Century-old wealth management brand Baird is acquiring 75-year-old Hefren-Tillotson, adding $18 billion in client assets to Baird’s more than $400 billion.
The deal, which is expected to close in June, with Hefren-Tillotson being fully integrated by October, will add 90 financial advisers working out of six Pittsburgh-area offices to Baird’s more than 1,300 advisers in its private wealth management business, who work from 160 locations in 33 states.
“We have known and had the highest regard for Hefren-Tillotson and their leadership team for years,” Steve Booth, Baird chairman, president and chief executive officer, said in a statement.
“Not only do they have a stellar reputation, but the similarities between our two firms are remarkable — a strong, client-first culture and business model, a commitment to being a great place to work, and a tradition of giving back to the community,” Booth added. “Hefren-Tillotson is an incredibly high-caliber firm, and we are looking forward to continuing our partnership long into the future.”
John Eubanks, director of the investment banking firm Park Sutton Advisors, was not involved in the deal, but described it as being in line with Baird’s acquisition aspirations.
“This is not surprising given Baird’s acquisition of Hilliard Lyons a few years ago,” Eubanks said. “All of the independent, regional and even national wirehouse broker-dealers that are providing wealth services through both broker-dealer and RIA channels recognize the need to continue expanding into the RIA side of the business.”
Eubanks said the acquisition is another endorsement of the fee-based model.
“For over a decade, financial advisers have been exiting B-Ds for the fee-based or fee-only independent RIA channel, and there is really no end in sight to that exodus,” he said. “Acquisitions like this, and mergers of equals among independent B-Ds, are necessary for companies that still rely heavily on broker-dealer revenue because that business model has been in decline for decades and acquisitions are a way to cut cost, improve efficiencies and build scale.”
Hefren-Tillotson’s top leadership — Kim Tillotson Fleming, Craig Tillotson and Don Belt — will continue in their roles through the merger, working closely with Baird’s private wealth management leadership team to ensure a smooth transition for the firm and its clients. When the merger is complete, Fleming will serve as a vice chair of Baird and as a member of Baird’s executive committee, while continuing to serve her clients as a financial adviser.
Tillotson will serve as a managing director and branch manager and will continue as a financial adviser. Belt will become a managing director and director of operations and integration.
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