Several months after it was acquired by the global private equity firm TA Associates, Wealth Enhancement Group, an independent registered wealth advisor, announced it is making its own acquisition of RCL Advisors, a New York-based RIA with nearly $1.4 billion in advisory assets. It’s the firm’s 14th acquisition in six years.
According to Wealth Enhancement Group CEO Jeff Dekko, the acquisition is another step forward in strategic growth, with the RCL office being its second in Manhattan and 28th overall. Dekko says the addition will further establish Wealth Enhancement’s presence in the tri-state area (the firm is based in Minneapolis).
“Our national growth strategy has helped us build a team of talented financial advisors across a diverse geographic footprint, all of whom have the same focused, entrepreneurial DNA that we do,” he said. “RCL Advisors is a perfect fit with our team, and we have every confidence that they will be able to leverage our centralized operational and investment management platform to continue to grow their presence in this key market.”
This latest acquisition is the newest development in a significant year for Wealth Enhancement Group, which was founded in 1997 and now serves clients throughout more than 40 states. In mid-July, private equity firm Lightyear Capital reportedly sought a buyer for Wealth Enhancement Group, which it had purchased in April 2015 (in May of this year, Lightyear also sold its majority stake in Advisor Group for a deal between $2 and $2.5 billion).
Lightyear had acquired a majority equity stake in Wealth Enhancement from Northwest Equity Partners, and the RIA grew significantly in the intervening years; when it left Northwest in 2015, Wealth Enhancement had $4.7 billion in client assets, but as of Sept. 30 it had approximately $13.6 billion in client and advisory assets. Only a few weeks after reports of Lightyear’s interest in a sale, TA Associates announced it was purchasing a majority stake in Wealth Enhancement Group, with the firm keeping its leadership team, brand and strategy, and independence.
TA Associates’ majority stake purchase in the firm was one in a number of high-profile acquisitions of sizable RIA firms this year from large investors, including Goldman Sachs’ purchase of $24 billion AUM United Capital in May. M&A activity among RIAs has been consistently hot throughout the year, with a DeVoe & Company report earlier this month indicating that deals had already exceeded the levels set in 2018, making this the sixth successive record year (the number of third quarter deals this year also set a record for the quarter with the most M&A activity among RIAs; the previous record was just one quarter earlier).
RCL Advisors employs 12 people, including five financial advisors, with a focus on institutions, high-net-worth individuals and families. For the latter, it offers services such as investment management, as well as retirement, trust and estate planning. The deal is expected to close on Jan. 1 and terms were not disclosed as of press time.