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AssetMark’s Latest Acquisition Provides an Entrée into Bank Trust Channel

The turnkey asset management platform’s deal with OBS Financial provides a “low-risk entry point” into the $500 billion bank trust channel.

Turnkey asset management platform AssetMark closed on its acquisition of fellow TAMP OBS Financial for $20 million this week, which has relationships with over 300 financial advisors and 21 banks. AssetMark believes the deal provides a “low-risk entry point” into the bank trust channel, where it’s looking to expand market share.  

“We have the opportunity to analyze OBS's client base to understand the specifics of how those advisers manage portfolios, how they use technology and what that technology suite looks like,” said Charles Goldman, president and CEO of AssetMark, on the firm’s fourth quarter earnings call last week. “It gives us a chance to really study and understand the bank trust opportunity and then bring our set of capabilities to those advisers and their investor clients.” 

The bank trust channel, which includes regionals and community banks, is a $500 billion market, Goldman added. Bank trust officers work with financial advisors and clients on issues surrounding inheritances, including trust and estate laws. 

Last November, AssetMark outlined plans to expand into new channels, naming Matt Matrisian as chief channel officer in addition to his position as senior vice president of strategic initiatives. Matrisian is focused on expanding the firm’s presence in the RIA, office of supervisory jurisdiction and bank trust markets. 

OBS advisors, bank trust officers, and clients will be absorbed into AssetMark in the coming months. Advisors will receive consulting services from its Advisor Benefit Program along with supplemental support from AssetMark’s service teams, which will offer hands-on guidance and operational support, according to a statement. Echelon Partners advised on the deal. 

AssetMark launched its initial public offering over the summer. The firm reported a net loss for the fourth quarter of $2.7 million, or 4 cents a share. Adjusted net income was $19.7 million, or 27 cents a share, for the quarter, up 38% from a year ago, on total revenue of $111 million, up 14% from the year-ago period. 

Net flows for the fourth quarter were $1.7 billion, excluding Global Financial Private Capital’s advisor-managed business, which saw $600 million of redemptions. AssetMark acquired Global Financial Private Capital in 2018. During the quarter, over 200 new producing advisors joined the AssetMark platform, bringing its total advisor count to 7,900. But the firm categorizes 2,200 as “engaged advisors,” or those with more than $5 million in assets on its platform.

The firm reported a 25.2% annualized production lift from existing advisors for the fourth quarter, “indicating that advisors continued to grow organically and increase wallet share on our platform,” its earnings release said. 

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