The CEO of a 41-year-old independent brokerage with about 250 financial advisors and $4 billion in client assets found his succession plan in a family office.
Orlando-based
International Assets will keep the same management, brand, clearing firm, custodian and other operations in place under the deal. Cofrancesco, 60, plans to step down as CEO in five years but remain involved with the business, he said.
"The first thing it allows us to do is have a definite plan of succession — you have to have that, whether you're an individual practitioner or firm," Cofrancesco said. "I can't tell people I'm going to be here forever. I wanted to make sure there was continuity."
The family office will provide Cofrancesco's firm with growth capital for potential acquisitions or recruiting and additional back-office aid such as human resources. RIAs and some family offices have, in turn, identified
"A lot will be looking to acquire broker-dealers so that they will have a broader offering for advisors who aren't just fee-based or fee-only," he said. "A lot of the larger RIAs have actually started broker-dealers or acquired broker-dealers for that reason. The multiples haven't reached the same levels for broker-dealers as RIAs."
Family offices deriving from fortunes in finance or making deals in wealth management or adjacent fields are displaying interest in more acquisitions in the industry, according to Peter Nesvold, a partner at investment bank
"It's an industry that they know very well, and it has served them well over time," he said, describing
As the No. 39 firm on
With many smaller and midsize independent wealth management firms
"Brownhelm has a deep history in financial services, and we have tremendous respect for what Ed has built here and the company's robust performance under his leadership," Max Weber, Brownhelm's director of investment strategy, said in a statement. "IAA is a great company and we look forward to working with Ed and his outstanding management team to continue to grow the business and present new opportunities and additional support to IAA's network of advisors."
The two sides met each other about a year ago through a mutual friend who consulted each of the firms about a potential business transaction, according to Cofrancesco. After launching International Assets in 1982, Cofrancesco said he's "more energized than I have been for a long time" by the deal.
"I've always been one of these high energy, optimistic and upbeat people," he said. "I like collaboration, and this gives us collaboration in a collegial environment, as opposed to being out there on your own by yourself. It makes me super-energized."