HUB International Running Full Steam Ahead on RIA Acquisitions

The aggregator expects it will announce several more acquisitions of leading retirement plan advisory firms this year and have a busy 2021.

During a recent conversation with PLANADVISER, HUB International’s Adam Sokolic spoke in no uncertain terms about his company’s ambitions for the rest of the year, and for 2021.

Simply put, HUB’s buying spree of established retirement plan advisory firms won’t slow down anytime soon. According to Sokolic, who is the chief operating officer (COO) for the firm’s retirement and private wealth division, several more deals are already in their late stages—this after a busy November that saw multiple significant acquisitions of established registered investment advisers (RIAs).

“Our focus has not changed, looking at 2021,” Sokolic says. “We are focused on bringing on great talent, which is true across the HUB organization any time we are making an acquisition. We want to bring on folks who are still hungry to grow and take our business forward.”

That is a good way to summarize HUB’s vision for the retirement planning marketplace. As Sokolic puts it, HUB hopes to enable greater growth for the advisers it is bringing on board by supplying them with back-office efficiencies and extensive referral networks, in addition to other client-facing resources. Recently, this has included webinars and other tools to help employers cope with the challenges presented by the coronavirus pandemic, says Joe DeNoyior, president of Washington Financial Group, a former PLANSPONSOR Retirement Plan Adviser Small Team of the Year and part of HUB International since September 2019.

“Beyond facing the challenges of the moment, being part of HUB means we are able to focus on where plan sponsors are going, from a total employee benefits perspective,” DeNoyior adds. The convergence of health and wealth is here, he says, arguing that HUB is in a great position to fulfill this vision for plan sponsors. For context, HUB’s traditional business line includes insurance brokerages providing an array of property, casualty, risk management, life and health, employee benefits, investment, and wealth management products.

DeNoyior says the referrals his firm has received this year from within the HUB network have allowed it to achieve one of its greatest growth years ever, despite the pandemic and the associated recession.

“The referrals from within the network have been incredibly important this year, no doubt,” he says. “They have helped fuel the growth, and, at the same time, we have helped HUB by delivering our unique expertise to its existing clients, deepening those relationships as well.”

Sokolic agrees with that assessment, adding that HUB is very optimistic about this space. When pressed, though, both he and DeNoyior reject the idea that fully independent firms will not be able to navigate this business environment, or, more importantly, the ever-more-competitive environment expected to develop over the coming decade or so.

“Though we have gone down one specific route of being acquired, there is no simple right or wrong answer here,” DeNoyior says. “Some firms may remain wholly independent, I believe. They will have their space and we will have ours. That’s my view. One of the main benefits here at HUB is that we remain basically independent, but we have more resources available to serve our clients. If you are a firm that chooses to remain purely on your own, you need to make sure you have really strong strategic partnerships. As the consolidation continues, this will be even more important. The future is all about bringing more and more resources to your clients.”

Looking forward, Sokolic says, HUB has no intentions of slowing its acquisition activities in 2021.

“We are still in the early innings of the industry’s evolution and consolidation,” Sokolic says. “Maybe we are in the second or third inning, I would say. At this point, many leading firms have already made their decisions, and some of the biggest firms out there have either moved to private equity models or they have been acquired—or they have been doing the acquiring. Still, there are still so many firms out there that are still planning out their own future.”

DeNoyior and Sokolic add that one thing is clear about the future of the advisory business: Client demands and expectations are growing.

“The client’s expectations about what the adviser needs to deliver are going to continue to evolve and increase,” Sokolic says. “Take something like data analysis capabilities. The potential for larger firms like HUB to help advisers deliver more holistic and integrated client experiences is so powerful. An individual operator probably won’t be able to hire that kind of talent internally, which again points to the importance of strategic partnership for those firms choosing to remain on their own.”