National insurance and financial services firm Alera Group added $2.8 billion in assets to its registered investment advisor and retirement plan divisions in a deal that closed at the end of 2022.
The addition of Virginia Beach, Va.–based The Ascent Group brought approximately $1.3 billion in client assets to Alera Group Retirement Plan Services and $1.5 billion to its RIA business, Alera Group Wealth Services, for a total of $7 billion and $7.5 billion, respectively.
“It’s a race,” said Tina Hohman, who heads up Alera Group Wealth Services. “I’m a little ahead right now.”
Ascent represents an ideal acquisition for both growing platforms, she said. The deal adds two East Coast locations, with a second office in Wayne, Pa., as well as 42 associates, including 15 financial advisors, and a proprietary investment infrastructure with a turnkey asset management platform.
The firm was created in 2021 when Virginia-based Summit Group, led by Jeff Silverman, and Pennsylvania-based Walsh & Nicholson Financial Group, led by Brian Walsh, chose to break ranks with Ameritas and go independent. Mike Moss, who ran the Ameritas broker/dealer, became CEO of the new RIA and was charged with developing and marketing the investment platform, which leverages technology to reduce client costs by eliminating vendors, bringing functions in-house and streamlining advisor processes.
“It really fits our sweet spot because we didn't have any structures like that existing,” said Hohman. “And I think they recognized they could provide something better on their own and then found if they partnered with someone else, they could really ramp up what they're trying to do.”
“We’re builders,” Silverman said, in a statement, “and what drew us to Alera Group is the opportunity to keep building a better system—faster, leaner, and more cost-effective for clients. Now we can do so on a larger scale, reaching a larger number of advisors and investors.”
Hohman noted that Ascent comprises multiple divisions—wealth management, retirement plan services and an ancillary benefits practice—not unlike Alera Group. “They kind of look like a mini-Alera,” she said, which is what inspired investment bankers from Wise Rhino, a South Carolina–based consulting firm focused on the retirement and wealth management sectors, to make the introduction.
“The Ascent Group is the perfect partner for Alera and will help them accelerate the already strong growth in their financial services division," said Wise Rhino Partner Peter Campagna. "The Ascent Group is absolutely loaded with experienced, talented and motivated partners who will thrive with Alera, and the TAMP functionality will give Alera another valuable tool to continue serving their clients.”
Founded in 2017, Alera was created with backing from private equity firm Genstar Capital and combined 24 firms in property and casualty insurance, employee benefits, wealth management and retirement services. At the time, the combined firm brought in an annual revenue of $158 million and was focused on growing and developing its P&C and employee benefits divisions through an aggressive mergers and acquisitions strategy.
Hohman was named executive vice president and leader of Alera Group Wealth Services in September 2020, but the segment didn’t add any new firms until June 2022 when a deal with Wharton Business Group quadrupled its AUM to $4.7 billion. Two subsequent acquisitions brought the RIA to $6 billion in assets by fall, one of which also added $1.5 billion to the nascent retirement services division. The firm named Christian Mango as head of that division in September.
Both divisions plan to continue growing through acquisition in the new year, with a focus on adding firms in geographical regions where they don’t yet have a presence and firms that provide both services.
“We’re still in a building phase with the retirement plan services platform,” said Mango. “I think we’re seeing more and more businesses that are in both the retirement space and wealth space. So, I think those will be some of the acquisitions that we're looking at.”
“I would anticipate additional acquisitions that look more like this will be on our radar,” agreed Hohman, who said they would also be looking to acquire practices in regions where Alera has a P&C and benefits presence but no wealth services, including areas on the West Coast and in the southern central U.S.
“I think we’ll continue to look at technologies to further scale what we do, including things like financial wellness, potentially advisor-managed accounts,” added Mango. “But the integration with our broader business—those verticals on employee benefits, property and casualty—it’s critical that we begin to get that really humming. So, that will be a big focus for us this year.”
Today Alera Group employs 4,000 individuals across 180 offices and brings in an annual revenue in excess of $1 billion across all business verticals.
Terms of the Ascent deal were not disclosed. In keeping with Alera's acquisition model, Ascent retained its own ADV and subsidiary practices kept individual branding.