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When FAs and CPAs Bid Adieu

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Mergers of financial advisors and CPAs are sometimes held out as synergistic solutions for building business—each side has clients who often need the services of the other.

But it's not always the case that such partnerships thrive, and no one knows that better than Mariner Wealth Advisors. The Kansas-based RIA said today it has taken a majority stake in Orizon Investment Counsel, the wealth management unit of Orizon Group, an accounting and financial services firm in Omaha, Neb.

The Orizon team managed about $300 million in assets. Mariner Chief Executive Martin C. Bicknell expects they will bring all those assets over. The deal closed June 30; the Orizon team of 14 will be employees of Mariner, working under the Mariner Wealth Advisors name. Bicknell (right) said Mariner paid cash to Orizon for the business but didn’t disclose details.

Mariner, whose AUM has risen to $3.8 billion with the acquisition, has done deals like this before. Its first acquisition a year and a half ago was a wealth manager from another accounting and financial services firm, CBIZ Inc. in Cleveland, Bicknell told me.

The FA/CPA business can be a big resource for clients, Bicknell said, but there’s a caveat. “I think the operating of the business is where the difficulty comes in. If a wealth advisor is running a dual entity, sometimes the financial resources go to the wealth division. If an accountant’s running it, sometimes it goes to the accounting division,” he said. “I think it’s hard to grow both together. I’ve not seen it work as well as I would have thought it would.”

Daniel A. Tucker, Orizon Investment Council president (below left), said the wealth management unit combined with Orizon in 2000 to offer integrated services. Each part of the business came to see differences in the other, he said—the tax side worked long hours during tax season and fewer hours at other times of the year, while the wealth managers worked more regular hours, leading to “potential perceived inequalities” between the two firms.

Each side afforded plenty of referrals to the other. But separating the two sides will allow both to focus on their core businesses, Tucker said. His team felt it had grown as much as it could under Orizon—he sees the team growing into a $1 billion AUM in five years.

But at Orizon it had to share IT and human resources with other sides of the company, Tucker said. Mariner can provide those services and others, allowing the team to focus on clients, he said.

The team will remain in the same building as before, so they can still share clients with Orizon, he added.

“That’s why we came together, and I think we had a great run, and if we had to do it all over again, we would, absolutely,” Tucker said.

Mariner’s deal for the team is its second so far this year. Bicknell said the goal is to reach 125 advisors in 2015; Mariner has 44 so far.

 

 

 

 

 

 

 

 

 

 

 

 

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