Wealth Enhancement Group to buy $1.1B firm, grow beyond $40B in client assets

An RIA consolidator and hybrid LPL Financial enterprise made its 10th deal of the year. The acquisition agreement comes as its private equity backer is reportedly considering a sale of part of its stake.

Wealth Enhancement Group is buying Miami-based Investor Solutions, a fee-only firm with six financial advisors and $1.1 billion in client assets, the firm said on Aug. 12. While overshadowed that day by an advisor from a firm it acquired last month getting arrested on child pornography charges, Wealth Enhancement’s latest deal will push its client assets above $40 billion upon close. Its acquisitions announced this summer alone span nearly $8 billion in client assets.

The number of M&A deals this year in the industry is on track for its ninth straight annual record volume, due to “strong secular trends (consolidation, succession planning, competition), supportive capital markets (cheap debt, heightened corporate cash balances, significant private equity dry powder) and fears of potential changes in the tax legislation,” according to investment bank and consulting firm Echelon Partners. The factors have created a blizzard of major deals.

As PE firms and other investors converge on RIAs based on metrics such as client attrition of little more than 2% or 3% per year and a business that doesn’t seem as tied to equity values as once thought, sellers are jumping, says Savant Wealth Management CEO Brent Brodeski.

“A lot of the RIAs had hoped that the next generation would be able to buy them out,” Brodeski says. “We've done a lot of deals, we've got a lot more coming. There's a lot of demand to become part of something bigger.”

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Savant itself is buying another fee-only firm, Greenwood, Indiana-based Treybourne Wealth Planners, in an agreement the parties reached on July 15 and are expected to close on Aug. 31. The deal marked Savant’s second of the summer. Savant had been “in that mix too” for Investor Solutions before Wealth Enhancement made the deal, Brodeski says.

CEO Frank Armstrong launched Investor Solutions in 1993, and advisors Richard Feldman, Robert Gordon and Brett Fingerhut are part of its executive leadership. The practice represents Wealth Enhancement’s first location in South Florida and fourth in the state alongside two offices in Jacksonville and one in Tampa. The parties expect the deal of an undisclosed price to close in October.

“We had a wide range of choices as to which wealth management firm to partner with in order to facilitate Investor Solutions' next stage of growth, but Wealth Enhancement Group made our decision an easy one” due to its technology, expertise and management team, Armstrong said in a statement.

In an interview in June shortly after news reports about TA Associates placing part of its majority stake in Wealth Enhancement up for sale, CEO Jeff Dekko declined to comment beyond saying the firm remains “thrilled to be partners” with its PE backer of the past two years. The two companies “expect to be together” in the future, Dekko said. A spokesman for Wealth Enhancement, Chris Clemens, had no updates on any potential deals.

“As a matter of policy, we do not comment on strategic transaction processes that may be undertaken by ourselves or our capital partners,” Clemens said in a statement.