Advisory M&A News – 6/10/24

Blue Ridge Associates acquires Tax Sheltered Corporation; Generational Wealth Partners returns to Ameriprise Financial; Kin Wealth joins Commonwealth; and more.

Blue Ridge Associates Acquires TSC 401(k)

Blue Ridge Associates, a portfolio company of Levine Leichtman Capital Partners, announced that it has acquired Tax Sheltered Corporation Inc., a leading provider of administration solutions for retirement plan benefits.

“After getting to know the TSC team, it was abundantly clear that they were the perfect partner to advance our strategic objectives and capitalize on the sizeable and growing qualified retirement plan market,” Bill Yoerger, CEO of Blue Ridge, said in a statement.

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

Established in 1966, TSC provides administration and compliance solutions for all types of employer-sponsored qualified retirement plans serving 3,100 plans covering over 152,000 participants across the small and middle-market business community. The addition of TSC strengthens Blue Ridge’s position as an independent ESOP and qualified retirement savings plan administration and recordkeeping firm.

“We are pleased to demonstrate our continued support of the Blue Ridge team with this acquisition, which reinforces their strategic combination of organic and inorganic growth initiatives,” Andrew Alexander, managing director at LLCP, said in a statement.

Generational Wealth Partners Returns to Ameriprise Financial

Private wealth adviser Kyle Rasmussen and financial adviser Nick Blasberg recently joined the independent channel of Ameriprise Financial Inc. with over $105 million in client assets. Their practice operates under the name Generational Wealth Partners and includes financial planning specialist Hunter Bell.

Rasmussen, who has nearly 15 years in the industry, returns to Ameriprise Financial after five years at LPL Financial in Reinbeck, Iowa. The team is supported locally by Ameriprise franchise field vice president Brad Sabol and Ameriprise regional vice president Michael Lawson.

“At Ameriprise, advisers are never made to feel they are going it alone,” Rasmussen said in a statement. “The firm puts advisers at the center of their business model and focuses on providing all the tools, technology, training, time and energy needed to grow and do great things for clients.”

Rasmussen cited several other benefits that influenced the team’s decision to move to Ameriprise, including integrated and streamlined technology, leadership support and coaching program as well as resources for external practice acquisitions.

Kin Wealth Joins Commonwealth

Commonwealth Financial Network announced the addition of Kin Wealth of San Antonio, Texas, to its network of independent financial advisers.

Formerly with Frost Bank, CEO and founder Rebecca Boyd, partner Collin Fabac and their support staff bring with them more than $250 million in total client assets. Boyd chose to join Commonwealth and partnered with Fabac after 24 years with Frost Bank.

“There was a boutique feel to [Commonwealth], and I saw early on that they would treat us the way we treat our clients,” Boyd said in a statement.

Kin Wealth will receive access to Commonwealth’s brand studio offering and in-house marketing consultants to help develop a name, logo and web presence for their newly independent business. Commonwealth’s menu of research and investment offerings will also help Kin Wealth match its clients with the most appropriate solutions.

Kestra Private Wealth Services Adds Attain Wealth Partners

Kestra Private Wealth Services announced the addition of the financial professional team at Attain Wealth Partners to its platform. Prior to founding Attain Wealth Partners, the team was associated with Merrill Lynch Wealth Management.

Based in Zanesville, Ohio, Attain Wealth Partners is joining Kestra PWS with co-founders Shakir Kaka and David Weinberg at the helm, bringing over 40 years of expertise to the wealth management space. Joining the two is a tenured team of five wealth advisers, including Bridget Tetak, Ross Weinberg, Sierra Brown, Nazneen Kaka and administrative partner Anissa Judd.

Overseeing $500 million in client assets, the team specializes in portfolio management, retirement strategies, risk management, estate strategies supporting ultra-high-net-worth individuals and more.

“Joining Kestra PWS allows us to develop trust and stronger, long-term relationships with our clients, working alongside like-minded partners who believe in our mission and goals,” Karka said in a statement.

Additional Services Key for RIA Growth Plans

Financial advisers’ growth plans include additional client services such as multi-generational planning, college saving and 401(k) asset management and plan startups, according Schwab.

Financial advisers who have recently gone independent are looking at growth opportunities by offering services beyond traditional wealth management, according to Charles Schwab’s recent Supported Independence Study.

