$20 Billion Mariner Wealth Ramps Up Acquisitions
After a quiet start to 2017, fast-track mergers and acquisitions player Mariner Wealth Advisors is again setting its sights on recruiting new talent and striking deals with smaller rivals.
“Our pipeline is looking pretty decent right now and we’re targeting two to four acquisitions a year through 2020,” says Marty Bicknell, chief executive at Mariner, which manages about $20 billion.
From 2012 through 2015, the Leawood, Kan.-based indie RIA cut seven deals, according to Bicknell. Such M&A activity ranged in size from $300 million to just shy of $1 billion.
In that four-year period, Bicknell figures Mariner Wealth brought into the fold about 100 advisors who collectively added more than $10 billion to the wealth manager’s assets under management. Those included tuck-ins as well as outright acquisitions, he adds.
But its last deal was in 2015. “We made a conscious decision to take last year off in order to properly digest all of the acquisitions we’d made up to that point,” Bicknell says.
Now, his management team is planning to get back to a more aggressive M&A path.
“We’re ramping back up and expect to complete two or more acquisitions by later this year or early 2018,” Bicknell says.
Mariner Wealth’s biggest concentration of advisors comes in New York, New Jersey and Wisconsin. Besides adding to the company’s presence in Scottsdale, Ariz., Bicknell also lists as “hot” targets cities like Minneapolis, Milwaukee and Detroit. His team says it’s also looking for advisors in Texas – namely Dallas, Austin and San Antonio. Expansion into Denver, Los Angeles and San Francisco is also under consideration, he adds.
While declining to disclose exact locations, Bicknell tells FA-IQ that “late-stage” negotiations are underway with a $400 million AUM indie shop and another $800 million firm.
Including tuck-ins recruited to Mariner Wealth, Bicknell expects to reach a total of 500 advisors employed by the firm within three years – a 150% increase from today’s headcount.
“In the past we’ve been more opportunistic in terms of using external growth to acquire new talent,” Bicknell says. “But in recent years, we’ve become extremely bullish on the wealth business as its demographics have turned even more favorable.”
Mariner Wealth is trying to separate itself from “a growing number of serial acquirers” by independently financing deals, points out David DeVoe, an investment banker who tracks RIA activity.
“It’s rather unique – Mariner isn’t turning to private equity and other outside investors to finance its appetite for growth,” he says.
Now just a “handful” of "serial acquirers" in wealth management are following a model of investing in businesses using their own money, according to DeVoe. He includes Aspiriant, CapTrust and Beacon Pointe as prime examples of competitors taking similar M&A strategies.
“Growing by using your own assets can be very attractive to sellers – you don’t have to worry about the acquirer facing the same sort of financial pressures exerted by outside investors,” DeVoe says.
Separately, the wealth manager’s holding company includes a boutique asset management arm which manages about $27 billion – largely through other RIAs using its investment platform and strategies.
Mariner Wealth, though, started in 2006 as a pure-play financial planning firm with Bicknell and two other advisors. The cofounder, now age 48, says the RIA is pitching new recruits on a corporate structure built around local control where advisors on average own 30% of such partnerships.
“We don’t want decisions made by advisors in local offices to be diluted by what’s taking place in another area,” Bicknell says. “That’s why when we make an acquisition or recruit new advisors in a city, we create a new legal entity – an LLC – under our holding company.”
Giving advisors “meaningful” equity stakes at the “grassroots level” is likely to keep being a key selling point in boosting overall headcount, observes Keith Plywaczynski, a Chicago-area FA who joined Mariner two years ago.
“For me, gaining a generous equity stake really helped to reduce a lot of the initial financial risk involved in making a move,” he says.
Another key plus for Plywaczynski is that Mariner is giving him access to a dedicated business development staff.
“I’ve got more time to devote to working with clients,” he says. “I don’t have to go out to a golf course or something to meet new people. In fact, I don’t have to worry about doing any prospecting.”