Deals & People January 5, 2022

2022 M&A Action Picks Up Steam With Latest NFP Acquisition

The firm says its acquisition of Improved Funding Techniques Inc. expands its retirement footprint in the Northeast.

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Insurance broker and consultant NFP has announced its acquisition of Improved Funding Techniques Inc. (IFTI). The transaction closed on December 1.

IFTI is a third-party administrator (TPA), with an internal registered investment adviser (RIA), offering a consolidated solution for designing, implementing and administering retirement plans for privately owned businesses. In acquiring IFTI, NFP says it will add scale to its retirement business and expand its footprint in the New York metro area and around the country.

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According to the firm, the acquisition is also meant to advance NFP’s existing internal TPA expertise, while adding complementary defined benefit (DB) plan capabilities that can be leveraged across the entire organization.

Nick Della Vedova, president of NFP Retirement, says the acquisition will allow NFP to leverage IFTI’s existing relationships across the region while enhancing its ability to deliver value to businesses of all sizes, including larger manufacturing companies and professional services firms, such as medical and law practices.

Daniel Bystrom, IFTI’s president, will join NFP as a senior vice president reporting to Della Vedova. Bystrom and the IFTI team will collaborate with NFP’s team in the Northeast region on opportunities to introduce solutions across the NFP Retirement distribution network. Commenting on the acquisition, Bystrom says his team of consulting and actuarial experts will complement NFP’s commercial insurance, group benefits and executive benefits solutions.

The transaction comes on the heels of a recent agreement announced by Wealthspire Advisors, an NFP company and independent investment adviser, to acquire Private Ocean LLC, a fiduciary wealth management firm with $2.7 billion in assets.

News of the IFTI deal comes after another record-breaking year for adviser industry merger and acquisition (M&A) activity. According to research by Echelon, the possibility of tax code changes helped industry M&As set a quarterly record in the third quarter of 2021, which saw 78 deals announced. The previous record was 76 deals, set in the first quarter of 2021. The third quarter analysis showed large strategic acquirers, many of which are backed by private equity firms, maintained their status as the most active dealmakers in the wealth management and advisory industry.

Last year, Wise Rhino Group published a new analysis of the rapid M&A activity occurring in the retirement plan advisory industry, finding the pace of deals continued to accelerate throughout 2021. The analysis suggested the same is likely in 2022.

Wise Rhino Group found that insurance brokerage firms such as NFP are arguably the best positioned to integrate retirement advisory firms, as most have established operating companies and have coveted growth currency in the form of employee benefits and property-casualty referrals. They are also the most experienced acquirers and are very effective at integrating new partner firms. 

Deals & People January 4, 2022

Creative Planning Acquires Berno Financial Management

One of the first adviser industry acquisition deals of 2022 underscores the trend of retirement plan-focused firms and wealth management firms joining forces.

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Registered investment adviser (RIA) Creative Planning Inc. has announced the acquisition of Berno Financial Management, which has a total of more than $300 million in assets under management (AUM).

Berno was founded by Bruce Berno in 1993 and has helped families and individuals in the greater Cincinnati area, as well as over 20 other states across the country, pursue financial peace of mind. The firm is an independent, fee-only financial planner, offering advice that focuses on the client’s complete financial picture.

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“Bruce has built a great practice and his planning-led, tailored investment approach fits in well with our offering,” says Peter Mallouk, Creative Planning CEO. “Bruce and the entire Berno team will be joining our Cincinnati practice as we continue to expand in this important market.”

The character of this acquisition is in line with broader industry trends of increasing retirement and wealth advisory firm consolidation. Likewise, the early-in-the-year announcement of the deal continues the rapid pace of merger and acquisition (M&A) activity seen in 2021, with experts anticipating accelerating year-over-year dealmaking activity to continue into 2022 and beyond.

While notable, this is not Creative Planning’s first deal. Last November, Lockton and Creative Planning said they would be combining forces, with the goal of creating a “best-in-class advisory offering designed to serve corporate retirement plans and the plans’ participants.” The partnership itself is named “Lockton Retirement Services, an Offering of Creative Planning,” with Lockton taking an equity position in Creative Planning meant to underscore the firms’ “mutual commitment” to “forge an aligned, tangible and differentiated partnership.”

Speaking last year on the Creative Planning and Lockton deal, Dick Darian, CEO of Wise Rhino Group, said the partnership represents a significant milestone in the broader M&A action that has been remaking the plan adviser and recordkeeper industry for some time now. The idea is that, by combining the insurance/brokerage resources of Lockton with the independent wealth management capabilities of Creative Planning, the partnership should be well positioned to compete with the likes of CAPTRUST, Hub International, SageView, OneDigital and other firms, all of which have engaged in meaningful M&A activity.

In its latest update, Fidelity found that RIA M&A activity continued to accelerate as 2021 came to a close. RIA deals during the month of November totaled $42 billion in AUM, and year-to-date, there had been 182 RIA transactions, totaling $304 billion. These figures were up 61% and 78%, respectively, compared with the year-to-date figure for November 2020.

As Fidelity’s analysis shows, large deals are driving much of the activity, with 75 deals registering more than $1 billion during 2021. This is nearly double the number of deals of this size or greater reached in all of 2020.

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