Captrust Financial Advisors, the Raleigh, N.C.-headquartered registered investment advisor, has surpassed $1 trillion in total client assets, a big milestone for the independent RIA channel. That includes $220 billion in assets under management, with the rest under advisement.
Captrust now has a national presence, with clients in all 50 states. When the firm launched in 1997, it had 12 employees working out of one location. It’s since grown to 1,600 people and over 90 locations across the United States.
“I didn’t see that one coming when we started the firm 27 years ago,” said Fielding Miller, co-founder, CEO and chairman of the board. “It represents that a lot of clients have chosen us over many other competitors, and they stay here when they get here.”
The milestone also validates that Captrust’s business model is working, Miller said.
Captrust began an aggressive acquisition strategy in 2006 and has since completed about 73 deals. Three years ago, the firm announced it sold a 25% stake to private equity firm GTCR—based on a valuation of $1.25 billion. Last fall, Captrust sold a minority stake to Carlyle.
The RIA expects to complete five or six transactions by the end of the year. Fielding said one of the main reasons firms like to join Captrust is its scale, which also means more buying power.
“For example, $1 trillion—that money is spread around thousands of clients, thousands of asset managers and recordkeepers and other vendors, and because we have a great deal of money with them or potential to bring to them, they’re willing to discount their prices; they’re willing to provide us with additional services,” he said.
Captrust grew initially 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 around the country.
“That 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 wellness, advice and other things—and then they look to hire us to be their wealth manager. The retirement plans feed a lot 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 about evenly split between the wealth management business and its institutional business.
Bernie Clark, the outgoing head of Schwab Advisor Services, recently predicted that the first $1 trillion RIA would soon emerge, given the continued consolidation in the space.