Raleigh, N.C.-based RIA Captrust Financial Advisors has picked up its fourth location in North Carolina, grabbing 10-member, five-advisor, $654 million AUM Fountain Financial Associates in Wilmington. The firm already has offices in Raleigh, Greensboro and Charlotte.
The move is the latest acquisition and first of 2020 by Captrust, which added 10 firms in 2018 and 2019 in cities like Atlanta and Boston. In 2018, its acquisitions totaled $1.8 billion in AUM while 2019's deals added $7.2 billion in assets. The Fountain Financial deal brings Captrust's AUM to $18 billion.
"We have been steadily acquiring over the last few years, but that is not what we consider to be our main event,” said Ben Goldstein, Captrust's chief operating officer, noting that the firm instituted a 10-year growth plan in 2017. Instead, Captrust's biggest driver is the company's strong organic growth among its advisors, he said.
"We are not looking to bring on advisors who are solely looking for a payout before retirement,” he said, but rather for “growth-minded advisors who, with access to our suite of solutions and services, can overcome barriers to growth” and contribute to Captrust’s overall success.
Craig Raskin, a spokesman for the firm, said that on average Captrust acquirees grow 15% after joining the firm, largely due to the amount of time they save using Captrust’s human resources and marketing and tech platforms. Raskin said Captrust uses Black Diamond for its performance reporting and WealthView for client account aggregation and financial planning. Goldstein also said Captrust has institutional clients in the Wilmington/eastern North Carolina market whose executives and employees could use its help with financial planning.
Captrust acquires 100% of each firm it acquires, with the acquirees getting a “substantial portion,” of the transaction value in Captrust equity, Goldstein said. Giving equity to joiners is becoming a more important way to inspire a good company culture and retain valuable employees, as Schwab noted in a survey last week.
Unlike peers such as Creative Planning, another frequent acquirer seeking to hit its sweet spot of $80 billion in AUM, Captrust doesn’t have a “specific goal in terms of size,” said Goldstein.
Captrust is an independent, employee-owned firm providing advisory services to high-net-worth individuals, executives, retirement plan fiduciaries, endowments and foundations. With the Fountain Financial acquisition, it now boasts over 330 employees in North Carolina, including over 50 advisors. It has over 650 employees nationwide and $368 billion in client assets under advisement. It also provides investment consulting services to institutional clients from its offices located across the U.S.