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DB Root Cuts Two Deals to Push Assets Past $5 Billion

By Murray Coleman January 10, 2018

After nearly a quarter of a century of growing organically, Pittsburgh-based DB Root & Co. is turning to a mergers and acquisitions strategy to move forward. Two years ago, the independent RIA brought in Dynasty Financial Partners for consulting help and support for its network of 40-plus firms, says David Root, the firm’s chief executive.

Now, it’s merging with two other regional players. The combined deal will push DB Root’s assets past $5 billion, according to Root. About $800 million will be managed directly by the company. The rest is expected to come from advising retirement plan sponsors and their participants.

In fact, continued expansion into 401(k) and other types of institutional markets was a major driver in bringing together all three firms, according to Root. “Coming together like this gives us more strength and depth on the retirement plan side,” he says. “It gives us more of an equal reach into both institutional and retail markets.”

The merger includes R. Applegate & Associates in Pittsburgh and The Paul Abendroth Group, which is based in Toledo, Ohio. “The way this transaction is structured, our group will start out as a merger, but a year from now it’ll become an acquisition by DB Root,” says Rick Applegate, who becomes a senior advisor and managing director of the firm’s fiduciary plan solutions group.

The Abendroth practice will be acquired immediately, Root says. A total of 13 client-facing advisors and 10 staffers will serve in the newly united firm, he adds.

“This deal expands our marketing staff and tax planning expertise,” Root says. “It also moves us into more of a regional player in wealth management. We’ll now have a presence in four states stretching across the Midwest and Northeast.”

DB Root’s focus since opening in 1994 has primarily been on the private-client side, Root notes. But in 2010 it started branching out into retirement plan advising work with large employers in the Pittsburgh area. “Rick’s focus has been on working with retirement plans for more than 30 years,” Root says. “He’s bringing to us 33 plans with about $4.2 billion under advisement.”

The addition of Abendroth’s team gives DB Root another 45 plans to go along with his group’s 20 or so, according to Root. All told the combined firm will service about 95 plan sponsors. “Besides quadrupling our presence in the retirement plan market in the Midwest and Great Lakes region, we’re also going to be working with a greater number of large retirement plan sponsors,” Root says.

The merger also makes sense, he adds, since DB Root and Abendroth up to this point have been primarily working with retail-oriented clients.

David Root

For Applegate, joining forces represents a major expansion of his ability to advise individual clients and their families at the retail level. “All three of us are going to be able to take advantage of greater scale and ability to price our services even more competitively across different markets,” he says. “But these mergers are also going to give our advisors more resources and expertise to bring to each client’s individual planning situation.”