Mariner Wealth Advisors, the Leawood, Kansas-based advisory firm, continued its acquisitive ways Monday by announcing that it had bought a majority interest in Housen Financial Group, based in the New Jersey Shore town of Manasquan, adding Housen’s $817 million in client assets under management and 13 professionals to its growing network.
Mariner Wealth Advisors now has $9.5 billion in total AUM, including $2.4 billion in the Northeast; in late 2012, it acquired another New Jersey firm, Brinton Eaton, and its $700 million in client assets under management.
Why Housen? Marty Bicknell, CEO of Mariner Wealth, said in an interview Tuesday that buying a majority stake in RIA firms was standard procedure for Mariner. “We left relatively significant ownership in the hands of local leadership,” he said, referring to Housen but also to Mariner’s typical acquisitions. “With only two exceptions, we maintain the local existing brand and management team.” Bicknell declined to provide the acquisition price for Housen, though he said Housen will keep its name.
So are the Housen acquisition and Mariner’s others a succession planning strategy for the owners? “In the last couple of acquisitions, the founders have been relatively young, so it’s not a short-term succession plan” for them, but rather the Mariner acquisition helps provide “fuel for growth and strategies for growth” with the acquired firms’ “partners and lead people.” As part of their acquisitions, Bicknell says Mariner likes to provide more junior employees with small ownership stakes as well.
Is Bicknell happy with Mariner being called a ‘rollup firm?’ “The name doesn’t bother me,” he says, but adds that there is a difference between Mariner and other firms that acquire RIA practices.
“We don’t have an exit strategy” or plan on going public within the next three, five or seven years, he said. “We want to be the partner for a firm that wants a second chance” for growth.
Within the RIA universe, Bicknell says there’s a “large portion of the firms where the principals start out as practitioners, then wake up one day to find that they’re running a business, and it takes them away from serving the clients.” Mariner’s proposition is to “take that away from them,” meaning running the business, and “support them with hiring business development people” and other resources so those founding advisors can focus on client service. “Our departments [at Mariner] are larger” than what the advisory firm will have, he points out, in areas like human resources, technology or compliance, so the acquired firm benefits from that scale as well.
Will Mariner continue to acquire more RIA firms? “Yes,” Bicknell says. “There are lots of firms in that $500 to $750 million (in AUM) range that are looking to bust through” that hurdle and achieve significant new growth, and that’s where Mariner comes in. “We want firms and advisors who put their clients first, their associates second and the firm third. That’s easy to say, not easy to find,” he says. In addition to buying firms — Bicknell says Mariner has bought six in the past two years but visited 200 potential acquisitions — Mariner has also launched two initiatives lately. One is establishing Mariner Trust Co., providing trust and estate planning services to Mariner clients. The other is First Point Financial, launched in October to provide the “same type of services Mariner offers” but for mass affluent clients.
“We founded Mariner Wealth in May 2006,” Bicknell says, and while the firm “focused on the HNW individual … contrary to a lot of firms that focus on HNW individuals, we’ve never had an account minimum.” Bicknell says that “if someone wants our help, I’ve felt it to be my responsibility to help them, so over the past seven years, we’ve amassed a bunch of mass affluent clients.”
First Point was founded “because of our belief that that market is dramatically underserved.” While the Trust Company and the standard HNW client at Mariner is provided with investment, tax and estate planning services, and insurance resources, for the mass affluent, he says that with First Point “we’re making a conscious effort to bring financial planning, not just investment advice, to the mass affluent, to achieve their planning goals.”
First Point has actual advisors, but Bicknell says that “the type of advisor and the experience of an advisor” necessary to serve a “$350,000 relationship is different than the type of advisor and the experience of an advisor you need to serve a $20 million relationship.” First Point doesn’t “need to hire estate planning attorneys” to serve its clients, but rather “CFPs who understand the basic nuances of financial planning.” Those advisors are compensated “for retention and retention only” of clients, as part of Mariner’s strategy to “separate business development from advice.” After all, he says, “in the wirehouses the best advice giver is rarely the same person as the biggest producer.”