Allworth Financial acquires $2.8 billion RIA

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PE-backed Allworth reaches $7.5 billion under management as it marks its fifth deal this year

Sacramento, Calif.-based Allworth Financial continued its aggressive acquisition strategy by purchasing Dallas-based RAA, a $2.8 billion registered investment adviser that specializes in serving airline industry employees.

The deal, which is subject to regulatory approval, marks the fifth acquisition this year for Allworth and the sixth since it sold a 70% ownership stake to private-equity investors Parthenon Capital Partners two years ago.

Once the deal is completed, Allworth, which changed its name earlier this year from Hanson McClain Advisors, will manage approximately $7.5 billion.

“We target middle-class millionaires as they transition to retirement and that’s a lot of what RAA is,” said Scott Hanson, Allworth co-chief executive officer.

He added that RAA would be maintained as a sub-brand for now, “because they have a great reputation in the airline space.”

In addition to Dallas, RAA has offices in Atlanta and Seattle, and Mr. Hanson said he does not anticipate any job cuts as a result of the acquisition.

“We are growing so we need more people, not less,” he said.

The deal comes on the heels of a record quarter for consolidation in the RIA space, according to DeVoe & Co.

The record 36 deals during the just-ended third quarter contributed to the 101 deals transacted during the first nine months of the year, which surpasses the 100 deals completed during all of 2018.

“This is a strategic transaction for Allworth,” said David DeVoe, managing director of DeVoe & Co.

“In addition to adding significant assets and expanding their geographic footprint, this deal provides them with a path toward improving their specialization with specific client segments,” he added. “RAA is a great example of an RIA that focused deeply on a specific client segment, understood their specific compensation plans and company programs, tailored their services to said base and then benefitted from a growing reputation within.”