Dan Seivert’s resounding success in RIA M&A deals has the bizarre side effect of squeezing some handgun staff off to new perspectives
Carolyn Armitage and Mark Bruno are gone for mutual benefit, while Echelon Partners roars, feeding the beast of mad buyers and sellers of AIR deals.
Brooke’s Note: Small, high-performing businesses rarely operate by committee. They thrive on the leadership of one or two highly motivated protagonists who make decisions in real time. Although mergers and acquisitions in the RIA sector are exploding, the size of these companies is quite static, if not declining. Sometimes M&A firms swell in size during bear markets as they bide their time doing paid consulting work until buyers and sellers feel like talking turkey. The good news is that anyone who survived the melting pot of performance fees within a certain time frame can write their ticket with another employer. This is what appears to be happening at Echelon Partners as two respected CEOs leave – and may not be replaced.
Echelon Partners’ RIA trading machine is working so hot that two of its well-known non-traders are gone and will not be replaced – at least not until the RIA M&A bull market turns sour.
Mark Bruno left in May and Carolyn Armitage stepped out in June, both for some awesome new gigs.
“We can add another CEO to advise, but… we don’t need to find a replacement as we are more focused on investment banking,” Echelon CEO Dan Seivert said by E-mail.
Manhattan Beach, Calif., Investment bank for RIAs is riding an eighth consecutive year of record deal flow.
It’s all about focus, says Seivert. “The mergers and acquisitions are going so well that we are focusing more on it and less on consulting.”
Indeed, the transactions are as lucrative to conclude as they induce cortisol to live.
For transactions worth up to $ 5 million, M&A advisors can reliably charge fees between 4% and 6% of the overall value of the transaction, according to sources. This roughly equates to a RIA with $ 250 million in assets under their management (AUM). See: As more and more RIAs stack up with M&A deals, Andy Grillo Launches Low-Cost Robotic Service to Help Moms and Dads Fight “Inaccurate” Valuations; color RIA bankers not impressed.
To make a break
Bruno says he wanted his own action, explaining his decision to join New York-based media company Informa as chief executive of wealth management. Informa is the owner of WealthManagement.com.
“[Seivert] is one of the most thoughtful and creative people in this industry. My decision to move on was based on the opportunity I see at Informa, ”he says.
“I’m a builder at heart, and I really love media and heritage businesses, so this is a dream opportunity for me.”
At Echelon, Bruno was a senior compensation consultant. See: Mark Bruno, the “glue” behind InvestmentNews, and sales strategist Julie Parten make a clean sweep, ending the Crain era with their departures
Armitage increases to $ 5.2 billion Minneapolis RIA Thrivent Advisor Network (TAN). She intends to make the RIA hybrid brand a magnet for disruptive brokers who don’t want to start their own practice, she said. CityWire in an interview on June 14.
“While the advisory and investment banking work I have done can be financially and inherently rewarding, it is very transactional in nature,” said Armitage.
“I am particularly looking forward to having a direct impact on a business like I did earlier in my career instead of having an indirect impact like I did through Echelon,” she adds by e -mail.
Seivert says he’ll let the bandwidth of his talents determine how much consulting he does in the immediate future, but he realizes that making deals is the responsibility of the company. purpose.
“We still do both, but investment banking has a higher margin and the demand for these services is very high right now. Our M&A advisory work has reached record levels in 2020 and 2021 will be higher. to that, ”he said.
“Our biggest and most important business is investment banking and their movements didn’t really have an impact as they were both focused on advice,” he adds.
More than 100 M&A RIA transactions have been closed in three months since the start of the year compared to the pace of last year.
“It will only speed up; [this year] is on track for the industry’s eighth consecutive record year, ”David DeVoe, founder and CEO of San Francisco M&A advisory and investment bank DeVoe and Company, said in a statement.
Annual RIA transaction volume surpassed the milestone of the century for the first time in December 2018, a feat repeated in September 2019 and 2020, DeVoe reports.
“We really don’t see a slowdown at this point,” said John Eubanks, director of New York investment bank Park Sutton Advisors. Eubanks declined to comment on recent staff changes at Echelon.
Investment banks underwrite and negotiate debt and newly issued securities, facilitate mergers and acquisitions, corporate reorganizations and succession plans. They often provide a valuation service and advise on the structure of transactions.
The figure goes up or down, depending on the value of the deal.
Echelon employs eight people, all of whom provide consulting services, according to the company. He declined to reveal whether he would be hiring this year.
Rival investment bank Park Sutton employs at least 11 people, according to a LinkedIn research. He added two new employees in February and a third in June, including partner Andrew Matney, most recently a mid-market investment banker at the Wells Fargo office in El Paso, TX.
Park Sutton hired two investment banking analysts in September and November 2020. The company is interviewing to fill two other positions.
Still, Seivert says he feels no immediate pressure to replace Armitage and Bruno, in part because he built Echelon by employing multi-talented bankers, who can act as consultants and valuation experts when needed. .
“Based on our operational experience and our work as consultants, we know more about the industry [than] Transaction-only investment bankers, and given our investment banking skills, we can transact where other consultants cannot. The two companies generate volume for each other, ”he explains.
Other notable moves from M&A consultants this year include Scott Collins, who left TD Ameritrade (TDA) after eight years as managing director of institutional sales consulting.
In January, Collins joined Sacramento, Calif., RIA, Allworth Financial as the new Senior Vice President (SVP) for Business Development, Mergers and Partnerships. See: Allworth sells at a white-hot valuation.
Jeremy Holly left Fort Mill, South Carolina-based LPL Financial in June to become the new development director of the RIA SageView advisory group of Newport Beach, Calif., With $ 130 billion in assets advised.
Holly spent just under 19 years at LPL, most recently as Senior Vice President for Business Development and Financial Solutions for Advisors. See: All-LPL Merger & Acquisition Brings $ 875 Million Business.
Allworth and SageView are teeming with fresh cash following an influx of private equity (PE) investments.
New York-based PE LightYear Capital acquired Allworth in October 2020. A second New York-based PE company, Aquiline Capital Partners, acquired SageView in January 2021.
Prior to joining Echelon, Armitage spent three years as Head of Business and Corporate Management Consulting at LPL Financial.
She also spent 13 years as head of wealth management advisory services at the broker ING Advisors Network. TAN is a subsidiary of the non-profit broker Thrivent.
Thrivent continued its rental of Armitage with the June 2 appointment of Ryan Armock as its new COO. Prior to that, he was Director of Operations in Louisville, Ky., Broker-Trader Private Client Services,
Bruno spent almost a year and a half at Echelon. He also has 17 years of experience in financial media.
Most recently he worked at InvestmentNews under Crain Communication and for a short time under UK firm Bonhill Group after acquiring the publication. See: How InvestmentNews Could Become the Core of US-Based Roll-Up If a UK Investment Banker Manages to Buy It with a ‘Wild Swim’ Across the Atlantic