United Capital's latest addition to its growing advisor roster is a whopper: The ambitious aggregator has reeled in a 23-person team from Capital Investment Counsel, a wholly owned subsidiary of Compass Bank that says it manages more than $2 billion in assets under management.

That would represent a more than 20% jump in AUM for Newport Beach, Calif.-based United Capital, which now has slightly over $9 billion in assets under management, according to a form ADV filed with the SEC in December.

The deal also creates two new United Capital offices in the Denver suburb of Cherry Creek, Colo., and in Scottsdale, Ariz. -- the firm's 58th and 59th. Another office in Tucson, Ariz., is set to open within the next 18 months, the company says.

CIC principals Stephen Dreiling, Jason Rosener, Chris Johnson and Brian McDowell will join United as managing directors. All the new United employees will be compensated with the firm's usual combination of cash and/or equity.


The big deal "is a sign of strength," says Alois Pirker, research director for Boston-based Aite Group. "They're competing in the same pool for advisors as everyone else and are demonstrating they are in a better position to catch broader opportunities."

Yet the firm's stated goal of becoming a national brand -- CEO Joe Duran has cited Starbucks as an inspiration -- may still prove challenging.

"United has a good opportunity to achieve some level of national brand recognition over time, but 'over time' is the operative term," industry consultant and analyst Matt Lynch, principal of Dayton, Ohio-based Strategy & Resources, says via email. "From an advisor's perspective, the aggregators offer either capital or capabilities or in some cases, both.

"The question for the advisors contemplating affiliation with one of the rollups," he says, is this: "What am I getting from them and what am I giving up in return? If I need business development (rainmaking) and not all the other services, can a would-be national firm generate enough new business for me locally? Is it worth the tradeoff? If I'm capable of business development and I just need technology, investment processes, etc., which model provides those services at the best price?"


Advisors are particularly interested in United's ability to help them grow by client referrals and recruiting new advisors, according to Ryan Shanks, chief executive of Finetooth Consulting in Longmeadow, Mass.

But Duran's national vision may prove a challenge in recruiting big independent firms, says Adams, whose firm works with United Capital.

"The most difficult obstacle for advisors is taking on the United Capital brand and name," he explains. "This is really only an issue for those advisors who are operating as independent firms."

Another key question, adds Lynch: "Are there enough advisors [interested in a rollup] for United Capital to be able to achieve their national coverage goals?"

To date, the company's tech prowess, client planning tools and consistent implementation have been big factors in the firm's success, Pirker says. But growing into a national brand will be difficult, he adds -- and expensive.

"Compared to wirehouse brands like Merrill Lynch and UBS with massive marketing budgets, United's boutique offering is a footnote," Pirker observes. "A national brand is a very big expense."

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