In its eighth deal of the year, Raleigh, North Carolina-based Captrust Financial Advisors has acquired Rinet Co., a $2.2 billion registered investment adviser that is selling because $2 billion is no longer enough scale in the wealth management space.
Founded in 1974, Boston-based Rinet has grown organically and never made an acquisition, aside from the 2009 deal in which eight partners bought the business back from a bank that purchased the RIA in 1999.
Brian Rivotto, managing director and chief executive of Rinet since 2002, said the sale to Captrust was about gaining scale by leveraging marketing, technology and back-office support provided by the much larger aggregator.
“We weren’t growing as quickly as we would like, and keeping up with technology is difficult for a small firm,” Rivotto said. “You have to be competitive, and you have to grow.”
It's a sign of the times when a $2.2 billion RIA is described as “small,” but now Rinet will take on the Captrust brand and become part of a company with $662 billion under advisement.
Even though Captrust’s total assets under management include $577 billion in retirement plan assets and $85 billion in wealth management assets, wealth management represents “at least half of our total revenue,” said Rush Benton, senior director of strategic growth at Captrust.
Of the eight deals Captrust completed this year, six have been in the more profitable wealth management space. And four of those have come with assets under management in the $2 billion range.
“Wealth management is a growing focus for us, and that’s been our focus for the past six or seven years, with 70% of our transactions being in the wealth management space,” Benton said. “I don’t think that trend is going to change because the number of wealth management RIAs far exceeds the number of retirement plan advisory firms.”
Another driver behind the trend, Benton said, is higher prices pushing traditional succession plan acquisitions out of reach of many second- and third-generation buyers.
“Valuations are at an all-time high and the supply of firms is at an all-time high,” he said. “There's some of the tax-driven timing involved in deals, but the main underlying driver is a bunch of first-generation owners who are looking to transition their businesses and capture some value for the business they’ve built, and the second generation cannot afford to buy the business.”
From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.
Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.
“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.
Sellers shift focus: It's not about succession anymore.
Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.
RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.
As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.