This edition of Transitions, Transactions & Promotions covers some of the major broker-dealer and multichannel wealth management firms reporting their full-year 2022 recruitment and M&A gains. We also recap three recent recruitment and M&A deals each, Goldman Sachs providing custody services for a newly launched RIA and the appointment of former Ladenburg Thalmann COO Adam Malamed as CEO of Sanctuary Wealth. Here are the details:
1. Broker-Dealers Announce Full-Year 2022 Recruitment And M&A Gains
Several major independent broker-dealers and multichannel wealth management firms reported their full-year 2022 gains in new client assets and experienced financial advisors who came through M&A and/or recruitments.
Why it matters: LPL Financial reported recruited assets of $82 billion and headcount growth of 1,399 advisors. Advisor Group reported adding $84.2 billion along with more than 1,800 advisors. Cetera Financial Group reported recruited assets of over $13 billion, without supplying total advisor gains. Commonwealth Financial Network reported adding $11.24 billion across 270 advisors.
Kestra Financial reported recruiting $8.5 billion and 80 financial professionals. Stifel Independent Advisors reported onboarding 23 advisors with over $2.53 billion in assets. Wealthcare reported adding 16 advisor groups and $941 million in assets under management (AUM).
Raymond James did not specifically break out 2022 full-year recruitment or M&A gains, instead reporting that its net new assets for the Private Client Group increased by $82.1 billion and that PCG added 235 financial advisors to the total headcount.
Temple, Texas-based Cedarwood Financial Partners joined Commonwealth Financial Network after departing Edward Jones. The nine-person team, which provides advanced financial planning services to individuals and businesses, oversees nearly $1 billion in client assets.
Why it matters: This large deal was announced in the second week of January, indicating that Commonwealth – which has approximately 2,100 total advisors and $243 billion in client assets – aims to keep its recruiting momentum going strong. Meanwhile, Edward Jones may be facing pressures on its employee channel that are similar to those that have long plagued wirehouses.
“We knew we wanted to own our own business. Once we saw that we could have the freedom and the exceptional back-office support in one, we couldn’t unsee it,” Dylan Ripley, Managing Partner at Cedarwood, said in the press release. “From access to more investment options and integrated technology to control over how we serve our clients and charge for those services, Commonwealth was the obvious choice.”
Linwood, New Jersey-based Anchor Financial joined Raymond James from UBS. The women-led team includes advisors Jeanne Eisele, Mary Gilbert and Leanne Gray, who oversee nearly $435 million in client assets. Their team also includes client service associate Sarahjane Hehre and branch operations coordinator Bonnie Hehre.
Why it matters: Raymond James has made significant steps to increase its number of women advisors and to support their success. The company has a Women Financial Advisors Network of more than 1,300 members, a Women’s Advisory Council and its 29th annual Women’s Symposium is scheduled to occur Sept. 27-29 in Grande Lakes, Florida.
“We were ready to establish a family-style, private office while simultaneously leveraging the resources that Raymond James provides to create the perfect blend of the flexibility of independence with the power, backing and oversight of the home company,” Eisele said in the press release.
Atria Wealth Solutions recruited Marshall Wealth Management Group and Cypress Private Wealth from LPL Financial. The firms, which collectively bring over $220 million in client assets, will affiliate with Atria’s Cadaret Grant subsidiary and increase the company’s presence with offices in Los Gatos, Pasadena and San Jose, California.
Why it matters: These deals, announced Feb. 8, demonstrate that Atria is on a roll. Just a week before, its subsidiary CUSO Financial Services (CFS) announced a partnership with Kemba Credit Union, which operates 12 branches in the greater Cincinnati area and serves more than 125,000 members overseeing nearly $1.6 billion in assets. Atria’s six broker-dealer subsidiaries collectively serve nearly 2,500 financial professionals overseeing more than $100 billion of assets under administration (AUA).
“We are pleased to welcome Brad, Dominick and their teams to Atria and Cadaret Grant,” Kevin Beard, Atria’s Chief Growth Officer and Founding Partner, said in the press release. “Our robust support tools, award-winning technology and deeply engrained service culture will also position them to grow organically by expanding their ability to offer highly-tailored and personalized client support.”
To learn more, view the press releases here and here.
Mergers & Acquisitions
5. Sequoia Financial Group To Acquire $5 Billion Zeke Capital Advisors
Akron, Ohio-based Sequoia Financial Group, a team of more than 180 people with over $10 billion in assets, announced plans to acquire Berwyn, Pennsylvania-based Zeke Capital Advisors, whose team of 28 people has over $5 billion in AUM and AUA, forming a $15 billion firm. The deal is expected to close on Feb. 28.
