Captrust Financial Advisors, the Raleigh, NC-based registered investment advisor, has surpassed $1 trillion in total client assets, a major milestone for the independent RIA channel. This includes $220 billion in assets under management, with the rest under advisory.
Captrust now has a national presence, with clients in all 50 states. When the firm started in 1997, it had 12 employees working from one location. It has since grown to 1,600 people and over 90 locations across the United States.
“I didn't see it coming when we started the firm 27 years ago,” said Fielding Miller, co-founder, CEO and chairman of the board. “This represents that many customers have chosen us over many other competitors, and they stay here when they get here.”
The milestone also proves that Captrust's business model is working, Miller said.
Captrust began an aggressive acquisition strategy in 2006 and since then it has completed about 73 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.
The RIA expects to complete five or six transactions by the end of the year. Fielding said one of the main reasons firms want to join Captrust is its scale, which also means more buying power.
“For example, $1 trillion — that money is spread across thousands of clients, thousands of asset managers and record holders and other vendors, and because we have a lot of money with them or the potential to bring them, they're willing to lower their prices; they are willing to provide us with additional services,” 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.
“This represents about 5 million plan participants, employees of these companies,” Fielding said. “We have a lot of services that we engage with these employees – from health, advice and other things – and then they look to hire us to be their wealth manager. Retirement plans fuel many of our opportunities in wealth management.”
That “bridge,” as Fielding calls it, is now the firm's fastest-growing area for new clients. The firm's overall revenue is almost evenly split between its wealth management business and its institutional business.
Bernie Clark, outgoing head of Schwab Advisor Services, recently predicted that the first $1 trillion RIA would emerge soonstarting from the continuous consolidation in the space.