United Capital Financial Advisers LLC has acquired Seattle-based registered investment adviser Paragon Investment Management Inc., giving the firm its first foothold in the Northwest region of the country.
“The Northwest region was a gaping hole in our national footprint,” said Joe Duran, chief executive of United Capital, a partnership of financial advisers. “They have a nice big office we can build off.”
Paragon, founded in 1991, has a team of eight financial advisers and a number of equity and fixed-income analysts. The firm manages more than $1 billion in assets, and its typical high-net-worth client has more than $4 million in assets, according to Paragon chief executive Shari Burns. Paragon has been ranked on the Barron's Top 100 Independent Financial Advisors list for the last four years. It was ranked 81st in 2011.
Ms. Burns said Paragon's strengths are in investment management, and the opportunity to expand into client financial planning with United Capital was a major incentive for the deal. She also cited the increased costs of technology and compliance as reasons to join with a larger firm.
“In the last 10 years, technology and regulatory issues have become a much bigger burden,” Ms. Burns said. “Now we can use [United's] centralized services and focus more on serving our clients.” Paragon currently has relationships with 135 families and 277 households.
The deal with United also helps with Paragon's succession planning, Ms. Burns added. “This extends the life of our business and provides great opportunities for our employees,” she said.
United's modus operandi is to look to open up satellite offices after it establishes an anchor location in a region. Mr. Duran said he expects to open offices in areas such as Bellevue, Wash., and possibly Portland, Ore., in the near future.
Today's acquisition notwithstanding, Mr. Duran has increased United's marketing budget, and plans to focus more on organic growth. “Our goal is to make acquisitions less a part of our strategy,” he said. “This year is about building our national brand.” Mr. Duran expects to open up about 20 new satellite offices around the country this year.
United Capital currently has 41 offices, $15 billion in assets under advisement and $8 billion in assets under management.