Why it matters: Fund manager Edward Antoian founded Zeke, a multifamily office, in 2008. Sequoia provides asset management, financial planning, estate and retirement planning services to individuals, families and family offices. In October, Sequoia secured a $200 million minority stake commitment from the private equity firm Valeas Capital Partners to support Sequoia’s growth strategy.
“After a thorough search for the right partner, Sequoia emerged as the ideal firm to support Zeke’s mission of serving multigenerational families,” Antoian said in the press release. “Joining Sequoia’s successful Family Wealth practice will help ensure our clients will be in great hands for generations to come.”
Cetera Financial Group entered into a definitive agreement to acquire Securian Financial Group’s retail wealth business. The deal includes more than 1,000 financial professionals across more than 30 independent firms, representing $47.4 billion in AUA and $24.8 billion in AUM. They will join as the Cetera Wealth Management Group and operate within Cetera Advisor Networks.
Why it matters: Deals of this size point to the resilience of M&A in the independent space, despite broader macroeconomic and financial market headwinds putting downward pressure on seller valuations. Two weeks after this announcement, Cetera also announced a minority investment in Overland Park, Kansas-based Prosperity Advisors. Paul Ewing runs that company and the Prosperity Network of Advisors, a super-OSJ for Cetera Advisors with more than 170 members and approximately $1.7 billion in assets.
“Our Wealth Hub, which uniquely brings choice and flexibility to our financial professionals as well as best-in-class growth capabilities, is complementary and synergistic to Securian Financial’s operating model, and we envision untapped growth potential for the independent financial professionals joining the Cetera network,” Cetera CEO Adam Antoniades said in the press release.
Charles Schwab acquired The Family Wealth Alliance (FWA), a membership organization founded in 2003 whose firms have more than 20,000 employees and serve more than 25,000 households in North America. FWA member firms collectively oversee approximately $500 billion in client assets, according to Financial Advisor IQ and Think Advisor.
Why it matters: As a wealth management firm and custodian, Schwab may appear to be playing outside of its comfort zone with this deal – but it actually enables Schwab to expand its services for lucrative fields. FWA firms include multifamily offices, external CIOs, prominent wealth management firms, single family offices, as well as family office practices of private banks and law and CPA firms.
Schwab Advisor Services and FWA will leverage industrywide relationships, thought leadership and technology to support ultra-high net worth financial professionals and their organizations.
“Joining Schwab opens an exciting new chapter for FWA at a time when the industry is not just growing, but also evolving as new generations of private wealth and the emerging talent who serve them come to the fore,” Tom Livergood, FWA Founder and CEO, said in the press release. “We look forward to expanding the resources and services we can provide and to maintaining a vibrant community for decades to come.”
United Advisor Group (UAG), which recently formed an independent RIA, selected Goldman Sachs Advisor Solutions (GSAS) to provide custody services. The initial advisors will join throughout the year, though most are expected to join by the end of the second quarter, bringing UAG’s total AUM to $750 million. By the end of the year, it expects to reach $1 billion in AUM.
Why it matters: UAG’s single-tier partnership model is designed to allow each partner or firm within it to grow autonomously and collaborate with like-minded advisors, while leveraging the group for improved pricing and increased access to products and solutions, including a brokerage arrangement with Silver Oak Securities.
GSAS’ selection as custodian for UAG follows October’s announcement that a $1 billion breakaway from Merrill Lynch, Beverly Hills Private Wealth, also chose the firm to provide custody services.
“Goldman Sachs Advisor Solutions furthers our ability to carry out our mission to give midsized, well-run practices access to resources that would otherwise be out of reach,” Ray Gettins, Director of United Advisor Group, said in the press release. “It’s truly unique; we can aggregate and consolidate services while still allowing these advisors to remain independent and maintain their established brand.”
RIA aggregator and financial advisor consolidator Sanctuary Wealth appointed Adam Malamed as its new Chief Executive Officer, replacing Jim Dickson in the role. Malamed, a widely recognized wealth management industry leader who shot to prominence as one of the primary architects of Ladenburg Thalmann’s growth and eventual sale to Advisor Group, was brought aboard to drive Sanctuary Wealth’s future growth, according to a press release.
Why it matters: Indianapolis-based Sanctuary fosters an ecosystem of “partnered independence” whereby it buys a minority stake in advisor practices in return for access to the services of various Sanctuary subsidiaries. These include an RIA, broker-dealer, asset management and an insurance solutions provider. Sanctuary has approximately $30 billion in client assets managed by 300-plus advisors in more than 75 partner firms across 28 states.
“I am a big believer in taking the best elements of a firm’s culture and aligning it with corporate strategies and scalable solutions that consistently elevate the financial advisor and client service experience,” Malamed said in a statement. “This is precisely what we will achieve together at Sanctuary going forward.”