Geoffrey Schock joined the wealth management industry to serve clients, but he ended up becoming a chief compliance officer and spending much of his time on regulatory issues.
"The more you get into this business, the more it takes you away from the very thing that is most important," Schock said in an interview.
Now that his firm, Bellevue, Washington-based registered investment advisor Trutina Financial has been sold to RIA aggregator Captrust Financial Advisors, Schock can spend more time with clients. Captrust can handle more of the compliance for him, he said, and take care of pesky administrative tasks for his team of 15, like marketing for client-facing events. That frees up his team to grow its books faster and offer clients more and deeper services, he said.
"The greatest gift you can give really anybody is your time," added Matt Myers, the senior partner and chief strategy officer at Trutina. "So what Captrust does is give us the ability to have 30% to 40% more time."
In a very literal sense, for financial advisors like Schock and Myers, time is money. Although large numbers of financial advisors continue to break away this year from traditional broker-dealers and particularly the wirehouse model, full independence can feel limiting, too, if an advisor or team lacks the resources to offer competitive services. RIA aggregators like Captrust, which offer those benefits of scale for advisors who take on employee status, are seizing upon this situation and expanding fast.
The deal closed on Nov. 15, Schock said in an interview. It adds to a buying spree of several other RIAs that Captrust also purchased earlier this year,
READ MORE:
This latest acquisition also means Raleigh, North Carolina-based Captrust, for the first time, will have an office presence in the Pacific Northwest, Currin confirmed in an email. Previously one advisor at Captrust had divided his time between Washington and North Carolina, Currin said.
The move came about rather effortlessly, both parties told Financial Planning, and in some ways was fortuitous — but also reflects the evolving strategy of firms in the M&A market like Captrust, as they race to establish a national presence.
When the first choice is 'the one'
The leaders at Trutina decided around two years ago that they needed help growing the firm faster. They engaged Dan Erichson at Park Sutton Advisors to help them find an appropriate partner for a deal, and it so happened that the first option he recommended was Captrust, Schock said.
"Matt and I looked at each other and said, 'Everything they're about is everything we've always tried to be about,'" Schock said.
Although they explored other options after that initial meeting in the first quarter of 2023, it soon became apparent that Captrust was the best fit.
Trutina, whose name means 'balance' in Latin, specializes in three business lines where it strives to provide balanced holistic financial planning: wealth management for families, retirement plan services and "corporate cash management for business clients, endowments and foundations," according to a press release on the deal. Those all happened to be the exact same three business lines that Captrust offered.
"We met a lot of other types of companies that did other things outside of our core competencies," Myers said.
The culture at Captrust also appeared to resonate.
"Every single conversation we had with them was incredibly authentic," Myers said. "We talked about things so far outside of business — about caring for people and family, and growth and life, and just the things that matter. It made talking business easy."
Captrust's foundation, which allows employees to apply for grants that help them support nonprofits that help children, also appealed to the Trutina staff. Myers said Trutina, for a long time, had a wall and table in its office displaying its variety of commitments to local community groups.
"I'm not surprised that it becomes an asset when people see that you're helping others," John Langston, an investment banker in the wealth management sphere who leads Republic Capital Group, said in an interview. He added that Captrust will be honored this week at an event in New York he is hosting for industry players demonstrating exemplary community service.
Where Captrust is headed next
Captrust's victory in the Seattle area is a major milestone to help it open the door to this market, according to recruiter Rush Benton, the firm's senior director of strategic growth.
"If you think about Seattle, and the industries that have been there for many years, the wealth [that] has been created. It's just a fabulous market," Benton said.
Benton added that the presence of tech giants like Google, Amazon and Microsoft in the region meant several businesses had become successful catering to such firms.
"I mean, it's an untapped, huge market." he said.
Reflecting that, Trutina has a fairly diversified client base, Benton said.
"And they also have expertise in the retirement plan advisory business, which is ... a very strong part of our business plan," he said.
Langston added that the move resembles ones by other major aggregators lately, which are trying to acquire more in major metro cities.
"There's a real focus to truly nationalize and try to have a presence in all the major markets," he said. "Sometimes the terminology that's used is to focus on NFL cities. [Cities] that have an NFL team because they're large enough in terms of the population and economic base."
Although some people still think of Captrust as a firm based in North Carolina, that's changed rapidly in recent years, Langston said.
"Firms like Captrust and other large firms are quietly becoming the largest players in states and cities that they have no historical base in," he said.
When he reviewed the data in the past six months or so, Langston noticed that the firm had become the biggest of its class in the state of Texas.
"
Captrust does not yet have all three of its business lines represented in the top 35 U.S. metro markets, but it has at least one business line represented in each of the 35, Currin confirmed in an email. And it plans to keep growing within markets that it's already established in.
READ MORE:
What often happens with deals like this is also that they lead to "tuck-ins, post acquisition," Benton said, referring to a ripple effect of other advisors or RIAs in the region who know the team that was acquired and become curious about Captrust themselves — leading potentially to another deal in the near future in the same market, or to more advisor hiring.
Captrust isn't in a hurry, though, and hasn't been in the past with this market, Benton added — there were other prospects that didn't didn't work out for any number of reasons over the years.
"If you try and force it, you're more likely to make a mistake. So we would like to be very patient when we do these things, and we're thrilled that the stars aligned and we found the right firm."
