The new entity, with Pensionmark and CAPTRUST each owning half of the enterprise, will be called Pensionmark and will include the creation of a new RIA (registered investment adviser). Pensionmark will also leverage CAPTRUST’s broker/dealer (B/D), with all 150 affiliate advisers moving their business to CAPTRUST’s B/D in the next 30 days, says CAPTRUST CEO Fielding Miller. All affiliates are already aware of what’s going on and have responded very positively, he notes.
At the outset of the new partnership, CAPTRUST and Pensionmark advisers will continue to offer services independent of one another, utilizing the same tools, services, and infrastructure they offer today. “We want to maintain distinct value propositions,” he says of the two complementary businesses and advisory models.
In addition to putting in financial capital, CAPTRUST is also bringing its intellectual capital to the entity, Miller says. However, that intellectual sharing and collaboration will occur more with ideas and back-office discussion, not in the client-facing materials. “We will be careful not to have any client-facing stuff that looks the same,” he says.
Another value this offers is for those Pensionmark affiliate advisers who don’t yet have a business succession plan, Miller says. When an affiliate is ready to value and sell his business, CAPTRUST can help with that, and bring the adviser into the CAPTRUST model, helping them grow and transition their business. “Part of the value of CAPTRUST is in growing the business and being part of the larger business, participating in the growth of the company,” he comments.
Although he had been aware of Pensionmark’s business and its CEO, Troy Hammond, for a number of years, Miller says, this deal really happened in the last six months. “We think they are onto something good here and we want to help it grow,” Miller says, adding that the two companies are also a good cultural match. Troy Hammond and Mike Woods will continue their leadership roles, and Pensionmark will also be adding a new COO, Miller says.
For CAPTRUST, which has traditionally completed transactions in which it acquires advisers and their books of business, making an investment in Pensionmark, which has favored a partnership model, is a new approach, Miller explains. Despite the differences, he says, “It is an interesting and appealing business model and we think there is a role for this premium offering,” which “extends our reach into a market we aren’t involved in—the whole affiliate business.”