In its third deal in as many weeks, Mercer Advisors has agreed to acquire Financial & Investment Management Group, a registered investment advisory firm managing $600 million. It’s the latest in the firm’s bid to create arguably the first true national RIA firm.
The fast-growing RIA said on Monday it was acquiring Sigma Investment Management Company, a Portland-based firm managing more than $500 million, a week after it announced it was buying Beacon Wealth Management, a New Jersey-based RIA managing $230 million.
The newest addition of the FIM Group grows Mercer’s assets under management to some $14.5 billion and expands Mercer’s geographic footprint into new markets.
Mercer’s advisors primarily work with high-net-worth and ultra-high-net-worth families, and that requires an advisor be in close proximity to the clients, said Dave Barton, the vice chairman of Mercer Advisors who leads the company’s mergers and acquisitions. Barton was the recipient of this year’s Wealthmanagement.com Industry Award for Individual RIA Firm Leader: M&A Leader of the Year.
“You just can’t do it remotely, we don’t believe in [that],” Barton said. “So we’re taking on the additional cost structure to be close to clients.”
Founded in 1984 and headquartered in Traverse City, Mich., FIM Group also has offices in Onalaska, Wis. and Kahului, Hawaii.
Hawaii in particular was of interest to Mercer, as it gives the firm a foothold where they’re few others. The firm already had clients living there, and some with second homes. But smaller, unique markets are difficult places to build a wealth management office from scratch. “Strangers just do not come in there and plant their flag,” Barton said about advisory firms in Hawaii.
Moving into more remote locations via acquisition is a strategy Mercer will continue to pursue, said Barton.
Mercer “desperately” wants to open offices in North Carolina and South Carolina, as well as Nashville, he said, and is looking into acquisition opportunities in Florida and Texas. There is some urgency to find those opportunities, too, since other consolidators are pursuing a similar strategy. “We want to get in front to that tidal wave and not be behind it,” Barton said.
He thinks Mercer has a head start, especially on new RIAs with plans to grow inorganically. Although Mercer has completed 19 deals in only about 3 years, it was expanding and operating new offices around the country for years before its acquisition spree. The RIA, founded in 1985, now has a total of 35 offices.
“Those people that think they’re going to do it overnight? Good luck, it took us 10 years to do this,” Barton said.
FIM Group is a fee-only advisory firm that, like Mercer, works with clients on their needs beyond investment management and financial planning in areas to include taxes and trusts. Paul Sutherland founded the firm and will remain its president and chief investment officer after the deal closes.