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Choreo CEO Larry Miles, left, and Cherry Bekaert Interim CEO Brooks Nelson

Choreo to Acquire $1B Cherry Bekaert RIA

The lift-out of its wealth management business is only the beginning of Choreo’s relationship with the national CPA practice, say firm leaders.

Choreo, the registered investment advisor created in February when private equity group Parthenon Capital lifted out the wealth management business of accounting firm RSM, announced its second acquisition Wednesday—from another national CPA firm.

Choreo has entered into an agreement to acquire Cherry Bekaert Wealth Management in Richmond, Va., currently affiliated with Cherry Bekaert Advisory out of Raleigh, N.C. CBWM oversees about $1 billion in client assets and will bring Choreo’s total AUM to around $14.5 billion, together with a $1.8 billion acquisition announced earlier this month.

The transaction is expected to close at the end of the year. Terms were not disclosed, but equity played a significant role, according to Choreo CEO Larry Miles.

"This is just the start of our partnership with Cherry Bekaert," Miles said.

The wealth management practice will adopt Choreo branding, he said, and the hope is to establish a presence in “every single one” of Cherry Bekaert’s offices through a strategic partnership that was also announced Wednesday. "We will be their preferred wealth management partner. We'll sit in their offices, we'll work with their tax professionals, we'll work with their clients. It's a very hand-in-glove sort of situation."

Currently, he noted, CBWM has a presence in just four of 24 Cherry Bekaert offices nationwide.

“We aim to be the partner of choice for CPA firms like Cherry Bekaert that own an RIA as well as CPA firms that don't own a wealth management business,” said Miles, explaining that attractive CPA firms without an RIA will be offered partnerships similar to the one entered into with Cherry Bekaert.

Choreo would appear to have no shortage of opportunities. “We’re talking to dozens of planning-first, tax-oriented advisory firms that want to be part of building the next-generation firm,” Miles said. “I think we'll have another announcement in a couple weeks and then another one a couple of weeks after that.”

Built inside of Cherry Bekaert 20 years ago, CBWM provides portfolio management, financial planning, investment advisory oversight, 1031 advisory and retirement plan services. The firm eventually grew to the point where it made sense to seek a new partner with expanded resources, said interim CEO Brooks Nelson. Common histories and similar cultures are what ultimately drew the firm to Choreo.

“We took a strategic look at our wealth management business and what we needed to further growth and expand service and options for our clients,” he said. “[Choreo’s] suite of services and their client service approach is very similar to what we were already doing. It feels very comfortable to us.”

The move to Choreo, he added, will provide the wealth management practice with more resources for junior planners and more sophisticated investment solutions.

Given existing similarities between the practices, Miles and Nelson said the upcoming transition should be smooth. “We use some of the same technology,” said Miles, “same custodians.”

“All these guys do is basically flip a switch and it’s all just gonna transfer over the next day,” said Nelson. “It'll be easy peasy.”

With headquarters in Minneapolis, Choreo currently serves more than 3,600 families through 28 locations nationwide, but has plans to position itself as a major player in the RIA space over the coming years.

“When you think of the independent RIA, it's a very fragmented industry and it's very entrepreneurial,” said Miles. “But I think we're emerging from our infancy and there's going to be an opportunity for a handful of firms to assume a leadership role in defining what that firm looks like."

"I think Cherry is a tremendous example of all the good things that can happen for clients when their tax and wealth and consulting advisors work together," he said. "And so, we'll take that model and become one of the largest independent advisory firms in the country."

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