United Capital Financial Advisers is gearing up for more big expansion.
In what the firm's CEO characterized as another step toward national dominance, the national RIA partnership announced Wednesday it has added its first office in the Pacific Northwest, acquiring Seattle’s Paragon Investment Management.
Paragon, which was founded in 1991 by Shari Burns, has more than $1 billion in assets under management and targets high-net-worth investors. United Capital's top executive, Joe Duran, said in an interview that the acquisition gives United Capital “national coverage” for its high-net-worth clients. United Capital has offices in Bethesda, Md., and Chicago that also focus on high-net-worth individuals.
Duran said the acquisition fills a “gaping hole” as United Capital expands nationally. In 2013, he said he expects to increase its total offices to 50 from 41 as it looks to add offices in specific states. “We need to add in Arizona and Oregon and we could also add in the Midwest in St. Louis,” Duran said. “We have clearly got a national footprint now, but now we want to start filling in through recruiting.”
'MODEL IS STARBUCKS'
In 2012, United Capital added five offices. As of Jan. 1, it and its affiliates oversees $15 billion in assets, of which it manages $8 billion.
This year, Duran said the company plans to aggressively expand its business model, and its brand -- aiming to look more like Starbucks and less like rivals HighTower and Dynasty Financial.
“Our model is Starbucks,” said Joe Duran, United Capital’s founder and chief executive officer. “Everyone thinks they are ‘coffee’ and we are ‘investments,’ but we are both in the experience business. That is what we are creating. A national experience built around wealth management advice.”
This year, the national partnership of private wealth counseling offices plans to add advisors and “really push on the retail level,” Duran said.
“Our competitors are Edelman and the Mutual Fund Store,” he said. “HighTower and Dynasty and Focus are not our competition. We want to be less investment-centric and more advice-centric ... [and] we want to present one unified model to clients nationally.”
Last year, United Capital hired three executives to recruit advisors with between $50 million and $100 million in assets under management. “These advisors are big enough to have stand-alone offices,” Duran said, “ but, we expect they will help us expand measurably.”
Through this recruiting initiative, United Capital added five advisors in the fourth quarter. Duran said the company aims to recruit 20 to 30 advisors to existing offices this year, adding between $500 million to $1 billion in assets under management.
“We are very bullish about this initiative,” he said. “We can add advisors without purchasing firms. We plan to add four to five new, physical locations in 2013 and two to three of those we will fill with people we recruit.”
Duran sounds bullish about his plans for 2013. “This year will bear fruit for United Capital,” he said. “We plan to be the dominant, national wealth management counseling firm. We know we have to invest in that and think big. We plan to spend millions on branding and marketing to help our offices grow.”