Orion Mulls More Acquisitions as It Folds In Brinker, HiddenLevers

As Orion Advisor Solutions integrates Brinker Capital and HiddenLevers, which it recently acquired, the company is looking at more potential acquisitions, CEO Eric Clarke told ThinkAdvisor during a phone interview Wednesday, the last day of the Orion Ascent conference in Scottsdale, Arizona.

During the wide-ranging interview, Clarke also said that digital currencies were “here to stay” and that it was crucial for advisors to get up to speed.

He also explained why Orion opted to go ahead with its in-person conference despite a few other companies postponing their own live events until 2022 amid the spike in COVID-19 cases caused by the delta variant.

Brinker, HiddenLevers Integration

The recent Brinker and HiddenLevers acquisitions “provided different opportunities for our business,” according to Clarke.

“The Brinker transaction allowed us to greatly improve our asset management capabilities,” while the HiddenLevers transaction “allowed us to take their [investment] proposal technology and help our advisors grow by winning more business,” he explained. “That proposal technology addresses top-of-mind concerns that clients have and we’re seeing advisors really leverage that technology to help them close more prospects.”

When it comes to integrating those firms into Orion’s operations, he said: “With the Brinker transaction, I’d say we’re in the bottom of the sixth, top of the seventh” inning.

“All the advisor benefit” that they will start seeing the difference “comes in the seventh, eighth and ninth inning,” he said, adding: “There’s been a lot of groundwork that we’ve put in place so that we can now start building upon that.”

Meanwhile, the HiddenLevers integration is “in the third inning, so we’re just starting to implement our integration plan with them,” he said, predicting the integration will get close to the ninth inning “over the next seven to eight months.”

More Acquisitions Ahead?

Going forward, “if there are companies on the technology side that can help us better connect” Orion’s Prospect, Plan, Invest and Achieve framework strategy, “we’ll absolutely be looking at those,” he said. “We are looking at some of those now. We hope to continue to announce acquisitions that we’re making in that space.”

Specifically, “if there are opportunities out there where we can add scale to our business, we’re interested in those,” he told ThinkAdvisor. “Or if there are additional technologies that are helpful to our advisors, we’re absolutely interested in those as well. So we are having continued strategic discussions with about a half a dozen different parties right now. We’ll continue to have those.”

Digital Assets

Noting Ric Edelman, founder of the Digital Assets Council of Financial Professionals, spoke on digital currencies at Ascent, Clarke stressed that Orion sees it as important to help advisors get educated on digital assets.

Although digital currencies are “obviously” not going away, “it is definitely still, I think, on the bleeding edge … as it relates to advisors trying to figure out how to incorporate digital currencies into portfolios,” Clarke said. At least some advisors are wondering how they can get the knowledge they need to “speak with some level of expertise around digital currencies” and the topic is “something that advisors are really trying to get their heads around,” he added.

Edelman’s council is an “important first step for advisors,” according to Clarke, saying, “If nothing else, just get educated on it and get that certification so that when the client does come in, you’re speaking from a point of view of expertise.”

For now, the “biggest challenge that we face, I think, as an industry is trying to figure out how do we deal with digital currencies,” he said. “Do we take the time to set up these off-platform assets/off-brokerage platform accounts with these digital currency companies? Or do we wait for the SEC to approve an ETF of sorts or an ETF that’s based on some type of a futures version of a digital currency?”

This is an example where “technology is way ahead of the regulatory environment,” he noted. “The regulators, just by saying no to an ETF, have certainly not dissuaded people from investing in digital currencies. In fact, they’re doing it outside of the SEC’s purview.”

One only has to “look at the amount of assets involved that are being invested in digital currencies,” he said, noting advisors are trying to figure out how they can incorporate them as part of client portfolios “as opposed to seeing those assets leave and go outside of” their firms.

The increased number of large firms supporting crypto, meanwhile, is convincing more advisors to get into crypto, while Elon Musk is creating more demand for digital assets also, Clarke said.

Ascent Conference

About 1,000 people attended the conference, about the same number as the last in-person Ascent two years ago, Clarke said. “We had a couple of hundred advisors that were on a waiting list that wanted to attend that we just simply didn’t have the room to accommodate.”

There were also “well over 100 virtual attendees” this year, he said. But “I think people are kind of virtual event burnt out,” he said, noting it is “tough to maintain the attention levels at the virtual events.”

Asked if he had any thoughts about postponing or canceling the in-person conference like other organizations have done in recent weeks, he said: “We continuously evaluated the situation. We did contract with a third party to help us maintain safety protocols.” There was medical staff and rapid testing for COVID-19 onsite, he noted.

Attendees were also asked to upload their vaccination statuses to the third party, he said, noting over 85% of attendees were vaccinated. Therefore, “we felt very good about continuing to move forward with bringing everybody together in person,” he said.

Attendees were also required to sign off on a health certification form to verify that they didn’t have any COVID symptoms. Masks and hand sanitizer were also given out to everybody who checked in at the conference. But attendees were not required to wear masks.

Each attendee also received a different color wristband based on their preferences for greeting others at the event (such as open to shaking hands, just open to fist bumping or preferring to remain socially distant). There was also the virtual option.

“We felt really good about making sure that we were providing a range of options so people didn’t feel like they had to come if they weren’t comfortable with that,” Clarke explained.