability to work with experts on the employee benefit, property & casualty and personal lines sides of our business truly allows us to bring the full value of HUB to our clients.
We focus on potential acquisitions who want to embrace this broader client solution strategy, and who want to have a deeper and broader relationship with their clients.
WSR: How do you typically augment the strategies of acquired firms to achieve maximum growth?
Sokolic: Each acquisition is viewed uniquely based on their current book of business, the needs of their clients along with the needs of the existing HUB clients in their area. After a detailed analysis of the two client bases, driven by our sales teams, a strategy is developed to achieve maximum growth for the acquired firm and their region and location.
In addition, we are very focused over the first 3-6 months during integration to transition any non-client facing activities away from the firms, so that our advisors and their teams focus on client engagement. We take things that can be automated like back-office functions and centralize them it where it makes sense to do so.
Also, administrative functions such as accounting, budgeting and human resource support are good examples of work that we transition. We believe the true value is in our advisors focusing on their clients.
Michael Madden, Contributing Editor & Research Analyst, can be reached at firstname.lastname@example.org