Advisory M&A News – 3/4/24

PCS Retirement announces investment from Lee Equity Partners; Guthrie Rouner Group joins Ameriprise Financial; Robertson Stephens Wealth Management acquires the Thrush Group; and more.

PCS Retirement Announces Investment From Lee Equity Partners

PCS Retirement LLC, a retirement plan recordkeeper, received a majority investment from funds managed by Lee Equity Partners LLC, a middle market private equity firm.

PCS Founder and CEO Mark Klein will step away from day-to-day operations and will remain a member of the board of directors. Scott David will join PCS Retirement as CEO. He previously served as the head of individual and retirement plan services and an executive committee member at T. Rowe Price and earlier as president of U.S. retirement services at Fidelity. As part of the transaction, another private equity firm, LLR Partners, will exit its investment in PCS.

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“We are very appreciative of LLR’s partnership and are excited to welcome Lee Equity as our financial sponsor and Scott David as CEO,” Klein said in a statement. “Lee Equity deeply understands the value of our employee-centric business and appreciates our tremendous growth potential, and I’m confident that the addition of Scott will lead us well as we evolve into our next chapter.”

Founded in 2001, PCS Retirement delivers retirement plans to business owners, school districts, municipalities, not-for-profits and individuals.

Guthrie Rouner Group Joins Ameriprise Financial

The Guthrie Rouner Group, led by financial advisers Jim Guthrie and Stephen Rouner, joined the branch channel of Ameriprise Financial Inc. in Tacoma, Washington. The advisers join from Merrill Lynch with $320 million in client assets. The advisers are joined by registered client service associate Nick Vanderlinda.

“The coaching, training and development programs at Ameriprise provide a clear glide path to help our staff members transition from support roles to client-facing advisor roles when they’re ready for that stage of their careers,” Guthrie said in a statement.

Guthrie Rouner Group will be supported locally by Ameriprise employees, including David Cook, branch manager; Peter Groeschel, complex director; and Jamie Frisone, regional vice president. Approximately 1,700 financial advisers have joined Ameriprise Financial in the last five years, according to the announcement.

“The planning software at Ameriprise is easy to use, powerful and comprehensive,” Rouner said in a statement. “This capability will allow us to offer a more robust financial planning experience to clients with less prep time behind the scenes because of the technology integration across multiple systems.”

Robertson Stephens Wealth Management Acquires the Thrush Group

Robertson Stephens Wealth Management LLC welcomed Bill Thrush and Meghan Rump of the Thrush Group, a Connecticut-based team managing more than $180 million in advisory assets.

“I couldn’t be more excited to welcome Bill and Meghan to Robertson Stephens,” said Raj Bhattacharyya, Robertson Stephens’ CEO, in a statement. “Their two decades of experience serving families in Fairfield County make them ideal candidates for our first presence in Connecticut and the fourth office in the New York tri-state area.”

Thrush and Rump, the Thrush Group’s founders, join Robertson Stephens as managing directors and principals. With this addition, Robertson Stephens now has approximately $5.1 billion in advisory assets across 19 locations.

“After an exhaustive search, we are thrilled to join Robertson Stephens,” Thrush said in a statement. “This move allows Meghan and I to provide our clients with a differentiated approach to private investments and deliver a comprehensive wealth planning offering, and [it] puts us in a position to grow well into the future. I look forward to establishing the firm’s presence in Connecticut and working with my colleagues nationwide.”

Mission Wealth Announces Merger With Charles Carroll Financial Partners

Mission Wealth LP announced it is merging with Charles Carroll Financial Partners. The merger is Mission Wealth’s fourth integration in the past 13 months. The firm has grown to 37 shareholders with a single share class.

“We are excited to welcome Bill and Andrew, a father-son team, to the Mission Wealth family,” said Matthew Adams, CEO and managing partner of Mission Wealth, in a statement. “With the merger, Bill and Andrew will continue to provide their clients with personalized, expert guidance.”

Headquartered in Needham, Massachusetts, Charles Carroll Financial Partners specializes in providing personalized investment management and financial planning. The merger expands Mission Wealth’s services in New England.

“Our equity structure ensures that all employees of the firm have the opportunity to become a shareholder through four distinct pathways,” Adams said in a statement. “We are excited to welcome Andrew to the team and are committed to supporting him on the path to partnership along with all other employees of the firm.”

How to Plan for Social Security Cuts

Robert Pagliarini explains why advisers should help their clients use saving and investment strategies that account for contingencies based on the future of Social Security.

Social Security’s Old-Age and Survivors Insurance Trust Fund is currently projected to run through its reserves by 2033. At that time, the fund will only be able to pay out about 77% of owed benefits, based on incoming tax revenues.

In order to prevent benefits reductions, Social Security will have to be reformed in some manner by that time. But should advisers account for the possibility that cuts to Social Security will occur, whether by legislation or legislative inaction? If so, how?

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Top of Everyone’s Mind

The possibility of dramatic cuts to Social Security “is something we think about, and it is absolutely something we talk about with clients,” says Robert Pagliarini, an ambassador with the Certified Financial Planner Board and the president of Pacifica Wealth. In fact, “it is often something that clients bring up first.”

According to Pagliarini, the issue is one of great anxiety for clients of all ages, though younger ones can be particularly cynical about Social Security’s future as it relates to their financial security.

Pagliarini notes that though the conversation might be more urgent as 2033 grows nearer, the possibility of major cuts to Social Security and its solvency “has been a question mark for a while.” Social Security represents a large portion, and often a majority, of the income people expect to receive in retirement. Pagliarini therefore encourages them to “look at that from an objective standpoint: ‘Can we count on this?’”

He expects Social Security will be reformed in some manner to prevent insolvency, because “it’s too important: It can’t possibly go away.” Social Security has been around for so long, and so many depend on it. All the same, “I need to look at worst-case scenarios,” Pagliarini says.

When planning for Social Security income, a financial planner should model different scenarios, according to Pagliarini, such as Social Security being cut in half. “Look at the worst-case scenarios,” he says, and consider other factors such as inflation, health costs and other sources of income.

If a model shows that plausible Social Security outcomes, such as the OASI Trust Fund’s insolvency, lead to unfavorable or even alarming outcomes, “then we need to have some interesting conversations,” Pagliarini says.

He advises clients to focus on controlling the costs over which they have the most control and their “fixed expenses,” such as housing. He also advises some clients that they may have to work for additional years before retiring to achieve the security they want. He suggests people nearing retirement allocate their assets more conservatively to avoid sudden shocks to their savings.

Pagliarini notes that cuts to Social Security are likely to affect younger savers more, but younger savers also have more time to take the corrective actions and planning necessary to adjust.

Social Security Bridging

Social Security bridging—postponing claiming Social Security assets to “bridge” the gap between when a person retires and the age at which a person claims the federal benefit—is one tactic Pagliarini recommends, “especially for wealthier clients, who don’t necessarily need Social Security” because they have enough assets to bridge successfully.

Claiming Social Security later, at age 70, for example, can “lock in a much higher [payout] rate.” By waiting until age 70, a retiree can collect approximately 8% more each year, as compared with starting to collect at age 62, and “an 8% return is pretty good.”

However, this strategy is not appropriate for everyone. It does not always work for people with little savings to bridge the gap and, “in that case, they just have to take Social Security.”

Similarly, if a person’s “health is questionable, just take it now,” because that client may not live to see 70, “and at least they get something out of it,” Pagliarini says. Conversations about a client’s mortality can be awkward, he acknowledges, but for the most part, “it’s not like they haven’t thought of these things themselves,” especially if they are thoughtful enough to consult a planner or adviser.

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