Cleveland, Ohio–based MAI Capital is acquiring HW Financial Advisors, an affiliate of accounting firm Howard, Wershbale & Co (HW&Co) in Beachwood, Ohio. MAI Capital made the announcement Wednesday.
HWFA will continue its relationship with HW&Co but under the new management of MAI Capital, according to the announcement.
HWFA is a 20-year-old registered investment advisor managing $700 million in client assets and headed by Stephen Rudolph, who formerly worked with MAI in the 1990s. Rudolph will become a managing director at the close of the deal sometime in the first quarter.
“We are excited to welcome [Rudolph] back to MAI and work together to enhance our presence within Cleveland and beyond,” said Rick Buoncore, managing partner at MAI, in a statement.
Details of the deal were not disclosed, and the transaction is subject to customary closing conditions.
MAI is a leading acquirer, said David DeVoe of DeVoe & Company.
“Their model is resonating with many sellers, as they are an RIA - just like the seller - which can feel more comfortable than selling to a consolidator. They were one of the most active RIAs as a buyer in 2020 and seem to be on track to sustain that through this year,” he said.
MAI Capital has made 10 acquisitions, including HWFA, since 2017. Three acquisitions occurred in 2020; it bought Smith Capital Management in Little Rock, Ark., Greenway Family Office in St. Louis and Grisanti Capital Management in New York. Another firm, J.M. Hartwell in Manhattan, was acquired Dec. 31, 2019 but announced Jan. 2020.
The firm is backed by a minority investment from Wealth Partners Capital Group.
DeVoe added that the sale of a firm with $700 million in client assets such as FWFA is an example of the wider trend in the midsize RIA market.
“The post-Covid surge of activity was led by $1 billion plus sellers. This is being followed by an increase in mid-sized sales, which will likely run through the next two quarters,” said DeVoe.
“This deal underscores the clear influence that professional buyers are having on the record-levels of M&A activity in the wealth management industry right now,” said Mark Bruno, managing director of Echelon Partners.