Deals & Recruiting Roundup: Focus, Cetera, Emigrant, Integrated Partners And More

Focus To Merge GW & Wade With The Colony Group. DeVoe On Looming Succession Crisis. Integrated Partners Brings On CoFi Advisors. Cetera’s ‘Growth Guarantee.’ Diamond Consultants’ Advisor Transition Report. LPL Partners With Wintrust. Emigrant Appoints Liz Nesvold As Chair. Diversify And Verdence Appoint New Executives.

This edition of the Deals & Recruiting Roundup covers Focus Financial agreeing to merge GW & Wade into The Colony Group, the DeVoe & Company Annual RIA M&A Outlook, Integrated Partners bringing on CoFi Advisors, Cetera launching a “Growth Guarantee” for newly affiliated advisors, Diamond Consultants releasing its latest Advisor Transition Report, LPL taking over support for approximately 85 advisors and $16 billion in assets from Wintrust, Liz Nesvold becoming Vice Chair of Emigrant Bank and Chair of Emigrant Partners, Diversify Advisor Network appointing Kevin Bendix as Chief Legal Officer, and Verdence Capital Advisors appointing Peter McGratty as a Director to lead its RIA and OCIO expansion.

Larry’s Take

Larry Roth, CEO, Wealth Solutions Report
Larry Roth, CEO, Wealth Solutions Report

I am writing this during (what is bound to be) a relatively brief calm in wealth management M&A deal flow. So I will take the moment to reflect upon insights from recent industry trend reports from Diamond Consultants, DeVoe & Company and ECHELON Partners. They point out the following.

Private equity has gradually become a major and enduring force in RIA M&A. Lofty RIA valuations have begun to impede deal flow, with even Raymond James CEO Paul Reilly echoing that point on an earnings call. Yet many advisors appear to be prioritizing acquisitions over organic growth, or selling before their firm’s organic growth plateaus. In my view, these issues will correct themselves as three things happen.

One, limited partners of PE funds will start demanding higher returns. Two, general partners of PE firms will start paying closer attention to the profitability of their acquisitions. And three, dealmakers will inevitably accept that organic growth is necessary in the long-term, in order for M&A deals to produce something greater than the sum of their parts.

If you would like to discuss this Larry’s Take further, including how these trends might impact your business, please contact me at larry.roth@rlrstrategicpartners.com.

Mergers & Acquisitions

1. Focus Financial To Merge GW & Wade Into The Colony Group

Michael Nathanson, CEO of The Colony Group and President, Focus
Michael Nathanson, CEO of The Colony Group and President, Focus

Focus Financial Partners agreed for Wellesley, Massachusetts-based GW & Wade to formally join fellow Focus partner firm The Colony Group. The transaction merges GW & Wade’s $10.4 billion in assets under management (AUM) with Colony’s $21.1 billion in AUM.

Led by Principals Roger Wade and Tim Pinch, GW & Wade joined Focus in 2007. It provides tax planning, financial planning, asset management, retirement and estate planning. After the merger, GW & Wade will operate as GW & Wade at The Colony Group. The deal marks Focus’ second signed intra-partnership merger as part of its hub strategy.

“It is important that we continually enhance our teams and services for our clients, and our view of the long-term future is bright as we welcome the GW & Wade team to Colony,” said Michael Nathanson, CEO of The Colony Group and President of Focus. “Over the years, Focus has become home to many outstanding wealth management firms, and it is exciting to see two of them joining forces.”

2. DeVoe: RIA Sellers Face Looming Succession Crisis

David DeVoe, CEO & Founder, DeVoe & Company
David DeVoe, CEO & Founder, DeVoe & Company

DeVoe & Company’s Annual RIA M&A Outlook found that a mere 18% of respondents believe their next generation of internal leaders can afford to buy out the owners, down from 29% in 2022, 38% in 2021 and 39% in 2020. The report attributes the decline to increasing RIA valuations, rising interest rates and procrastinating founders failing to develop and implement succession plans.

The report also found that, in 2023, 65% of RIAs respondents planned to acquire another firm within the next 24 months, up from 54% in 2022. Last year, 49% of respondents expected RIA valuations to remain steady over the next 12 months versus 36% in 2022, 16% expected higher valuations versus 8% in 2022, and 35% expected lower valuations versus 56% in 2022.

