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Financial Planning > Behavioral Finance

Ric Edelman Cashes In

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The ship just came in for Ric Edelman, the author, broadcast personality, and Washington-area independent advisor. Edelman announced on May 10 that he has sold his $2.6 billion advisory firm to Sanders Morris Harris Group, the Houston-based financial services firm founded by George Ball, the onetime boss of both Prudential-Bache and E.F. Hutton. Edelman said the value of the deal is likely to be “in the nine figures,” half in cash and half in SMHG stock, with a cap of $128.5 million.

TThe sale of Fairfax, Virginia-based Edelman Financial Center, which has 7,000 clients and 28,000 accounts, was long in the making. “We made the decision about a year and a half ago that we needed to align ourselves with a partner who had the management and capital to help us grow our business,” Edelman says, adding, “We didn’t want to get swallowed up by one of the huge financial groups.”

Indeed, Edelman will remain at the helm of his firm and hopes now to open offices in additional cities as well as acquire other planning firms. SMHG, meanwhile, expects to “leverage the wealth management and financial planning services provided by Edelman Financial Center across our other asset management businesses,” says the firm’s president, Robert Garrison II.

The acquisition will give SMHG some $10 billion in client assets. Edelman is selling 51% of his firm to SMHG immediately, with the remainder of the sale to be spread over four years. He will become one of the Texas firm’s largest shareholders, but says, “we are sharing a substantial portion of the deal proceeds with our staff as a reward for their long, hard work.”

Edelman says that although SMHG owns a small broker/dealer, he plans to maintain his firm’s ties to Royal Alliance Associates “for now.” However, “that may change over time,” he says.


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