An RIA Megamerger Is Coming

By Charles Paikert

A popular parlor game among wealth management executives is handicapping which two giant RIAs will reshape the industry by joining forces. Such a megamerger is likely to happen in the next 12 to 36 months, according to top industry executives surveyed by Barron’s Advisor.

A combination of two of the largest wealth management firms is “inevitable” says Brent Brodeski, CEO of Savant Wealth Management. That’s because of the huge advantages that massive size, scale and cost-savings would bring to a still fragmented marketplace

“We call this the coming consolidation of the consolidators,” declares Chip Roame, managing partner of Tiburon Strategic Advisors. “Right now, there is so much private equity available, dozens of consolidators have arisen. But someday, those PE owners will seek to grow faster and/or exit, and want faster scale, and that will lead to a major deal.”

A megamerger “solves a lot of issues around scale and national reach,” says Karl Heckenberg, a veteran deal maker and the former CEO of Emigrant Partners and Fiduciary Network. “It also solves some succession planning for firms like Creative Planning or Mariner, both of which are phenomenal businesses individually. It would also get the combined firms closer to having a public market option to access permanent capital.”

Indeed, when industry executives were asked which two RIAs were most likely to be involved in a megamerger, Creative Planning and Mariner Wealth Advisors were mentioned most often.

Both firms are based in Overland Park, Kansas, majority-owned by ambitious entrepreneurs, considered to be among the industry’s best run businesses and have been aggressive serial acquirers for the past decade.

According to the most recent forms the firms filed to the SEC, Creative Planning has over $130 billion in assets under management and Mariner has approximately $66 billion in AUM.

“The noise surrounding Creative and Mariner has been getting louder,” says Jay Hummel, a partner at Wealth Advisor Growth Network, who is also based in Overland Park. “The size and profile are a good fit. It’s not a pipe dream. I could absolutely see it happening.”