One of the country's largest RIA aggregators, United Capital acquired its 50th firm, Ellis & Ellis of Woodland, Texas, with $500 million in AUM.
In wooing the team, United Capital told Ellis & Ellis founder Byron Ellis that he could expect to grow his firm by as much as a third, in joining the larger firm, says Matthew Brinker, United Capital's senior vice president of partner development and acquisitions. The firm left independent broker-dealer Ameriprise to join United Capital. United Capital acquires all of its firms outright.
IBD 'CONSTRAINTS'
"Byron outgrew Ameriprise," Brinker says. "We're finding, when we onboard teams, that we are able to add an additional 20% to 30% of new revenue by taking the IBD out of the picture. Within an IBD, you are forced to operate within the constraints that the IBD has built for you, which isn't completely open architecture and isn't best for the clients at the end of the day."
Ellis joins United Capital as a managing director.
Firm founders like Ellis take equity stakes in United Capital in exchange for ownership of their firms, Brinker says.
"All of our partners believe that the underlying equity in United Capital is going to grow faster than the underlying equity in their businesses, which we've proven has been the case over the last 10 years," Brinker claims.
'WORLD CLASS'
Ellis founded his firm in 1989 and now serves 700 households, according to a United Capital release. The firm brings a staff of 10 to work for the new parent company.
For the past two years," Ellis said in a statement, "my colleagues and I have been searching for ways to turn our business into something that we would proudly call world class and as we searched, it became evident that we needed to make a much more significant change. From there, we likely considered more than 35 firms" before settling on United Capital.
Based in Newport Beach, Calif., United Capital now has $10.6 billion in client assets under management.
Read more:
United Cap Snaps Up $320M RIA United Capital to Offer Stock Buyback to Advisors Advisor M&A: Who's Buying RIAs Now? United Capital Picks Up $38 Million in New Funding Top Talent Shortage Slowing RIA Growth?
