Jeff Dekko, chief executive at Wealth Enhancement Group in Plymouth, Minn., says his hybrid RIA has big expansion plans, but he denies buying businesses simply for their size. He wants the firm to become a national brand known for its financial planning capabilities.
“We’re looking to find businesses that have great commonalities with the way we view clients, the way we think about planning as its importance to the relationship,” Dekko says. “I think a lot of people are just buying firms to get big, and that’s a big mistake.”
Wealth Enhancement Group is looking for companies with both strong financial planning capabilities and a shared interest in having a larger national presence in that space. Dekko figures the firm will need $25 billion in assets under management in the next five to 10 years to make its mark, up from nearly $6 billion today. The firm expects to close its second deal this year with its acquisition of Houston-based hybrid, Sound Financial Solutions, in early August. They added HHG & Co. in Darien, Conn. in June.
Deals in about the last three years have added $2 billion in assets and helped expand the company’s presence to Iowa and Illinois, Dekko says. But acquisitions aren’t the only part of its growth strategy; the company expects to keep pace with organic asset flows of 15 percent annually, he adds.
To build the firm’s financial planning expertise, Dekko has staffed up with CFPs.
Of the firm’s 165 employees, about four dozen are CFPs; a handful are lawyers and CPAs. Even Dekko, who already held an MBA from the University of Chicago when he joined the firm as an investor in 2003, decided he needed to get a CFP if he was going to understand the processes around which the firm was building its core functions. (Dekko has a strong investment and finance background, but his experience before taking over at Wealth Enhancement Group came from work with non-FA companies, including General Mills and an engineering firm he helped sell to Procter & Gamble.)
Wealth Enhancement Group divides its clients among 24 teams that are served by a financial planner and an advisor who handles the relationship (and who usually holds a CFP; Dekko says the advisors are chiefly promoted from within the firm’s ranks of financial planners who all hold CFP marks). The company holds weekly roundtables where staff discusses tricky investment problems that have cropped up in a particular client’s portfolio, with the idea of crowdsourcing a solution. Junior members of the firm are invited to sit in and learn. The roundtables give the client the sense that their advisor’s work is backed up, Dekko says.