Roll-up firm targets independents that are willing to give up independence. United Capital Financial Partners, an aggregator of fee-based advisory firms, has acquired four more of them: Southborough, Mass.-based retirement-plan advisor PFE, Boca Raton, Fla.-based RIA Spectrum Assets, Dallas-based broker-dealer Park Cities Financial Group and Stamford, Conn.-based Sapient Wealth Management.

United, which launched in 2005, now has 15 locations and about $8 billion in client assets -- including retirement-plan assets, according to United's president Patrick Bommarito. The firm has a staff of about 100 with roughly two dozen of them at its headquarters in Newport Beach, Calif.

Springes to catch woodcocks

PFE aside, it's hard to get a handle on United's latest acquisitions. Spectrum has given up its RIA, but in its last filing with the SEC it reported $60.5 million in assets under management, mostly for individuals who didn't qualify as high-net-worth investors. Park Cities had more than $200 million in assets under management when it became affiliated with Wachovia Securities' Financial Network, the Charlotte, N.C.-based bank's independent-broker platform -- but that was way back in November 2002. Sapient is the book of business former PricewaterhouseCoopers advisor Thomas Garvey bought from PwC when the business consultancy bailed out of the investment-advisory business this past summer.

United describes itself as a "transformational acquirer." Backed by Boston-based merchant bank Grail Partners to the tune of about $15 million (and additionally capitalized by its founders), the company buys businesses outright -- typically advisories in the $100-million-to-$500-million range, says Bommarito -- and centralizes their manager research and due diligence, human resources, compliance and technology functions.

United uses Advent for connectivity, PortfolioCenter for account management, Tamarac for portfolio rebalancing and Salesforce for CRM.

All this frees United advisors "to provide life-relevant advice to their clients," says United's CEO Joe Duran.

Knightsbridge says no thanks

According to Duran, United's 100% buyout approach makes its advisors "participants in building a major national institution."

Before founding United, Duran was president of Centurion Capital Management, a third-party investment platform provider that GE Private Asset Management -- now Genworth -- bought for about $100 million in 2001. He is also author of a book called Start It, Sell It and Make a Mint: 20 Wealth Creating Secrets for Business Owners.

Though United doesn't disclose the details of individual acquisitions, Bommarito says the typical payout is a third of the purchase price in cash, a third in notes (payable over a pre-defined period) and a third in shares of United.

United initially had in mind to target firms run by advisors in their 50s and 60s who might be looking for an exit strategies. But, as things have turned out, a number of its acquisitions are run by younger advisors who seem content to stay put. "Nobody wants to leave," says Bommarito.

Nobody says it, but what might be keeping these advisors in place is the prospect of United going public or perhaps finding a buyer with the result, perhaps, that their stake in United will increase substantially in value.

In any case, United "will be a national firm for a long time," says Bommarito.

Meanwhile though, United needs a new firm to help it identify and negotiate with acquisition targets. Knightsbridge Advisors had that mandate, but last week the New York-based search firm "decided to terminate the relationship for reasons we'd rather not state," says partner Allan Starkie. -FWR

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