Wealth Enhancement Group, a $11.three billion wealth supervisor increasing all through the nation, stated Thursday it acquired a agency with over a billion in consumer property.
Personal equity-backed Wealth Enhancement Group agreed to purchase Baltimore-based Planning Options Group, an unbiased, hybrid registered funding advisor and dealer/vendor with $1.three billion in property. The acquisition was the twelfth deal Wealth Enhancement Group has performed for the reason that finish 2013. Phrases of the deal, anticipated to shut Aug. 1, weren't disclosed.
Planning Options Group will turn into the wealth supervisor's first workplace within the Baltimore and Washington D.C. space, because it continues a deliberate growth on the East Coast and works towards its said aim of establishing a nationwide model. Planning Options Group, which additionally has an workplace in Virginia Seashore, has 15 advisors.
"They've had nice success, and we are going to assist them take that progress to new ranges with our collaborative method to monetary planning, portfolio administration and back-office operations,” Wealth Enhancement Group CEO Jeff Dekko stated in an announcement.
Along with new property by means of acquisitions, Wealth Enhancement Group's advisors have organically grown by over $1 billion in 2017 and 2018, respectively, the corporate stated.
Like different wealth managers looking for the advantages of scale, Wealth Enhancement Group sought capital to assist it purchase different companies and develop its income. In 2015, Lightyear Capital, a non-public fairness agency that focuses on monetary companies firms, purchased the RIA and has helped it do a dozen offers in half as many years. That may be a feverish tempo in comparison with the majority of different RIAs, even in a frantic M&A setting for wealth managers.
Nonetheless, only a handful of prolific consumers proceed to push deal quantity within the wealth administration business to new highs. Barring a cataclysmic occasion, Carolyn Armitage, managing director at Echelon Companions, stated the funding financial institution expects 2019 to be "one other blockbuster 12 months."
However not all capital fueling wealth administration mergers and acquisitions will be equal, in accordance with a prime consolidator.
Rajini Kodialam, the co-founder and chief working officer of publically traded Focus Monetary, additionally an acquirer of RIA companies, warned RIAs towards taking cash from personal fairness, as a result of the pursuits between homeowners and advisors, to not point out shoppers, are sometimes not aligned.
Out of the 49 offers involving RIAs within the first quarter of this 12 months, the very best quantity in any three-month interval since 2013, in accordance with Echelon Companions, Focus Monetary Companions accounted for 11 of them. It presently has stakes in 62 unbiased RIAs, which it supplies supporting capital and companies to in trade for a part of their income, however that may be a minuscule portion of the market, Focus executives stated on the Capital Markets Monetary Expertise Convention on Thursday. Focus says there are 1,000 RIAs it may well doubtlessly associate with, and thru them, one other 5,000 potential mergers or acquisitions.
As profitable as Focus has been at consolidating RIAs, some within the business assume wealth managers ought to pause earlier than promoting fairness to lift capital. Earlier this week, Dynasty Monetary Companions stated it might start a forgivable notice program for so-called breakaway advisors leaving b/ds. However in contrast to at a wirehouse, the advisor isn't an worker of Dynasty, and as soon as the notice expires, they revert to proudly owning 100% of their profitability.
Constancy Clearing & Custody Options additionally lately stated it might start providing discounted personal loans to RIAs in want of capital by means of Service provider Funding Administration, a lender and repair supplier to cash administration companies.
Neither Wealth Enhancement Group nor Lightyear could possibly be reached to remark.
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