Dynasty Financial Partners affiliated RIA DB Root has dipped its toe in the M&A space for the first time. It made a pair of deals that will position it to grow its retirement business, which the firm says isn’t currently getting a significant amount of attention.
DB Root has been a standalone firm in Pittsburgh since 1994. Founder and CEO David Root says there has always been a desire for M&A, but it was a matter of waiting for the right opportunity, which eventually presented itself in the RIA channel.
DB Root joined Dynasty Financial Partners network in October 2015.
"We're seeing an increasing number of M&A transactions taking place in the RIA market and at Dynasty, we look forward to helping firms grow through acquisitions,” says Dynasty CEO Shirl Penney. “The addition of these two new firms to DB Root, fueled by Dynasty's sales structuring, transition group and capital strategies, puts them in an entirely new position in their market."
The financial advisors of R. Applegate & Associates and the Paul Abendroth Group are teaming up with DB Root. R. Applegate, which services high-net-worth clients, will remain an independent RIA over the next year with DB Root providing management and expanded support services.
“The reason to have the relationship begin Jan. 1, 2018 under a merging of capabilities and with an ultimate acquisition into the future of 2019 is to give us time to structurally build this the right way,” explains Applegate leader Richard Applegate. “What it does ultimately is it provides my clients and myself with a well-structured succession plan.”
Partnering with Applegate lets DB Root advance its retirement plan advisory business, which Root describes as having been a “minority” part of the business.
“We started it in 2010 with the best of intentions, but our background, our experience, really our expertise is on the client wealth management side,” Root says. “The real synergy is that [Applegate] has substantial, extensive retirement plan advisory experience as a fiduciary dating back over 40 years.”
Applegate also has a meaningful private client high-net-worth wealth management side to its business as well. The combination of the two firms provides DB Root with scale in its local Pittsburgh market but also extends into the Great Lakes region.
Additionally, DB Root is acquiring The Paul Abendroth Group—financial terms of the deal were not disclosed. Advisors Paul Abendroth and Ryan Borucki are leaving Rehmann Financial, a regional CPA firm, to join DB Root. They’ll be based in Toledo, Ohio where they will focus on both wealth management and 401(k) plans.
Abendroth has about $100 million assets under management on the wealth management side, plus another $300 million on assets under advisement. For Applegate’s part, it is coming in with high-net-worth wealth management services of about $225 million and qualified retirement plans with assets under advisement of $4.2 billion of retirement plan assets.
“Merging the three of us together gives us synergies in all areas and expertise in all areas,” Root says. “Putting us all together [brings] more than 250 years of experience.”