While the aging financial advisor population has led many RIAs to seek new ownership, demographics have not been the driving force for M&A deals undertaken by Mercer Advisors, the mega-RIA that added two new firms this week totaling $883 million in assets under management.
"Making sure you manage the expectations of the team coming in is critically important, but just as important is unlocking growth as quickly as possible," Mercer's principal of M&A partner development Martine Lellis told InvestmentNews. "Because I think everybody sees these partnerships as a way of benefiting in the longer run, and we're seeing more and more teams that want to continue to grow rather than it just being a straight succession play."
Mercer made deals this week to buy the $583 million firm Vishria Bird Financial Group, based in Memphis, Tenn., and the $300 million D. Scott Neal Inc., which has two Kentucky offices in Louisville and Lexington. They mark the first entry into Kentucky for Mercer, which is based in Denver and has $71 billion in total AUM.
"There's a lot of multi-generational wealth in the clients that they're serving, so that can actually lead to a lot of growth opportunity and a lot of longevity," Martine said of Mercer's new aquisitions, noting that Vishria Bird serves a large amount of affluent Indian-Americans. "I think you're going to see from a strategic perspective more focus on establishing some key markets where we perhaps don't have as much presence, just as we have a continued focus on our national scale and growth."
Vishria Bird and D. Scott Neal marked the 98th and 99th partner firms to join Mercer since it began adding new partners in 2016. Despite recent economic diruption triggered by President Donald Trump’s tariff policies, Martine has not yet felt any impact on Mercer's approach for snapping up RIAs.
"We'll see how that plays out with respect to valuations and structure, but it's still incredibly competitive. We still have the most robust pipeline that we have ever had, so I think we will continue to be very active in the space," she said. "With respect to deal structure and negotiation, we have to be very flexible and attuned to what's happening in the market because it can shift very quickly with respect to seller expectations and banker expectation."
Houlihan Lokey advised both Vishria Bird and D. Scott Neal in their sales to Mercer. Private equity firms Oak Hill Capital, Genstar Capital and Altas Partners have lead ownership stakes in Mercer, while Singaporean sovereign wealth fund GIC also has a stake in the company.
"It's probably the most competitive environment that we've ever seen," Martine added. "When you have many well-capitalized buyers out there competing for what we consider high quality partner firms, then I think just maintaining the ability to be nimble in terms of the way that you structure these deals is incredibly important."
“Investment from Envestnet will accelerate roadmaps at Vestmark,” said Freedom Dumlao of Vestmark.
Broker-dealers and RIAs can now offer clients crypto and tokenized securities through a single integrated platform.
New EBRI research shows how borrowers fall behind on retirement savings and what plan sponsors can do about it.
Nearly half of private firms forgo 401(k) plans even as new data ties them to higher stock option uptake among employees.
New research finds just 12% of wealth management firms have reached AI leader status, and it isn't spending that separates them
Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
