Captrust Financial Advisors, the Raleigh, NC-based registered investment advisor that passed $1 trillion in total client assets a few months ago, has acquired Boston Financial Management, a Boston-based RIA with nearly $5 billion in assets of the client. This represents Captrust's first major deal this year and its sixth acquisition in Massachusetts since 2019.
This deal also gets Captrust over 100 employees in Massachusetts, now the firm's third-largest state behind North Carolina and Texas.
Boston Financial Management was founded in 1976 by Chairman Richard H. Morse, who will retire as part of this transaction. It has 45 colleagues at its locations in Boston, Cape Cod, Mass. and Portland, Maine. The firm is now led by President and CEO Louis Crosier, who will join Captrust as principal and financial advisor.
Crosier said his firm began the process in January to prepare for Morse's desire to exit the business. The firm hired Berkshire Global Advisors as its advisor; executives talked to 23 different buyers and received 12 offers.
“The economy was very similar. Many of the offers were very similar. And the infrastructure to support the business looked very similar,” Crosier said.
What made Captrust stand out was its culture and shared values in terms of how you treat people.
“Our internal motto is, 'Do great things for customers and for each other, everything else follows.' And Captrust, part of its mission statement is 'Enrich the lives of customers, colleagues and communities'. And as corny as it sounds, that alignment was incredibly important to us,” Crosier said. “Not just in words, but in going through the process, seeing both sides walk the walk.”
BFM was also looking for a growth merger, not a synergistic or financial engineering merger. Captrust has distribution channels its advisers can tap into, and Crosier said the firm can also help accelerate M&A and its recruiting. These distribution channels include custodial referral networks, Captrust's expertise with endowments and foundations, and its retirement plan side of the business.
“I think multiple avenues to meet new customers, much more sophisticated data analytics and marketing than we have today, all of that when you put it together, should accelerate growth,” he said.
Captrust initially grew by serving institutional clients, such as retirement plans. However, the firm found that those retirement plan participants were natural clients of the wealth management business. Captrust now serves 3,000 retirement plans nationwide
Wilson Hoyle, managing director at Captrust, said the firm expects to close a handful of deals by the end of the year. The firm has also added advisor talent through recruiting, bringing on a few dozen advisors this year.
This summer, Captrust announced that it had surpassed $1 trillion in total assets under management and advice, a major milestone for the independent RIA channel.
Captrust began an aggressive acquisition strategy in 2006 and since then it has completed about 74 deals. Three years ago, the firm announced that it sold one 25% of the shares for private equity firm GTCR – based on a $1.25 billion valuation. last fall, Captrust sold a minority stake at Carlyle.