In her cover story in the Fall issue of NAPA Net the Magazine, Judy Ward reports on what five of the nation’s top DC wholesalers are seeing in terms of advisory practice consolidation.
One topic gets discussed at every meeting Keith Neal has with his plan advisor contacts these days: advisory practice acquisitions. “This topic is coming up in literally every meeting I have with advisors,” says Neal, Boston-based director at MFS Investment Management. “There’s a push everywhere about scale, and sizing up to get it.”
Neal gets asked about it, whether he’s talking with an independent advisory firm or a large national company. “Everybody is saying to me, ‘Hey, if you know anyone looking to sell, I want to buy,’” he says. “They’re asking me, ‘Who can we buy? Who should we talk to?’ There are a lot of people with big checkbooks who want to do deals.”
In his work as a wholesaler, Neal has seen a lot of consolidation. “We used to have a top 300 list of advisors to contact, then it became a top 150 list, then a top 100 list, then a top 50 list,” he says. “My territory is shrinking, but at MFS, they want us to go deeper with the large firms, and provide them with as much support as we can. I’m doing anything and everything I can for the top 50 advisory practices in my territory.”
What’s Driving It
The acquisition trend makes sense for both buyers and sellers, says Mark Conroy, a Charlotte, North Carolina-based vice president at Franklin Templeton. For one thing, he says, both sides get a strong new source of client referrals. The acquirers “have seen the growth of the retirement industry, and they see the projected growth moving forward. And the acquirer is getting a true professional retirement advisory team,” he says. “For the advisors, what they say the most when they talk to me is that they love that they can now get down to doing almost entirely the parts of their job that they love the most: going in and winning plans’ business, building their value proposition, and helping people get to retirement.”
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