Integrity Marketing Group, a large insurance platform, is making a major push into the wealth management arena with the purchase of Gladstone Wealth Partners, a registered investment advisor overseeing some $13 billion in client assets.
An affiliate that maintains assets both as an independent RIA and through the LPL corporate RIA, has a long track record of building out its business by recruiting breakaway teams from the large national brokerage firms.
Gladstone’s team has built “a proven platform that has really been able to continue to grow at a very impressive rate by being able to provide new opportunities for advisors coming out of the wirehouses,” Integrity CEO Bryan Adams said in an interview. “They’ve been able to do that…with very limited capital.”
A shortage of capital shouldn’t be an issue anymore. By selling to Integrity, Gladstone joins forces with a heavyweight in the insurance industry with thousands of employees and relationships with hundreds of thousands of outside insurance agents.
Integrity’s model extends from working with providers to develop policies to work directly with clients to help them find the best insurance product, what Adams describes as “everything from A to Z.”
“We’re trying to solve for everything in between to connect insurance carriers to clients and clients to insurance carriers,” he said.
The move into wealth management might seem like a significant departure for a company steeped in the insurance world, but Adams sees a thematic connection.
“One of the things that we’ve found is that as people get older there’s a couple of things that they really get concerned about: It’s about their health and wealth,” he said.
To be sure, Integrity isn’t a complete newcomer to the wealth management world. Some of its insurance-focused acquisitions dating to a couple years ago also had in-house RIAs or broker-dealers, Adams said, but those were sidelights of the core business.
With Gladstone, wealth management is the business, and Integrity is signaling that it wants to put some muscle behind its expanding advisory service.
“By partnering with Gladstone it allows us to have a much larger platform that’s really dedicated and much more sophisticated building out a much more holistic plan around the wealth management side,” Adams said. “So this is an important acquisition for us to really be able to pull all of this together and better serve people in the wealth management space.”
Gladstone will remain an LPL affiliate, but all the employees of its independent RIA will join Integrity, according to Richard Frick, Gladstone’s CEO and managing director. At Integrity, an employee-owned company, all of those employees—regardless of tenure—will acquire equity stakes, Adams said.
Both Adams and Frick indicated that further advisor acquisitions are likely.
As Gladstone has recruited breakaway teams, it has generally let them operate their own practice and take on their own branding. That strategy is likely to hold, but with a twist. Frick said Gladstone plans to begin acquiring RIAs outright, which will mean they will be 100% owned–unlike the breakaway teams–but will still be able to retain their own branding.
“If we acquire another RIA going forward, we will be consolidating those RIAs,” he said.
“We’ll be out there trying to build the wealth business by recruiting a lot out of the wires, like we’ve always done in the past, and we’re going to continue to do M&A now with Integrity as our partner and acquire RIAs,” Frick said. “As we acquire RIAs, we will have a few RIAs; we won’t have a hundred. So we’ll consolidate their RIAs into ours as we make acquisitions.”
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