“Despite the shifting order of sellers’ priorities, Liquidity, Succession, Growth and Scale remain key drivers for the external sales of RIA firms,” according to the report. “Coupled with lack of affordability for NextGen advisors to buy out their firms’ founders, these factors seem destined to drive increasing external sales of RIAs over the next several years.”

Advisor Transactions

3. Integrated Partners Brings On New Hampshire-Based CoFi Advisors

Colin Walker, Co-Founder, CoFi Advisors
Colin Walker, Co-Founder, CoFi Advisors

Waltham, Massachusetts-based Integrated Partners, which serves over $17 billion in assets under advisement (AUA), brought on Portsmouth, New Hampshire-based CoFi Advisors, which has $185 million in AUM, as an affiliate partner. Integrated Partners added over $3 billion in assets in 2023.

Wheeler Crowley, Co-Founder, CoFi Advisors
Wheeler Crowley, Co-Founder, CoFi Advisors

CoFi was co-founded by financial advisors Colin Walker and Wheeler Crowley, and includes Shania Mulley, a registered client service associate and practice manager. Integrated Partners provides advisors with technology, investment management, advanced planning, a CPA partner program, custody, marketing, public relations, M&A, succession planning and business counsel.

“Joining Integrated allows us to grow our solution set, leveraging the firm’s dynamic technology and bespoke investment platform to provide an experience more tailored to our clients’ needs,” Crowley said. “While many advisors struggle to achieve organic growth, we’re confident that programs like Integrated’s CPA Alliance will help us unlock access to a broader set of prospective clients,” Walker said.

4. Cetera Launches ‘Growth Guarantee’ For Newly Affiliated Advisors

Adam Antoniades, CEO, Cetera Financial Group
Adam Antoniades, CEO, Cetera Financial Group

Cetera Financial Group launched the “Cetera Growth Guarantee,” which promises that newly affiliated financial advisors and institutions participating in the GrowthLine program, a component of the Growth360 suite of tools, will grow their assets under administration at least 38% faster or their affiliation fees will be refunded, based on certain stipulations.

GrowthLine is a customized and integrated growth plan that integrates data, segmentation, AI and technology, marketing strategy, planning and execution. Growth360 is a methodology to quickly assess an advisor’s business and identify growth opportunities. Cetera supported more than 12,000 financial professionals and their teams, overseeing more $475 billion in assets under administration and $190 billion in AUM, as of Dec. 20.

“Since the launch of our Growth360 program in 2021, Cetera has proven its ability to meaningfully grow advisor practices with tools and offerings that focus holistically on driving organic growth,” said Adam Antoniades, CEO of Cetera Financial Group. “Three years later, we are committed and confident in Cetera’s ability to help advisors grow their business faster than they would anywhere else in the industry.”

5. Diamond Consultants: More Experienced Advisors Changed Firms In 2023 Than 2022

Louis Diamond, President, Diamond Consultants
Louis Diamond, President, Diamond Consultants

Diamond Consultants, a wealth management recruiting and M&A business, released its latest Advisor Transition Report. It found that 9,674 experienced advisors with over three years of service changed firms in 2023, up 7.5% from 2022 when 9,006 such advisors changed firms. Although firms announce recruiting success based on headcount, firms actually value profitability based on client assets over advisor headcount, according to Diamond Consultants.

The report found that recruiting winners were Morgan Stanley in the wirehouse segment, with 445 advisors gained; Raymond James & Associates in the regional firm category, with 159 advisors gained; and LPL Financial in the independent segment, with 1,526 advisors gained. Diamond Consultants also predicts that private equity firms will show greater interest in wirehouse teams and become a disruptive force in recruiting trends.

“2023 was a year of contradictions in the wealth management industry. Many advisors enjoyed record success, which might suggest they would be loath to upset the status quo, yet advisor movement was up in most industry channels,” according to the report. “It’s very common these days for an advisor to change firms or models, or consider a merger or acquisition, at least in part to solve for succession. Succession challenges are becoming a driver of movement.”

Strategic Partnerships

6. LPL To Support 85 Advisors And $16 Billion From Wintrust, Recruits From Merrill

Christopher Cassidy, SVP, Head of Institution Business Development, LPL Financial
Christopher Cassidy, SVP, Head of Institution Business Development, LPL Financial

LPL Financial and Wintrust Financial agreed to transition support of the wealth management business of Wintrust Investments and certain private client business at Great Lakes Advisors, and their approximately 85 advisors and approximately $16 billion of brokerage and advisory assets to the LPL Institution Services platform. The transition is expected to be completed in early 2025, subject to regulatory approval.

