From left: Jeff Levy, Earle Allen, Mike Sanders and Mike Volo.

Though the retirement plan advisory industry has long been focused on the rapid pace of merger and acquisition (M&A) activity, one deal inked last week brought even more attention than usual, given its size and potential long-term implications.

The deal in mind here is, of course, the acquisition of Cammack Retirement Group by CAPTRUST. As noted in PLANADVISER’s initial coverage of the acquisition, the addition of Cammack’s $154 billion book of business brings CAPTRUST’s total assets under advisement (AUA) to more than $600 billion. In addition to the clients moving over, the deal brings 38 new colleagues to CAPTRUST, including Cammack’s leadership team comprised of Jeff Levy, Mike Volo, Emily Wrightson, Mike Sanders and Earle Allen, who all join CAPTRUST as principals.

Offering his take on what the deal means for his firm, Levy says becoming a part of CAPTRUST will help achieve two long-term goals: to expand Cammack’s geographical footprint and add new lines of business and services for its existing clients.

“This exciting next chapter for Cammack Retirement will allow us the opportunity to grow, take on new challenges and expand career opportunities for our employees,” Levy adds.

In a new and expansive conversation with PLANADVISER, recounted below, Rick Shoff, managing director of the advisor group at CAPTRUST, offers substantially more detail about the thinking that went into the Cammack-CAPTRUST merger.

PLANADVISER: Before we talk about the development with Cammack, can you reflect on the past year? How has the firm been navigating this environment, given its focus on M&A as well as organic growth?

Rick Shoff: Well, thinking back, we were early movers in terms of responding to COVID-19. Our leadership team made the decision on a Friday in March that, effective the following Monday, everyone would begin working remotely full time for the foreseeable future. Clearly, all the investments that we had made in infrastructure and information technology [IT] have really paid off.

For the most part, we are all still working remotely. We have had colleagues fight through COVID and we’ve had people whose families have been impacted by the pandemic on a very personal level. In some ways, though, we feel very fortunate. In the end, 2020 was a record year for us on every measure. We did more acquisitions in terms of both the number of deals and in total deal value than we ever did before. Our organic growth was at a record high, as well, and we added employees.

If you think about it, it’s pretty crazy that we and our peers in the industry were able to enact major acquisitions and other types of deals in this virtual environment.

PLANADVISER: That is a common sentiment in the retirement advisory industry after the challenges of 2020. Perhaps it shows the importance of our industry, as well as the fact that we were lucky that the COVID-19 pandemic happened after so much IT infrastructure had been built up. There’s no way the same success could have happened, say, 10 years ago.

Shoff: Yes, there’s no doubt about that. For the past two or three years we had been trying to get all of our people to embrace using Microsoft Teams, for example. In hindsight, it’s interesting to see how the adversity of the pandemic allowed people to realize and embrace the role of virtual connections.

PLANADVISER: Turning to the Cammack deal, this is a firm that we have reported about for a long time, and it is viewed as being an industry leader in various ways, such as in serving the 403(b) plan and the higher education marketplace. How do you view the deal internally?

Shoff: Like you, we’ve know the Cammack team forever, and we’ve always held them in high regard. These kind of things take a lot of time, but they do happen when they are ready to happen, so to speak. Both of our groups knew that a time could come where our alignment in terms of culture and client fit could make a combination really attractive. We reached that point this year and enacted the deal last week.

Over its 50-year history, Cammack was one of the very early movers and developers of the 403(b) space. For years, the firm dominated that space, and we didn’t really put our focus there, frankly. More recently, though, we have committed to growing organically with 403(b) plan clients, and to growing in this market via acquisitions.

So something that might not be appreciated within this deal is that, even before acquiring Cammack, we actually had the largest 403(b) plan practice out there, and Cammack was second. Together, its client list and ours represent a who’s who of public and private universities. That’s clearly a good thing for us and we’re very excited about what we can accomplish in this market.

PLANADVISER: How is it different, serving such clients, compared with the typical 401(k)?

Shoff: In the higher education space, it really matters who else you work with, because every high school and university has its set of peer schools, and they are speaking all the time about all types of things. They are very open with each other about who their vendors are and how they are doing—more than in the private sector. But, as with all our client segments, the space is competitive, and from time to time they do go to market to validate that the services we are providing are still the best for them.

PLANADVISER: Can you reflect on the quality of the talent coming on board with this latest deal?

Shoff: Oh, yes, they are fantastic. I know Mike [Volo] has written extensively for PLANSPONSOR, for example. We like to think our thought leadership content is pretty solid already, but they will help us there. Also, they are doing a fair amount of work in the public sector—serving governmental 457 plans. We are in that space to some extent, but it hasn’t been a focus, so we are going to leverage their expertise to really lean into serving governmental plan sponsors.

Also, they have actuaries on staff, which is exciting. All in all, this is a great pickup. For the Cammack folks, one exciting thing is that they will gain access to our participant advice platform. The ability for them to go back to their clients and offer these services at scale, it’s very exciting. Finally, we are going to help them expand their geographic footprint. It’s very complementary as far as client types, and we’re both getting better at certain things that the other group really excels at.

PLANADVISER: What kind of a reaction have you gotten from other firms and leaders in the retirement plan advisory industry?

Shoff: I think one thing that shows the importance of this deal is the industry media chatter, and if I look at my social media inquiries and email/text inquiries, this deal has really caught more attention than any we have done before.

PLANADVISER: Let’s lean into that. It’s impossible for you to address this totally objectively, but what would you say about the industry’s take on what this deal means? Do you understand the concern that some may feel when they see this degree of consolidation rolling on?

Shoff: Well, first of all, we’ve got plenty of seats left on the bus, so that’s the first thing I’ll say if people are concerned about consolidation. But, stepping back, it’s an interesting question. I think there will always be a space for niche players and lifestyle firms. But yes, there are clear market advantages that we are working toward that can only come along with scale and depth of resources. It’s not just that we are big and getting bigger. We feel we can build a more durable business platform with our approach.

Keep in mind, we reinvest half of our free cash flow back into our business each year to extend our value proposition. When you are as big as we are, that’s a lot of money. Simply, if you have millions of dollars to do things with versus hundreds of thousands of dollars, over time, that starts to make a big difference to your deliverables.

I understand your question, which is really about what you would be thinking right now if you were an independent firm that is only half the size of Cammack or, more realistically, a tenth of the size of Cammack. If you have been working on your business in terms of looking to add scale over the next five or 10 years, and then you see Cammack deciding to make this move, it does raise big questions.

However, if you don’t want to grow and you just want an independent ‘lifestyle firm’ with a smaller book of business, I think you can hang onto that kind of enterprise forever. I think there are still a lot of smaller groups in our industry that will be OK with staying the same size and serving their core of close clients. That will always be one part of this industry, I believe, and on the other hand there will be an emerging and select group of national adviser brands that will be dominant. I like our chances in that environment.