Big M&A deal kiboshed after $5B seller loses several teams

Wealth managers who had agreed to a major M&A deal, recruiting move and strategic partnership have dialed it back to a simple collaboration after a slew of financial advisor exits.

Summit Financial Holdings and a private partnership backing it, Merchant Investment Management, will tap into the banking services of Greenwich, Connecticut-based Fieldpoint Private while pulling back from buying the firm’s advisory business, the parties said this week. In January, Parsippany, New Jersey-based Summit had said the acquisition would boost it to about $12 billion in client assets after adding $5 billion from the incoming firm.

It’s not immediately clear whether any transaction took place or whether the reported exits of 10 of Fieldpoint’s roughly 25 advisors to rivals scuttled the deal. Even though nearly every year for the past decade has seen successive record volumes of wealth management M&A, transactions can fall apart if a selling firm’s advisors balk at going to a new firm, according to John Eubanks, a director of investment bank Park Sutton Advisors, which represents RIAs in M&A deals such as a recent private equity recapitalization by a firm with $8 billion in client assets.

“It’s a big aspect of any one of these deals,” Eubanks said. “If they don't have restrictive covenants in place, there's really nothing that can keep them there if they don't like the deal. Typically, the selling firm will work this stuff out before going to market and before entering into discussions with potential buyers.”

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Representatives for the parties to the deal didn’t make any executives available for interviews.

“We engaged in conversations with Summit when we made the decision to reposition Fieldpoint as a private banking solution for independent advisors, while stepping away from ownership of advisory practices,” Executive Chairman Tim Tully said in a statement. “Though Fieldpoint’s advisors are making independent decisions on transitioning, our growth strategy of delivering private banking services to Summit's advisors and other independent RIA firms around the country is progressing well.”

“After an extensive due diligence process, a mutual decision was made to not move forward with the acquisition of Fieldpoint's advisory business,” Summit CEO Stan Gregor said in a statement. “Summit and Fieldpoint Private will focus on further development of their strategic partnership, with Summit's advisors continuing to leverage the private banking capabilities offered by Fieldpoint.”

News outlet AdvisorHub first reported the breakdown of the acquisition, as well as the departures of multiple teams from Fieldpoint to RBC, UBS and Wells Fargo Advisors since the beginning of March. In the latest exit on April 1, a Stamford, Connecticut-based team called the Landmark Group, with $6 million in annual revenue and $1.2 billion in client assets, joined Rockefeller Capital Management, the publication reported.

Advisor Tammi Lauder, a managing director of the team alongside William Christian, declined an interview request when reached by phone.

The team with four advisors and a director of operations now reports to Michael Parker, the managing director of Rockefeller’s northeast region.

“The Landmark Group brings decades of combined experience and integrated relationships, and we’re delighted to welcome its members as Rockefeller continues strategic expansion in a critical U.S. metro center,” Parker said in a statement.

While it’s unusual for firms to announce an M&A deal without completing it, such acquisitions always lead to recruiting fights with high stakes for the buyers and the question of retention bonuses for the incoming teams. After stumbling below its target for incoming advisors and client assets in the wake of its last major acquisition in 2017, LPL Financial secured commitments from advisors with over 95% of the client assets from Waddell & Reed last year.