MAI Capital Management, a Cleveland-based RIA aggregator with approximately $12.2 billion in assets under management, announced two acquisitions already this year, representing its fifth and sixth deals since Galway Holdings took a majority stake in the firm last September.
MAI has acquired $163 million Monarch Business and Wealth Management, led by CEO Barry Klarberg, and its strategic partner, Regal Wealth Management. The deal expands MAI’s Sports + Entertainment Division, launched in September 2020 and seeded by its acquisition in June 2019 of MTX Wealth Management, founded by Steve Trax, who now leads the division.
Rick Buoncore, managing partner at MAI, said MAI has been in the sports and entertainment business for almost 50 years and counts about 500 athletes across every sport, representing about $3 to $4 billion of assets, as clients.
MAI also announced this week the addition of Patrick Gingras, a Madison, Conn.–based advisor with about $725 million in assets to its team. Gingras was most recently a co-president and private wealth advisor for Brenton Point Wealth Advisors. The acquisition gives MAI a presence in Connecticut, in between its existing New York and Boston regions. “It’s a natural pathway to New England,” Buoncore said.
Buoncore said the two acquisitions fit into MAI’s overall strategy, which is to provide a sort of home office for advisors and take over a lot of the less desirable tasks that have to get done.
“We say, ‘Look, if you want to come join us, you’re still going to run your region, but more likely you don’t have to worry about compliance, technology, investments. You just have to worry about taking care of your client and getting more clients,” he said.
Another part of MAI’s strategy is to expand into new geographies and help advisors in those regions identify tuck-in opportunities.
“We can draw a circle around Patrick and see if there are other advisors in that region maybe who want to retire or maybe who want to be partnered up with someone and we can put them under Patrick’s leadership under the MAI umbrella,” he said.
These will typically be advisors with under $500 million in client assets, and Buoncore said his firm is currently working on three to four tuck-ins in Cleveland, one in Florida, one in St. Louis and one in Arkansas, although they may not all go through.
MAI is also helping its advisors grow organically through its referral business, via Fidelity and Schwab’s programs. Last year, the firm had close to $500 million of net new business coming from those channels, he said. These tuck-ins will only help with that.
“We think that’s the tip of the iceberg for us,” he said. “The closer we are to the client in that market the better we think our penetration will be. So the more geography, the closer they will be to that individual office of Fidelity or Schwab which we think will drive more and more business.”
MAI’s new parent, Galway, the holding company for EPIC Insurance Brokers & Consultants, an insurance brokerage, and Jencap Holdings, a wholesaling insurance company, will also help win referrals, Buoncore said. EPIC has 78 offices around the country, and the MAI team is in the process of introducing themselves to those offices and hopes to eventually have sister offices in those location to serve clients that they bring to the wealth management firm. “This is like my own private proprietary distribution channel,” he said.
MAI does have its own insurance subsidiary, MAI Insurance Solutions, dedicated to planning-based insurance services. And Buoncore has aspirations for expanding into new verticals this year, including the 401(k) business.
“The business itself isn’t what gets me excited,” he said. “It’s the business plus the eventual rollout those people will have that we’ll be able to help people when they leave their 401(k), so it becomes a feeder to the base business in the meantime. But I think as a solution set for our clients, it’s important.”
He’d also like to add a trust business sometime this year to meet client demand for such services.
“As we go up-market, more and more of our clients are asking us to be their trustees, and it gets complicated being an individual trustee,” he said. “So having a trust company of some sort—whether it’s a private label with one of the trust companies out there today or whether it’s our own—would make some sense.”
Several RIAs and broker/dealers have brought trust company services in-house in recent years. Last May, Moneta, a St. Louis–based RIA, launched its own trust company. Creative Planning has its own trust company, as does Mercer Advisors, via its acquisition of Kanaly Trust in 2016. Kestra Financial now has a trust company subsidiary, Arden Trust Company, through its acquisition of Reliance Trust Company of Delaware in December 2018. The firm is working more closely with Arden to package trust services for its 2,400 advisors across its wealth management businesses. Advisor Group, a large broker/dealer network, also has a trust subsidiary, Premier Trust, which came over as part of its acquisition of Ladenburg Thalmann.