Modern Wealth acquires $1.1B PSF/Galloway, eyes national expansion serving first responders

Modern Wealth Management has acquired PSF/Galloway, a Mesa, Arizona-based RIA managing $1.1 billion in assets for clients from police and fire departments. The acquisition spurs Modern Wealth’s launch of Public Safety Financial, a new division to serve the pension and financial planning needs of first respondents and government employees. 

PSF/Galloway marks Modern Wealth Management’s entry into Arizona, where it will launch its second “Organic Growth Hub” joining its original hub in Kansas City. The RIA plans to reach 150 employees in the Phoenix area, Modern Wealth president and co-founder Jason Gordo told InvestmentNews. The PSF/Galloway acquisition pushes Modern Wealth past $10 billion AUM as its fifth acquisition of this year and 18th overall since its inception in 2023.

“We would love to find additional advisors across the country that are squarely focused on serving the first responder marketplace,” said Gordo. “Mike [Galloway] led by far the largest first responder organization in the country in financial services, and we look to just take what he's built, the team that he's assembled, invest growth capital into the organization, and hire support people around the business.”

Transferring to Modern Wealth are PSF/Galloway’s entire 42-person team, whose clients span more than 3,000 public safety households across over 100 police and fire departments. Many of PSF/Galloway’s advisors remain active service members. “We're probably one of the few firms in the country where our advisors are regularly having lunch in fire stations and riding around on fire trucks and cop cars,” said Mike Galloway, who founded PSF/Galloway in 2006 after serving as a sergeant in the U.S. Marine Corps and lieutenant of the Mesa Police Department.

Galloway sought to become a financial advisor after his own challenges in optimizing his military service pension credits upon retiring from his police lieutenant role at age 39. “There's a lot of different rules for government plans about how retirement accounts are taxed and they have different withdrawal penalties, and many systems have several tiers,” said Galloway. 

“Many of those pensions have irrevocable choices that you have to make on what path you're going to choose for what kind of retirement benefits you want 20, 30 years down the road. And that's a pretty tough decision for a brand new rookie cop or firefighter to make right when they get hired,” Galloway said. 

Modern Wealth is not the first large RIA to make a recent M&A move that targets first responders. In August, $20 billion RIA Merit Financial Advisors acquired Second Half Financial Advisors, a $225 million RIA focused on serving firefighters and police officers in Florida. 

“Across the country, I believe about half the states now have hybrid pension and defined contribution style retirement systems,” Galloway said. “So police officers, firefighters and now even military personnel more than at any time in history have to actually manage investment portfolios to come up with an optimal retirement outcome.”

Founded by former United Capital executives, Modern Wealth launched in 2023 with $200 million from private equity firm Crestview Partners. Public Safety Financial is the first division from Modern Wealth to serve a niche industry of professionals. “We believe that there's a few million first responders in the marketplace across the country,” Gordo said.