Deals & People December 23, 2024

Advisory M&A News – 12/23/24

DeVoe reports 2024 set a record for RIA deal activity; The Cerrado Group adds Tristar Pension Consulting as member firm; NFP acquires Salus Group; and more.

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DeVoe Reports 2024 Set a Record for RIA Deal Activity

According to DeVoe & Company, 2024 officially became the most active year for registered investment adviser mergers and acquisitions on record. With 269 transactions announced so far this year, the industry has already surpassed the previous high of 264 deals recorded in 2022.

Additionally, Q4 2024 set a new record for the most active quarter in history. With 78 reported transactions and counting, the quarter has surpassed the prior record of 76 deals set in Q4 2021.

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“A record fourth quarter pushed a strong year into the ‘record year’ category,” said David DeVoe, founder and CEO of DeVoe & Company, in a statement. “The primary decision-drivers of sellers continue to be rooted in the benefits of scale and solving for succession.”

DeVoe & Company stated that with nearly two weeks left in the year, additional M&A activity is expected to further extend the record-setting numbers.

The Cerrado Group Adds Tristar Pension Consulting as Member Firm

The Cerrado Group announced that effective December 20, Tristar Pension Consulting will become a member firm of the group. The firm was founded more than 25 years ago by CEO Shannon Edwards.

“I am truly excited to be joining The Cerrado Group,” Edwards said in a statement. “It is a wonderful opportunity to join together with an amazing and innovative group of independent third-party administration firms.”

Tristar Pension Consulting is headquartered in Oklahoma City. The firm serves plan sponsors of all sizes. Cerrado’s member firms service retirement plans total more than $25 billion in assets under management in over 15,000 plans and serving more than 600,000 participants.

“Having known Shannon personally, I am confident that she and her firm’s expertise and innovative approach will greatly enrich our consortium,” Cerrado Group member Amanda Iverson CEO of Pinnacle Plan Design said in a statement.

NFP Acquires Salus Group

NFP, an Aon company, announced its acquisition of Benefits Partner LLC operating as Salus Group, an independent employee benefits consulting, brokerage and administration firm based in Sterling Heights, Michigan.

Michael Brillati, CEO of Salus Group, will join NFP as senior vice president and report to Michael Schneider, president of NFP’s Central and West regions.

Salus Group was founded in 2005 as an employee benefits consultancy for credit unions. They have since expanded their client portfolio with a particular focus on middle-market employers, including those with unionized workforces. With a base in Michigan, Salus Group works with clients nationwide, with a particular focus on clients in Florida, Georgia and Alabama.

“I’m thrilled to welcome Salus Group to NFP and continue our investment in Michigan, which is a high-growth market and significant opportunity for NFP,” Schneider said in a statement. “Michael and his team will add additional scale and talent to our existing presence.”

 

Summit Financial Completes Minority Stake in Gordon Asset Management

Summit Financial, ​​an investment advisory firm, announced that Gordon Asset Management has joined its network. Summit’s partnership model, Summit Growth Partners’ investment in Gordon marks its 18th investment this year.

According to Summit, Gordon’s focus on 401(k) and other retirement plans will enhance Summit’s capabilities. Gordon has $220 million in assets under management, as well as approximately $1.1 billion in qualified plan assets. The firm has offices in Durham and Pinehurst, North Carolina.

Gordon is led by founder Joe Gordon, along with partners Glenn Moore and Todd Zempel. The firm will maintain its original leadership and core team. With the acquisition, Gordon will have access to support from Summit’s strategy group, which includes in-house legal advisers, tax professionals, financial planners and investment specialists.

Gordon will also receive Summit’s network and resources, including investment strategies and alternative opportunities. Supplemental capital from SGP will be made available as well.

Compliance December 20, 2024

DOL’s Khawar, Among Architects of New Retirement Fiduciary Rule, To Step Down

The career EBSA official who had been appointed by Biden to principal deputy assistant secretary will be leaving January 20.

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Department of Labor official Ali Khawar will be stepping down as the next Donald Trump administration comes into office in 2025.

Khawar will be leaving his position as principal deputy assistant secretary with the DOL’s Employee Benefits and Security Administration effective January 20, 2025, a DOL spokesperson confirmed.

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Khawar was appointed to his most recent role by President Joe Biden, but had served at EBSA during the first Trump administration. He did not immediately respond to request for further comment.

Ali Khawar

The deputy assistant secretary will depart after working for the federal government since 2005 when he started as an Employee Retirement Income Security Act investigator. He later had roles including chief of staff and counselor to former Labor Secretary Thomas Perez, a Barack Obama appointee, and led EBSA on a temporary basis at the start of the Biden administration.

The deputy to EBSA head Lisa Gomez, who has also announced her departure when Trump takes office, Khawar was part of EBSA after Congress enacted two major retirement reform packages— the Setting Every Community Up for Retirement Enhancement Act of 2019 and the SECURE 2.0 Act of 2022. Those laws have been reverberating through the industry since passage and will continue to do so as mandates and provisions continue to take effect in coming years. He was also a participant in rulemaking and guidance around cybersecurity, fiduciary standards and environment, social and governance investing for retirement plans.

In the area of fiduciary obligations, Khawar worked on the DOL’s Retirement Security Rule, commonly known as the fiduciary rule. That regulation, which was finalized earlier this year, sought to enforce an ERISA standard on annuity sellers and those giving one-time individual retirement account rollover advice. He, along with Gomez and Tim Hauser, deputy assistant secretary for program operations of EBSA, had championed the rule as a reworked version of a proposal that had been stymied by the courts during the Obama administration.

The rule, however, hit legal issues again this year when two Texas courts stayed it in part on the grounds that it was similar to the prior amendment; an argument the DOL has refuted, say the latest version took into account the prior U.S. 5th Circuit Court of Appeals decision. The DOL is appealing the court decisions, but now, with the Trump administration returning, ERISA experts have said the rule is unlikely to move forward.

Khawar was also part of the DOL’s final rule on prudence and loyalty, which sought to remove any obstacles to plan sponsors considering ESG factors when selecting employer-sponsored retirement plan investments. That so-called ESG rule overturned prior Trump DOL guidance that said fiduciaries should only consider investments based on “pecuniary factors.”

Republican attorney generals have also challenged that rule in court, with the case now under consideration by the 5th Circuit Court of Appeals in New Orleans. Meanwhile, Trump’s nominee for the new head of the DOL, Representative Lori Chavez-DeRemer, R-Oregon, supported a resolution seeking to overturn the Biden administration’s ESG rule.

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