LPL also helped James Debuque and Timothy Baltz launch Continuity Private Wealth through affiliation with LPL Strategic Wealth Services. The duo previously served approximately $1 billion in assets at Merrill Lynch. They are joined by Chief Operating Officer Wendy Fratrik, Client Relationship Manager Nicole Ferrara and Wealth Management Associate Lisa Baltz.

“Wintrust advisors offer deep expertise and exceptional personal attention to their clients, and we are pleased to work with Great Lakes Advisors to make their investment strategies more broadly available to the full LPL advisor ecosystem,” said Christopher Cassidy, SVP, Head of Institution Business Development at LPL Financial.

Promotions & People Moves

7. Liz Nesvold Named Emigrant Bank Vice Chair, Emigrant Partners Chair

Liz Nesvold, Vice Chair of Emigrant Bank and Chair, Emigrant Partners
Liz Nesvold, Vice Chair of Emigrant Bank and Chair, Emigrant Partners

Emigrant appointed industry veteran Liz Nesvold as Vice Chair of Emigrant Bank and Chair of Emigrant Partners. Nesvold has worked in the wealth management industry for more than 30 years as an advisor, investment banker and executive. The new Vice Chair role was created with the goal of accelerating the strategic growth of Emigrant’s diversified wealth platform.

Nesvold will work closely with all units of the bank that are engaged in, or provide solutions to, the firm’s wealth management business, including Emigrant Partners, New York Private Trust, Sarasota Private Trust and Cleveland Private Trust, as well as the company’s business divisions that serve the high net worth and ultra-high net worth markets, including Personal Risk Management Solutions and Summitas.

“As the wealth management industry becomes increasingly complex, now more than ever, leaders of wealth management firms need strategic partners who understand their businesses – especially the sanctity of the fiduciary duty owed to clients – and the opportunities ahead,” Nesvold said.

Kevin Bendix, Chief Legal Officer, Diversify Advisor Network
Kevin Bendix, Chief Legal Officer, Diversify Advisor Network

Sandy, Utah-based Diversify Advisor Network appointed Kevin Bendix to the newly created role of Chief Legal Officer, reporting to Co-Founder and CEO Ryan Smith. Bendix will focus on the firm’s legal, M&A and technology strategies. This includes creating a process to analyze, select and close organic, recruiting and M&A growth opportunities across the firm’s affiliation models. Bendix previously was a partner at the international law firm Kirkland & Ellis.

In January, Diversify Advisor Network launched Diversify Wealth Management, a W-2 employee-affiliation RIA that targets advisors who seek to monetize their practices and take equity alongside the founders. Diversify Wealth Management’s first acquisitions included the Utah-based firms Caliber Wealth Management, FirstPurpose Wealth and Diversify, Inc., which collectively oversee approximately $2.1 billion in assets.

“I joined Diversify for its vision of the future,” Bendix said. “The firm’s founders have a unique perspective on the business, being advisors themselves. They’ve created a boutique firm with multiple affiliation models that give advisors the flexibility, freedom and growth path to succeed in this evolving industry.”

9. Verdence Appoints Peter McGratty To Lead RIA And OCIO Expansion

Peter McGratty, Director, Verdence Capital Advisors
Peter McGratty, Director, Verdence Capital Advisors

Hunt Valley, Maryland-based Verdence Capital Advisors appointed Peter McGratty as a Director to lead RIA development and the expansion of the Verdence/OCIO platform, which allows outside advisors to access Verdence’s research platform, model delivery, marketing and alternative investments.

McGratty has over 30 years of financial experience. He previously served as Managing Director at Precursor Asset Management, as Founder and VP Strategic Partnerships at Pinnacle Advisor Solutions prior to its acquisition by Congress Wealth Management, as well as several other roles. Verdence had over $2.7 billion in AUM as of its November 2023 SEC ADV filing.

“Building, running and scaling a successful independent practice too often means that advisors are focusing their time and energy on everything but the one thing that matters most – the client,” McGratty said. “In learning about Verdence/OCIO, it quickly became obvious to me that Verdence has built something very special, and I could not be more excited to be joining the team as we take the very concept of OCIO to the next level in 2024 and beyond.”

Chris Latham, Managing Editor at Wealth Solutions Report, can be reached at clatham@wealthsolutionsreport.com

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