Captrust Financial Advisors, the Raleigh, N.C.-headquartered registered investment advisor that surpassed $1 trillion in total client assets a few months ago, has acquired Boston Financial Management, a Boston-based RIA with nearly $5 billion in client assets. This represents Captrust’s first large deal this year and its sixth Massachusetts acquisition since 2019.
This deal also takes Captrust to over 100 employees in Massachusetts, now the firm’s third-largest state behind North Carolina and Texas.
Boston Financial Management was founded in 1976 by Chairman of the Board Richard H. Morse, who will retire as part of this transaction. It has 45 colleagues across its Boston, Cape Cod, Mass. and Portland, Maine locations. The firm is now led by President and CEO Louis Crosier, who will join Captrust as principal and financial advisor.
Crosier said his firm started the process in January to prepare for Morse’s desire to exit the business. The firm hired Berkshire Global Advisors as its advisor; executives spoke with 23 different acquirers and received 12 offers.
“The economics were very similar. Many of the offerings were very similar. And the infrastructure to support the business seemed pretty similar,” Crosier said.
What made Captrust stand out was its culture and shared values in terms of how you treat people.
“Our internal motto is, ‘Do great things for clients and for each other, all else follows.’ And Captrust, part of the mission statement is ‘Enrich the lives of clients, colleagues, and communities.’ And as trite as it might sound, that alignment was incredibly important for us," Crosier said. "Not only in the words, but in going through the process, seeing both parties walk the walk.”
BFM was also looking for a growth merger, not a synergistic or financial engineering one. Captrust has distribution avenues that its advisors can tap into, and Crosier said the firm can also help accelerate its M&A and recruiting. Those distribution channels include the custodial referral networks, Captrust’s expertise with endowments and foundations, and its retirement plan side of the business.
“I think multiple avenues for meeting new clients, much more sophisticated data analytics and marketing than we have today, all of which when you put them together, should accelerate growth,” he said.
Captrust grew initially by serving institutional clients, such as retirement plans. However, the firm found those retirement plan participants were natural clients of the wealth management business. Captrust now serves 3,000 retirement plans around the country
Wilson Hoyle, managing director at Captrust, said the firm expects to close a handful of deals by year-end. The firm has also added advisor talent via recruiting, bringing on couple dozen advisors this year.
This summer, Captrust announced it had surpassed $1 trillion in total assets under management and advisement, a big milestone for the independent RIA channel.
Captrust began an aggressive acquisition strategy in 2006 and has since completed about 74 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.
