Aggregator Types
The three main aggregator models
Below is a summary of the three main types of acquirers, although not all fit neatly into one of these buckets. In addition, larger RIAs, banks and other firms are periodically involved in transactions similar to branded acquirers.
Strategic Aggregators
Branded Acquirers
Integrated Platform Provider
Description
Generally take a majority (but not 100%) ownership
Take significant (up to 100%) ownership
Do not take an equity stake; RIAs rent operational support
ADV
Advisory firm may be able to retain independent ADV
Advisory firm becomes part of aggregator ADV
Advisory firm retains independent ADV
Brand and Investment Philosophy
Advisory firm retains brand and investment philosophy
Advisory firm adopts aggregator brand and investment philosophy
Advisory firm retains brand and investment philosophy
Ownership/Deal
Equity provided by acquirer and ownership transition to shared cash flows, sometimes capped or limited by acquiring firm
Majority to 100% stake; 20-30% upfront in cash and acquirer equity
No ownership change; RIA pays ongoing fee
Post-deal Model
Entrepreneur remains independent to grow
Becomes part of a unified whole
Wholly independent with benefit of platform
Representative Aggregators
■ Focus Financial Partners
■ Hightower Advisors
■ Mariner Wealth Management
■ Rockefeller Capital Management
■ United Capital
■ Hightower Advisors*
■ Dynasty Financial Partners
Source: How Independent Broker-Dealers Use M&A to Build their Businesses, Fidelity Investments and Optima Group, Inc. research
*Hightower never enforces conformity with brand or investment philosophy. It is a choice for the acquired firm.
