Close Close

Retirement Planning > Retirement Investing

Captrust, Pensionmark Partner to Create New RIA

Your article was successfully shared with the contacts you provided.

Captrust Financial Advisors and Pensionmark Retirement Group have partnered to create a new jointly owned RIA under the Pensionmark brand.

The strategic partnership aims to create a platform for retirement plan advisors, effective after a 30-day ramp up time, said Captrust CEO Fielding Miller.

“They [Pensionmark] have a very good set of tools and services and we basically come along and partnered with them to start a new version of the company,” Miller said in an interview with ThinkAdvisor. “It will also be called Pensionmark, but it will be with a brand-new RIA and be using our broker-dealer as opposed to LPL, which is what they’re using now.”

In addition to its broker-dealer, Captrust will bring to Pensionmark “a lot of back-office support” and “a lot of other operational synergies that we can bring to there that make their business run more efficiently,” Miller said.

Captrust also brings a lot of capital to the partnership.

“[Pensionmark] has what we feel like are the best tools and services that can take on some of these advisors, and what it was really missing was capital and a partner that could help them build it out,” Miller said. “That’s why we decided instead of to buy the whole business, we decided to be an investor in the business.”

Miller wouldn’t disclose how much capital Captrust is bringing to the table or the specific terms of the deal, but he said “it’s significant.”

While Pensionmark has been around as an advisory firm for over 20 years, its affiliate business is relatively new, as of about 5 years ago.

Miller sees strong opportunity in Pensionmark’s ability within the affiliate industry.

“We just feel like the affiliate market for advisors is in complete disruption. There’s a lot of discontent where advisors are trying to find a home and especially the retirement-focused advisors,” he said. Adding, “There’s a lot of disruption going on with the various players at this point, and so we’re kind of betting that Pensionmark is going to be the winner.”

Miller has some ambitious goals as to how the Pensionmark RIA business can grow.

“We think it can grow five-fold in the next 5-7 years. It’s got a lot of potential,” he said.

The combined firms are expected to serve more than 3,000 institutional clients with over $170 billion of assets under advisement at the close of the transaction expected during the second quarter, according to a statement released by Captrust.

“We think it’s a unique time in the market for retirement-focused advisors,” Miller said. “There’s a lot of flux, a lot of things in flux, a lot of disruption. We just think this is a really good time to get in that market while others struggle with it. That’s why we’re making the investment.”

While Captrust and Pensionmark advisors will continue to offer services independent of one another with the same tools, services and infrastructure they each offer today, the new structure will give Pensionmark a more robust wealth management platform to offer its advisors and their clients.

Senior leaders at Captrust and Pensionmark have also identified organizational and operational synergies that should benefit both firms. In addition, they intend to offer jointly developed solutions, such as additional acquisition strategies and business succession planning programs for advisors.

—Related on ThinkAdvisor: