Fast-growing roll-up firm United Capital Financial Advisers has bought the advisory division of StanCorp Financial, pushing United's total AUM just past $15 billion.
The lift-out, completed for undisclosed terms, brings seven new planners into United Capital's fold. Collectively, they will open six new offices, the firm says.
StanCorp spent the last couple of years buying up separate advisory practices in order to build its wealth management division before deciding to sell the unit, says Matt Brinker, senior vice president of partner development and acquisitions at United Capital.
"They felt like they had an obligation to deliver the practice to a firm that would be as good, if not better stewards, for the advisors and the clients," Brinker says. "We fell into that category."
Separately, United Capital also is entering the Arkansas market with the acquisition of Hutchinson Financial, in Little Rock. The firm did not reveal terms of the deal, which includes the firm's founder, Eric Hutchinson, who, like the StanCorp advisors, joins United Capital as an employee.
With clients in 255 households in Arkansas and Texas, Hutchinson manages approximately $171 million in assets, according to United Capital.
NEW TURF
The StanCorp acquisition marks the first time that United Capital has bought an entire advisory practice from an insurance company, Brinker says. However, given that the insurer grew its advisory practice by recent acquisitions, Brinker says, the planners are not insurance-centric in their work.
"These advisors come pre-disposed to a wealth management culture, not being, frankly, born from an insurance culture," he says. "So, culturally across the board, all of the advisors immediately got our financial life management offering."
United Capital recently rebranded away from using the term "wealth management" in favor of, "financial life management." Finding the right cultural alignment was key to getting the deal done, according to Brinker.
With the two deals, United Capital will have 74 offices nationwide.
The former StanCorp advisors, with their respective office locations, include Garth Scrivner and Sara Prada in Albuquerque, N.M.; Paul Messiter in Ann Arbor, Mich.; Duane Wimer in Indianapolis, John Wyckoff in Portland, Ore.; Erin Eddins in Lynnwood, Wash.; and Cheryl Bott in Tampa, Fla.
Having added $3 billion in AUM thus far for 2015, Brinker says United Capital is having a record year.
The differences are many between United Capital's approach to growth and that of other large planning firms, such as its well-known competitor, aggregator Focus Financial, Brinker says.
DIFFERENT STRATEGIES
For one thing, the average age of United Capital advisors is 48, while Focus tends to bring older advisors into its network, he says. And, while United Capital buys firms outright, converting advisors to employees, Focus takes a piece of a firm's revenues in exchange for helping them grow and lets firm founders continue to run their operations.
"We are always going to be measured against them," Brinker says. "People do have trouble differentiating between our approaches."
Although Focus and United Capital employ different strategies, he says, both are aiming to solve the industry's succession crisis by giving advisors a chance to be part of larger organizations that can help them transition their practices to new owners.
With that common goal in mind, Brinker says, "We wish nothing but the best for them. We hope they are wildly successful."
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