Throughout the pandemic, DeLynn Zell usually discovered herself taking walks and fascinated with the way forward for Bridgeworth Wealth Administration, a agency she had based greater than a decade earlier than.
The Birmingham, Alabama-based enterprise had grown as rapidly as she might hope. Since its begin in 2008, it had come to sit down on greater than $2 billion in property underneath administration.
The difficulty for Zell, who’s additionally the agency’s CEO, was that she could not determine the following step.
“You understand, $2 billion underneath administration was huge,” Zell stated in an interview on Friday. “However at this time, I feel our competitors, and what we see coming into the Southeast, goes to be companies with $5 billion, $10 billion, $20 billion. Even a number of the mega RIA companies wish to come into the South. So I am making an attempt to play offense, not protection.”
The reply she was searching for got here within the type of a podcast interview featuring Brent Brodeski, the founder and CEO of Rockford, Illinois-based Savant Wealth Administration. Throughout one among her walks through the COVID-19 shutdown, Zell heard Brodeski explaining to trade guru and XY Planning Network founder Michael Kitces how he had acted on his concepts and targets for wealth administration.
All of it sounded strikingly acquainted.
“He was sharing how far alongside they’d come and, lo and behold, we had made most of the similar strides he had,” Zell stated. “I used to be pondering, he is about 5 years forward of me and, you understand, I need to construct out precisely what Brent has constructed out. And I stated, ‘I need to meet this man.'”
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A partnership of like minds
Zell stated she will be able to now level to the podcast because the essential second resulting in Savant’s plans to amass Bridgeworth later this yr. However after all her determination to hitch Savant wasn’t made solely in response to a podcast.
There have been many subsequent discussions, in addition to in-person conferences in Chicago. What rapidly turned evident was that the 2 companies shared the identical fundamental strategy to wealth administration. Each are fee-only or largely fee-only companies. (Bridgeworth retains the vestiges of a brokerage enterprise.) And each insist that advisors preserve the excessive trade requirements by changing into licensed monetary planners — the gold customary certification for advisors — or attaining different skilled distinctions.
“I keep in mind pondering, he sounds similar to me,” Zell stated. “And that is bizarre. As a result of he is in Chicago, and I am in Alabama.”
Zell acknowledged the approaching marriage of Savant and Bridgeworth is as a lot about what differentiates the 2 companies as what they’ve in frequent. She stated she was notably attracted by the robust investments Brodeski has helped make into Savant’s expertise.
Becoming a member of forces, an trade development
Savant’s buy of Bridgeworth was brokered partially with the assistance of the wealth administration M&A consulting agency DeVoe & Firm. David DeVoe, DeVoe & Firm founder and CEO, stated in an interview Friday that he thinks the Bridgeworth deal is a part of a development of impartial RIAs seeing advantages to becoming a member of “meta-consolidators” like Savant.
DeVoe stated small advisory companies usually lack the IT employees wanted to supply clients with the technological methods and interfaces now anticipated in virtually each aspect of the monetary providers trade. That is the place massive companies, with their capability to have workers specialise in sure capabilities, take pleasure in an actual benefit, he stated.
“Many advisors want to contemplate whether or not they need to proceed to do it on their very own or in the event that they need to be a part of a bigger group to unlock extra energy and search the advantages of scale,” DeVoe stated.
Zell stated she additionally felt drawn to Savant after seeing that it had integrated providers like tax planning and in-house tax preparation. These are the kinds of choices, Zell stated, that rich purchasers are coming to count on from wealth managers.
“There was nothing mistaken with us,” she stated. “We weren’t able the place we needed to promote. I informed the staff after I introduced this that we have been robust financially and operationally as we have ever been.”
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Progress by way of M&A
Savant, for its half, can now add one other feather to its mergers and acquisition cap. Its buy of Bridgeworth will mark the eighth deal it has pulled off this yr, bringing its property underneath administration to $21 billion. Three of the acquisitions — together with Bridgeworth with $2.2 billion in purchasers property — had $1.5 billion or extra underneath administration.
Savant introduced in Could that it had acquired Domani Wealth, a agency in central Pennsylvania with seven advisors and $1.53 billion in shopper property. And it went public in February with its buy of Capital Instructions, an Atlanta-based agency with 25 monetary advisors and $3.3 billion underneath administration.
Altogether, Brodeski stated in an interview Friday, Savant’s 2023 offers will deliver its advisor headcount to round 200 by the tip of the yr, together with practically 60 who’re coming from Bridgeworth. And the addition of Bridgeworth’s areas in Birmingham and Huntsville will imply Savant will probably be working 37 places of work in 14 states.
Brodeski stated the earlier acquisition of Capital Instructions in Atlanta earlier this yr had him and his colleagues searching for different alternatives within the South.
“So this was a extremely good complement to the place we’re at and the place we’re heading,” he stated.
Brodeski stated mergers and acquisitions will proceed to play a big function within the development of Savant.
“There will probably be extra we’ll handle this yr as properly on the M&A entrance,” he stated. “However we’re actually curating, as a result of we need to make certain they are a actually good match as a result of, you understand, we’re enjoying a protracted recreation. We’re not trying on the subsequent few years.”
Girls in management
Bridgeworth Wealth Administration was based in 2008 by Zell, who had beforehand labored for the Lincoln Monetary Advisors affiliate First Monetary Group of the South. Savant, for its half, is usually owned by Brodeski and different workers and has backing from a pair of personal fairness companies: Kelso & Co. and the Cynosure Group.
Zell and eight of her colleagues who now personal Bridgeworth turn out to be half house owners of Savant, as will 5 monetary planners now working at Bridgeworth. Zell may have a seat on Savant’s board.
Zell stated that possession construction was one other a part of Savant’s attraction. She additionally famous that each companies custody shopper property with Charles Schwab, a reality that ought to make it simpler to maneuver them over.
She stated the vast majority of her agency’s property are held in custody on the impartial broker-dealer LPL Monetary. However she does not foresee any nice problem in transferring these over as properly.
One advantage of the deal for Savant, she stated, is the big presence of ladies inside her agency. They make up 67% of her agency’s administration staff and 35% of its advisors.
“Folks usually ask me, ‘How do you appeal to girls advisors?'” Zell stated. “What I inform them is that what you have to have is females in management roles. Girls have gotten to see different girls in management roles for them to have the ability to see their trajectory into the career.”