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Wealth Enhancement Group

TA Associates to Acquire Wealth Enhancement Group

In the second major sale of a PE-backed advisory firm this year, Lightyear Capital is selling its stake in $11.8 billion AUM Wealth Enhancement Group to TA Associates.

TA Associates, a global private equity firm, said Wednesday it was acquiring a majority stake in the $11.8 billion Wealth Enhancement Group, a registered investment advisor consolidator, from Lightyear Capital LLC. 

The deal demonstrates the attention that the RIA industry is getting from ever-larger investors, and follows on the heels of Goldman Sach's acquisition of $24 billion AUM United Capital from owners, including private equity firm Sageview Capital, Bessemer Venture Partners and Grail Partner, earlier this year. Terms of the TA Associates acquisition were not disclosed.

Wealth Enhancement Group will continue to be run independently, and will retain its leadership team, brand and strategy, both firms said in the announcement. 

“Our transaction with TA Associates is another step in the process of nationwide growth. It continues to accelerate growth for our firm, in partnership with a top private equity firm that is totally aligned with our cultural values, strategic vision and desire to intensify our ongoing successful expansion across the country,” said Jeff Dekko, WEG's CEO, in a statement provided to

Lightyear Capital acquired its majority equity stake in Wealth Enhancement Group in 2015, when the wealth management firm had $4.7 billion in client assets, from Northwest Equity Partners. 

TA Associates is a global private equity firm that owns stakes in some 500 growth companies across several industries, including financial services, committing some $2 billion in investments annually. In 2015, TA Associates bought a majority stake in Northstar Financial Services, the owner of Orion Advisor Solutions. 

In an interview Monday, Dave DeVoe, founder and managing director of San Francisco-based consulting firm and investment bank DeVoe & Company, said that other PE-backed advisory firms would “likely benefit from the success story” of the United Capital deal, and that valuations in the RIA space are currently "at an all time high."

He said in an email Wednesday that the deal “is a natural and expected part of the growth process for a firm like Wealth Enhancement Group.” He noted that both firms are “interested in and value the powerful combination of technology and wealth management. WEG has invested heavily in leveraging technology to support both scale and growth within the RIA space — they are one of the leading firms in this regard. And TA has a track record of investing in FinTech.”

Wealth Enhancement Group is a partly employee-owned advisory firm affiliated with LPL for its brokerage business that has over the past six years grown through a combination of organic business as well as targeted acquisitions. It's purchased 13 "culturally-aligned" independent advisory practices during that span and led organic growth of $1 billion each year for the past two years. The firm focuses on mass affluent and affluent retail and institutional investors. Of the $11.8 billion in assets, almost $8.5 billion are in the firm's RIA Wealth Enhancement Advisory Services.

Mark F. Vassallo, managing partner of Lightyear, said in a statement Wednesday that since the PE firm acquired Wealth Enhancement Group four years ago, the latter “has invested significantly in its core operating platform and made 10 geographically diverse acquisitions, increasing assets by 150%, bringing the company into six new markets and doubling the number of offices and advisors.”

Tim Welsh, an industry veteran who runs the consulting firm Nexus Strategy Group, said in an interview Wednesday that the deal “is just another reminder that wealth management is a ‘hot’ sector. Investments are being made even at the top of the markets, when asset values are overpriced because of the market run-up: there is still a lot of interest.” He noted that “as Wall Street continues to struggle and founder and have its own scandals, the independent RIA becomes more attractive.” The “best place” for a Wall Street player to deploy its capital in the wealth management sector is “in independent RIA’s.”

Welsh wagered that the price tag for the deal, whose terms were not announced, was likely about half the $750 million that United Capital's owners got from the Goldman deal, because Wealth Enhancement’s AUM are approximately half that of United’s.

Dennis Gallant, a senior analyst with the Aite Group, a Boston-based research and consulting firm, said in an interview Wednesday that the deal made sense in an advisory marketplace that has become more competitive. Access to TA’s deeper pockets, he said, would enable Wealth Enhancement to develop better infrastructure and provide the “potential to make acquisitions down the road…when it makes sense.” Wealth Enhancement “has great opportunities to expand in a lot of different directions” as a result of the deal, he added.

In an age of ever-larger advisors, he said, there is also the opportunity to “achieve greater scale.”

He noted also that Wealth Enhancement is “still part of LPL, so it could see really strong growth in the super-hybrid marketplace. They have their own RIA but also affiliations with independent broker-dealers.”

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