MAI’s Newest Acquisition Brings Insurance coverage In-Home

MAI Capital Administration, a Cleveland-based registered funding advisor, has acquired one other Ohio wealth supervisor to broaden its geographic attain and create an in-house insurance coverage enterprise.

The acquisition of John D. Dovich & Associates, an RIA in Cincinnati with practically $600 million in consumer belongings, brings MAI's complete belongings below administration to $6.6 billion. The entire firm's 10 staff will be part of MAI. Particular phrases of the deal weren't disclosed.

“The idea is easy: We wish to turn into a nationwide model," mentioned Rick Buoncore, MAI Capital managing associate. The RIA now has workplaces in seven cities, together with Reston, Va., Ponte Vedra Seaside, Fla., Nashua, N.H., Irvine, Calif. and Columbus, Ohio.

Buoncore mentioned he met with 5 corporations within the Cincinnati space earlier than deciding on Dovich & Associates, which works primarily with high-net-worth households. MAI would have finished the cope with the "like-minded and like-hearted" agency regardless, however the vendor's insurance coverage experience made the RIA particularly engaging, he mentioned.

Along with turning into a associate and regional managing director at MAI, John Dovich, who based Dovich & Associates in 1987, will lead MAI Insurance coverage Options, a brand new subsidiary of the RIA.

MAI has suggested purchasers on insurance coverage insurance policies to assist them plan and make investments, nevertheless it's by no means been compensated for it till now. The RIA beforehand labored with unaffiliated insurance coverage brokers, who made a fee on the suggestions. An in-house insurance coverage enterprise will successfully lower out the unaffiliated brokers, who generally gave the impression to be peddling merchandise than creating options for purchasers, Buoncore mentioned.

Against this, Dovich, who will leverage an current relationship with Lyons Firms, an unbiased danger administration and insurance coverage brokerage, begins with consumer wants and finds a product to swimsuit these wants. 

“Usually after we herald an insurance coverage particular person, we don’t get that response,” Buoncore mentioned.

Some fee-only RIAs would argue that getting paid for promoting a sure product is a battle of curiosity. 

“All of us have a battle of curiosity in a technique or one other. What we attempt to do is embrace it, not run from it," Buoncore mentioned. Purchasers can all the time select an out of doors insurance coverage supplier, he added.

Together with MAI Insurance coverage Options, the RIA additionally has its personal personal fairness enterprise run by a nine-person staff. Most RIAs do not handle sufficient cash to warrant the price of an in-house personal fairness fund, however some corporations, like Cresset Capital Administration and Venturi Wealth Administration, say purchasers need entry to non-public investments and the RIA can save prices and ship higher returns.

Matt Sonnen, the founder and CEO of PFI Advisors, a consulting agency to RIAs, mentioned he thinks it is a mistake to convey pricey companies in-house as a result of purchasers right this moment are targeted on whether or not they'll obtain their objectives, not searching for out one of the best returns above all else. Though, he acknowledged that it may be helpful to some corporations and their purchasers. “Clearly, the reality might be someplace between these two extremes,” Sonnen mentioned.

Dovich & Associates was the fourth acquisition by MAI because it partnered with Wealth Companions Capital Group, a monetary companies holding firm with a minority stake in MAI, Forbes Household Belief and EP Wealth Advisors of Southern California. Buoncore mentioned there are a "host of different ones within the pipeline."