In a survey and interviews of 42 advisers who work for a registered investment adviser and transitioned to independence in the last 4 years, the firm found the group offering services beyond traditional portfolio and wealth management to areas such as multi-generational wealth planning (76%), saving for college and other milestones (76%) and engaging clients with risk management (71%).

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

The results show an increased push toward more holistic financial planning that, according to Schwab, is contributing to the desire for advisers to have more freedom of service offerings and fee setups as RIAs.

“Advisers want the freedom to do what is best for their clients,” says Jon Beatty, chief operating officer of Schwab Advisor Services. “Being independent allows advisers to provide more personalized service, a wider range of products and solutions, and to build their business their own way—and that can also lead to additional opportunities for growth.”

Schwab is the country’s leading custodian for RIAs as built under the leadership of Bernie Clark, who will be moving into an advisory role at the end of this month. The firm’s services are being used by almost 15,000 advisers as of May 31, according to a Schwab fact sheet.

A minority of recently independent respondents to Schwab’s survey also noted extending services into further planning areas, including:

  • Tax planning (29%)
  • Estate planning (17%)
  • Family Office services (17%)
  • Charitable giving planning (14%)
  • Access to banking and lending solutions (12%)

Beatty notes that, along with these additional services, many advisers are incorporating client’s 401(k) assets into their portfolios via the self-directed brokerage account window.

“Retirement planning is central to the role advisers play when serving their clients,” Beatty notes. “Managing their clients’ SDBA assets represents a business opportunity for independent RIAs.”

The firm’s most recent SDBA indicators show that 17% of participants who use the firm’s offering, the Schwab Personal Choice Retirement Account, hand over investment management of their 401(k) to their RIA. In  the first quarter of 2024, the average SBDA account balance via the offering was almost double that of non-advised participants, according to Beatty.

401(k) Potential

In an interview separate from the Schwab report, RIA Renée Pastor, a wealth manager and founder of The Pastor Financial Group, agrees with the vast potential in the marketplace for independent advisers to manage participants’ 401(k) assets via the SBDA—though via the plan sponsor menu itself, which can be an option plan fiduciaries choose for participants.

Pastor notes the advantages of having 401(k)s managed for an advisory fee including increased returns, syncing the entire portfolio of assets and setting up the maximum retirement savings and goals.

“For all these years I wasn’t able to [offer the service],” she says. “Now I am finding these highly paid professionals who have financial advisers, but don’t even know they can get help with their 401(k) accounts.”

In her view, one holdup to such services is that many plan sponsors, while offering an SBDA, do not choose the option of allowing third-party financial advisers to manage the qualified plan assets. She sees this as a disadvantage for independent advisers who are going up against the larger financial firms already engaged with participants via plan administration and services.

“If I can wave a magic wand for this industry, I’d give participants the right to hire third-party advisers if they want, and to have the fees deducted from their plan,” she says. “People who have financial advice do better, and what’s more, when you look at surveys of participants, they want financial guidance and are willing to pay a reasonable price for it.”

Beyond Wealth Management

Meanwhile, Schwab’s Beatty also noted the opportunity for advisers to partner with clients who are small business owners on either offering 401(k) plans directly or via partnership.

“Helping clients who are business owners with workplace retirement plan needs is an area of opportunity for RIAs, especially those who may be part of an adviser firm with both wealth management and retirement plan practices,” he says. “We see these connections being made more frequently among the adviser firms we serve as the landscape continues to evolve.”

Schwab’s report included surveying and discussion with 158 advisers who are currently with a brokerage firm or investment banking division, but are considering going independent in the next three years. Among that set, 44% are planning to join an existing RIA, 31% are considering starting their own firm and 24% are unsure of which path they will take.

Mergers and acquisitions in the RIA space have been rampant in recent years, both with pure wealth management firms as well as qualified retirement plan advisement and wealth divisions seeking to capitalize on the retirement and wealth convergence.

Beatty sees the M&A as an “additive” to the adviser space, providing a path for some independent advisers to sell their firm in a way that sets them up for a strong succession strategy that can also keep providing services to clients. For others, merging may be a way to outsource administrative functions and free “up their time to deepen client relationships and enhance personalization.”

“In other words, M&A activity in the RIA industry shouldn’t be seen as a deterrent to those considering independence—it should be seen as a sign of a vibrant industry that allows advisers to chart their own course,” he says.

Correction: Updates to show that Bernie Clark’s move is not until the end of June.

«