NorthStar Financial acquires $10 billion TAMP

FTJ FundChoice's managed account capabilities will be integrated into Orion's model portfolio marketplace

Apr 11, 2018 @ 2:02 pm

By Ryan W. Neal

NorthsStar Financial Services plans to acquire FTJ FundChoice, a turnkey asset management program with $10 billion in assets under administration.

With the addition of FTJ FundChoice, NorthStar will support $690 billion in assets across its various platforms, which include Orion Advisor Services and CLS Investments.

(More: Orion aids advisers who want to add alternative investments)

NorthStar plans to use the TAMP to accelerate product development at its subsidiary companies. The company said in a statement that one of the first benefits of the acquisition will be the integration of FTJ FundChoice's managed account capabilities with Orion Communities, a model portfolio marketplace.

Orion CEO Eric Clarke said the acquisition will let Orion offer large firms and independent broker-dealers technology (both Orion's and integrations with other vendors), a managed account solution and FTJ's unique proposal tool under a single contract and price.

"[Advisers] are looking for additional ways to add sophistication to clients," Mr. Clarke told InvestmentNews. "Bringing institutional-level managers to those clients is a big deal."

The package can also make it easier for firms to recruit breakaway brokers looking for the managed account products they are accustomed to at banks and wirehouses, he said.

Orion isn't only technology provider targeting breakaway advisers. Envestnet Tamarac recently launched a "Quick Start" program aimed at breakaways who need to adopt a portfolio management technology as quickly as possible.

"Advisers recognize that they are going to have work under a fiduciary rule of some sort in the future," Mr. Clarke said. Whether the rule comes from the Department of Labor or the Securities and Exchange Commission, brokers see an advantage to operating as an RIA.

"We're seeing a lot of technology companies use this as an opportunity" to get in front of advisers with an existing book of business, he said.

NorthStar and FTJ FundChoice are no strangers to each other. FTJ FundChoice has been offering Orion as its portfolio management technology of choice since 2010, and CLS is one of the strategists featured on the FTJ FundChoice platform.

"We have a long track record with many of NorthStar's thousands of clients and hope to extend our growth within that user base, while also deepening and expanding our many relationships beyond the NorthStar footprint," said Dean Cook, the president and CEO of FTJ FundChoice.

Mr. Cook will remain in his current role, and FTJ FundChoice will continue operating within its current structure.

(More: FTJ FundChoice introduces a robo alternative)

Increased access to NorthStar's technology will help FTJ FundChoice sustain the 35% compounded annual growth in AUA that the TAMP has realized over the last two years, Mr. Cook said.

NorthStar is buying FTJ FundChoice from Seaport Capital, a middle market private equity firm. The transaction is expected to close in the second quarter. Details were not disclosed.

(More: Revisiting 10 fintech acquisitions, and how they changed the industry)


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