In a deal sure to send shockwaves around the DC plan advisor industry, CAPTRUST and Pensionmark have announced a partnership to create a jointly owned RIA run by Pensionmark with a capital investment by CAPTRUST.
Though continuing to operate independently, for now, the combination of the dominant employee and affiliate model aggregators boasts $170 billion in assets and 3,000 institutional clients.
Though the Pensionmark RIA is separate from CAPTRUST and the two entities will offer different service models to clients, Pensionmark advisors will be joining the CAPTRUST broker dealer, leaving LPL. Pensionmark’s President/CEO Troy Hammond commented, “Most of our affiliate advisors joined LPL and IFP to be part of Pensionmark, not the other way around.” He sees little threat to losing many, if any, advisors who do not use the LPL tools; Pensionmark leadership and service groups will stay intact.
So why did two of the most successful DC advisor aggregators join forces? For Pensionmark, it allows them to recruit large market advisors as well as get more aggressive with new technology projects. For CAPTRUST, the partnership offers an alternative model for advisors while giving Pensionmark affiliates easy succession planning. The combined group has more buying power and clout with providers and is, at least theoretically, more valuable than the individual entities.
High-profile BD and RIA roll-ups have traditionally been focused on wealth management advisors with plan advisors an afterthought. The CAPTRUST/Pensionmark combination is the first of what could be other DC focused rollups as plan advisors, like RIAs, find that they need to get bigger or stay very small. It portends interesting times ahead as consolidation hits the plan advisor market just as it has hit the record keeping industry — driven by similar market dynamics but with much different implications.
