RIA Captrust Sticking With Growth Plan in 2020, Exec Says

Captrust Financial Advisors is looking to keep growing organically and through M&A in 2020 after a “record year for organic growth” and five acquisitions in 2019, according to Wilson Hoyle, the Raleigh, North Carolina-based RIA’s managing director and head of its advisor group.

In 2019, Captrust acquired Boston Advisors’ Private Advisory Group, South Texas Money Management, Cornerstone Capital Advisors and McQueen, Ball & Associates. Captrust also added three partners from Atlanta-based FiduciaryVest to its growing institutional retirement plan advisory practice. The FiduciaryVest team, led by Philly Jones, added more than $13 billion in client assets under advisement, Captrust said in April.

The company had more than 650 employees nationwide after the most recent acquisitions, up from 515 at the end of 2018, and $367 billion in assets under advisement, up from $298 billion, it said Friday.

“We have been unapologetically a growth company for 25 years,” Hoyle told ThinkAdvisor in a recent interview. In addition to the acquisitions, it has been growing organically each year for the past 20 years, he noted. “That’s really important to us because we really believe that the best indicator of a company’s health is its ability to grow organically,” he said, adding that’s also “one thing that separates us from other companies similar to us that are trying to grow.”

On the acquisition front, Captrust remains “very discerning in who we bring on,” he said, explaining it’s looking for firms that are also looking to grow, not “to cash out.”

However, he was quick to add that although it is “hoping to do a handful of deals each year,” it does not “budget any deal flow” each year and if there is a year with no acquisitions in it, “that’s OK” also.

The firms that join Captrust are “coming to us from a position of strength, so they didn’t have to do a deal” either, he said, noting the RIAs it buys tend to be growing without it.

Captrust makes about 4-6 acquisitions each year, and the five deals in 2019 followed the same number in 2018 and seven in 2017, John Curry, its chief marketing officer, told ThinkAdvisor. Although it made no deals in 2016, that was a record year for organic growth at the firm, Hoyle pointed out.

While Captrust prides itself on having a high client retention rate, it also has a “phenomenal advisor retention rate,” Hoyle said, noting that once an advisor joins his firm, “they don’t leave.”

Helping those advisors grow are 12 financial buyers at Captrust who are dedicated to helping its advisors grow, he added.

Although it is already eyeing specific RIA acquisitions for 2020, he declined to name any of them, but said: “We have a pipeline and they’re at different stages.” That does not necessarily mean that any of them in the pipeline will join in the next few months. After all, “we’ve had courtships go as long as seven years,” Hoyle noted.

Captrust kicked off its first 10-year plan in 2006 and that “helped us make decisions and it gave us some guardrails” and goals, he said. As part of that plan, the firm set revenue targets, employee count and satisfaction goals and even set targets for how much money it wanted to give back to the community, he pointed out, but declined to specify any of those targets.

As an example of how Captrust gives back to the community, it said Friday that the Captrust Community Foundation, its employee-run 501(c)(3) foundation “whose mission is to enrich the lives of children in local communities,” made a $100,000 donation to the Corral Riding Academy. Started in 2007, the CCF has awarded more than $1.825 million to charitable organizations across the U.S. that serve children in need, the firm said.

Captrust hit the goals of its first 10-year plan ahead of schedule in 2016 and then rolled out a new 10-year plan, which it’s “ahead of schedule” on also, Hoyle told ThinkAdvisor. During the first 10-year plan, the company was able to double the revenue it achieved in 2006 four times, Curry said.

The company also reinvests 50% of its profits each year into its business, including in technology, Hoyle pointed out, noting Captrust has a technology team of 15 people, larger than those of most RIAs. Recent tech investments included a proprietary financial planning tool for its participants, he said.

In addition, “two years ago, we retooled our entire” customer relationship management and “back-office technology to migrate everything to the cloud,” Curry said, pointing to the desire for better security as one major reason it made the move. “We have one application that’s running on a server” still on-premise now, he said, but “even that might be gone by the end of the year.”

— Check out RIA Captrust Adds $1.5B Boston Advisors’ Group on ThinkAdvisor.