Cetera buys hybrid RIA from fellow Genstar Capital-backed firm

Two portfolio companies from the same private equity firm struck a deal transferring ownership of a hybrid RIA to its independent broker-dealer.

Cetera Financial Group acquired Magis Financial Partners — a Philadelphia-area practice with four registered representatives and more than $490 million in client assets — from Ascensus, a recordkeeper and third-party administrator, the buyer and seller said March 9. The firms are both backed by PE firm Genstar Capital.

The parties didn’t disclose the terms of the March 1 deal, which comes after wealth management M&A ticked up 1% to 205 deals in 2020 for the eighth consecutive record year in terms of volume, according to investment bank and consulting firm Echelon Partners. Small and midsize RIAs are finding deals to fold into larger parents increasingly attractive in recent years.

According to Magis President Steven Zimmerman, Cetera’s “proven growth methodology” and its succession-planning resources “aligns the interests of all stakeholders and frees us of the day-to-day burdens of managing an RIA,” Zimmerman said in a statement. “We can deepen our focus on helping more clients on their journey to financial wellbeing.”

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Magis has been affiliated on the BD side with Cetera Advisors since 2016, but the deal moved the hybrid RIA’s ownership to the BD’s parent firm from FuturePlan by Ascensus, formerly known as United Retirement Plan Consultants. Ascensus scooped up the RIA in June 2019 as part of its purchase of United Retirement, according to Magis’ SEC Form ADV brochure.

Genstar and Aquiline Capital Partners acquired Ascencus in 2015, later adding Atlas Merchant Capital to the ownership at a 25% stake four years later. Ascensus bought United Retirement “for its TPA services,” and Magis “provides advisory services that are not a part of Ascensus’ core business,” Chief Corporate Development Officer Raghav Nandagopal said in a statement.

“We chose to sell MAGIS upon finding the right partner in Cetera,” Nandagopal said.

The deal comes a month after Cetera reached a different agreement to acquire certain assets of Voya’s wealth manager and add about 900 advisors to its ranks of some 7,543 across five IBDs in the network. Magis works with over 350 households in its client base, according to Cetera.

The firm is “thrilled” to support Magis “in a more direct capacity,” Brett Harrison, who is CEO of Cetera Advisors and the head of the network’s traditional independent channel, said in a statement. “Whether it’s an acquisition, ownership change or new affiliation, Cetera stands ready to support the full business lifecycle and inspire growth for financial practices nationwide.”