Sequoia Financial Group, an Akron, Ohio, wealth management firm, is merging with LJPR Financial Advisors, a fee-only financial advisory firm headquartered in Troy, Michigan. The combined firm will have close to $5 billion in AUM plus 91 employees once the deal is completed, which is expected at year-end.
Terms of the deal were not disclosed, but it involves both equity and cash and no private equity or debt, according to Tom Haught, president of Sequoia Financial Group. The merged firm will retain the Sequoia Financial name with Haught as president and Leon LaBrecque, CEO of LJPR, as chief growth officer.
LaBrecque will become a shareholder of the new firm along with three other officers of LJPR, increasing employee ownership from 12 to 16. Cohen & Co., a national CPA firm, is a minority shareholder, an arrangement that has allowed Sequoia to coordinate wealth management planning with tax planning, Haught tells ThinkAdvisor.
“LJPR aligns perfectly with our strategy and culture and complements our existing business exceptionally well,” said Haught of the merger with LJPR. “We can serve clients better and leverage tech better. We will merge the best and the brightest of the firms’ deliverables.”
The clients of both firms are largely individuals, primarily baby boomers, but Sequoia’s clients have more assets per capita, especially among those with high net worth. Their assets average $30 million per capita compared with $2 million for LJPR, according to the firm’s latest Forms ADV.
Sequoia has a total $4.1 billion in assets under management, 88% in discretionary assets, for 2,207 clients with just over 6,400 accounts as of July 4. LJPR has $776.1 million in AUM, all discretionary, for 1,230 clients with 3,108 accounts, as of March 30. Many of LJPR’s clients are mass affluent, including police officers, firefighters and Ford Motor Co. employees.
Haught tells ThinkAdvisor that the new firm creates an “enormous opportunity” for advisors to become specialists in anything they want to do, including such goals as college funding. “The idea of specialization is important, providing better client results, but you need scale to do that.”
He says he hopes the new firm will make more acquisitions. Sequoia has made five since 2009, including now LJPR, which both executives are calling a merger.
LaBrecque makes the point that if his firm was being acquired he would have taken the cash. Instead he’s staying — “I wasn’t trying to get out” — and says he’s committed to stay for a substantial period of time.
— Check out RIAs Are on a Hiring Spree: Survey on ThinkAdvisor.