Hightower has inked yet another wealth management deal. Wealth management M&A has accelerated because of a blend of forces, such as the drive for economies of scale to handle rising tech and regulatory costs.

In relentless market consolidation, Hightower has taken a stake in Wichita, Kansas-based RIA 6 Meridian, in a deal expected to close in the fourth quarter of 2021.

Meridian, which has $1.8 billion under management and focuses on developing next-gen wealth talent, says the move will resource the outfit to accelerate professional development and boost infrastructure to ensure "further long-term growth goals."
 
6 Meridian was founded six years ago by current CEO and partner Margaret Dechant, Thomas H Kirk, Andrew Mies, Bryan Green, Pam Smith and Sarah Hampton. The RIA provides wealth management services to corporate executives, entrepreneurs and other high net worth individuals and families, and currently employs 24 personnel, including 11 advisors.
 
“The group’s focus on delivering independent, fiduciary-based wealth management and its commitment to developing next-gen advisors make them an exciting cultural fit for Hightower,” chairman and CEO Bob Oros said.

Industry watchers believe the pace of M&As in the independent advisor space over the past few years still has ample room to run as smaller firms find a multitude of reasons for seeking new investment and ownership, from succession planning as advisors head into retirement to technology access that can help with compliance and improve the front-end client experience. Added to this is the specter of tax rises making further cuts into the bottom line.

A recent Nationwide Retirement Institute survey of over 1000 US advisors found that more than half believed that RIA consolidation through M&As would be positive for their businesses. San Francisco-based consultancy DeVoe & Co, monitoring the sector, said that it crossed the 200 transactions milestone just prior to Thanksgiving this year and is on track to break new records in the number and size of deals. The valuations consultancy said the fastest deal flow is among firms in the $1 billion plus range, accounting for over 40 per cent of deals this year.

Hightower has taken stakes in more than 120 advisory businesses across 34 states, many in the $1 billion plus range as it pursues its collective services model.

The Chicago-based firm manages around $100 billion, and announced in November that it is moving into three new offices in New York City early next year.