Atria To Acquire Grove Point From Kestra

Atria Announced Agreement To Acquire Grove Point From Kestra Holdings, Onboarding Grove Point’s 400 Professionals And $15 Billion In Assets Without Client Repapering

Atria Wealth Solutions announced a definitive agreement to acquire 100% of Grove Point Financial and its subsidiaries from Kestra Holdings in the second half of 2023, according to a press release issued by the firm earlier this week. Rockville, Maryland-based Grove Point was acquired by Kestra in 2017 and currently serves approximately 400 independent financial professionals with $15 billion in client assets.

Doug Ketterer, Atria’s CEO and Founding Partner, said, “Our combined organization will make us stronger as we continue to support and meet the ever-growing demands of financial professionals and their clients. What is of critical importance in any partnership is fit – both cultural and strategic. This is very much true of our new relationship with Grove Point – the cultures, priorities and philosophies of our firms could not be more aligned, and our ability to grow and deliver a differentiated experience has never been more certain.”

Atria Grows FA Headcount To 2,700 And AUA To $115 Billion

Atria’s subsidiaries include Cadaret Grant, NEXT Financial Group, Western International Securities, SCF Securities, CUSO Financial Services and Sorrento Pacific Financial. In the first quarter of 2023, Atria recruited two teams with over $220 million in assets to Cadaret Grant and appointed Kevin Mummau and Brian Bichler as Co-Heads of its Financial Institution channel, managing San Diego-based subsidiaries CUSO and Sorrento. Atria also brought aboard Bill Morrissey, former Divisional President at LPL Financial, late last year.

With the addition of Grove Point, Atria’s subsidiaries will serve almost 2,700 financial professionals with approximately $115 billion in assets under administration. As Grove Point maintains its existing clearing and custody support, no client repapering will be necessary.

Kestra’s CEO, James Poer, said, “As Grove Point embarks on this new chapter, our highest priority is to ensure the continuation of Grove Point’s success and for the firm to be best positioned for the future. Atria was the clear choice, and we are so very excited for Grove Point’s financial professionals, clients and employees with what lies ahead with Atria.”

Atria’s field-based practice management consultants, in-branch recruiting support and national and regional events will become accessible for Grove Point’s financial professionals. Atria invests aggressively in its platforms, client portal, practice management resources, marketing tools and support services, including virtual assistants.

What’s The Rationale?

Several third-party recruiters interviewed by WSR agreed that the transaction enhances both Atria and Kestra’s positioning with prospective financial advisor recruits, as well as each firm’s ability to focus on their respective growth strategies.

According to Jeff Nash, CEO of Bridgemark Strategies, a financial advisor recruiting consultancy, “This acquisition plays directly to Atria’s strengths. They’ve built a strong track record for acquiring small to midsize broker-dealer and corporate RIA firms. Even more importantly, they’ve proven their ability to build new enterprise technology and advisor growth platforms from the ground up, and then seamlessly integrate the firms they acquire into these platforms.”

Nash further notes that for Kestra, this was also a compelling transaction both strategically and financially, given that Kestra acquired Grove Point when it was known as H. Beck in 2017, when valuations for IBD firms of that size were at a relative low point.

Emphasizing that the broader Kestra Holdings organization has been moving increasingly upmarket with the size and quality of financial advisor businesses they support, Nash said, “By selling Grove Point, they’ll have more bandwidth for focusing on the rest of their entities, where there are many more shared synergies in the types of financial advisors they serve.”

Michael Terrana, CEO of Terrana Group, a financial advisor recruiting firm, agrees with this sentiment.

“Without question, Grove Point is a better strategic fit with Atria versus Kestra. In the current industry landscape, this transaction underscores how larger independent wealth management firms will seek to drive further growth by focusing on specific segments of financial advisors, versus trying to be all things to all advisors across the board.”

In a press release, Michelle Barry, President of Grove Point, said, “Atria’s substantial and ongoing investment in the business demonstrated to us its long-term commitment to providing the most comprehensive, competitive and innovative solutions in our industry and is precisely what we need for the next chapter of our firm.”

James Miller, Contributing Editor & Research Analyst at Wealth Solutions Report, can be reached at ContributingEd@wealthsolutionsreport.com.