Deals & People January 17, 2023

Advisory M&A

Hub adds four firms in 2023; Fidelity buys equity management firm; CAPTRUST acquires $2.3B advisory in Nashville; and more.

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Hub Lands 4 Firms to Boost Employee Benefits and Real Estate Insurance Practices

Hub International Limited is off to a busy start in 2023, announcing four acquisitions in January across the employee benefit and commercial insurance spaces as it continues its expansion as a full-service employee benefits, financial wellness and retirement solutions provider.

The Chicago-based insurance brokerage and financial services firm announced in a press release that it acquired Grace & Porta Benefits, an independent firm specializing in employee benefits consultation. The Brighton, Michigan-based team will join the Hub Midwest East division in a transaction the firms closed in 2022.

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Hub also added to its employee benefits and insurance options with the acquisition of Creative Benefits & Insurance Solutions LC, Hub announced in a release. CBIS is located in Utica, Michigan, and provides corporate employee benefits, commercial and personal insurance, and risk management services to clients. The firm was founded by Patricia Shall, its president, who along with her team will join Hub Midwest East. 

Hub also boosted its commercial insurance capabilities with the purchase of the assets of EST Inc., which include the Coast to Coast Insurance Brokers and Sage Risk & Insurance Management, according to a press release. CCIB and SRM provide commercial insurance and risk management to businesses of all sizes. The firms were founded by CEO Shannon Tornoe, who is based in Wayne, Pennsylvania, and will join the Hub Northeast team in Blue Bell, Pennsylvania.

Finally, Hub said it added O&S Insurance Brokerage Group and OSA Insurance Brokerage Services LLC to increase its commercial insurance opportunities for clients in the real estate industry, including real estate owners, developers, contractors, management companies and condominium/co-ops, according to a press release. OSA Managing Partner Max Osa will join Hub Northeast through the transaction of its New Jersey and New York offices.

Hub did not disclose terms of the deals.

Fidelity Acquires Equity Management Firm Shoobx

Fidelity Investments has purchased an automated equity management provider for private companies called Shoobx Inc., according to a press release.

Fidelity said the acquisition furthered its push to serve the private market up to and including an initial public offering. The companies did not disclose the terms of the deal.

Shoobx will sit in Fidelity’s stock plan services business, which provides equity compensation plan recordkeeping and administration services to about 700 companies with 2.5 million plan participants, totaling more than $250 billion in plan value, according to the release. Stock Plan Services is part of Fidelity’s workplace investing division.

Shoobx, also based in Boston, provides automated equity management for areas that include employee compensation, capital raising and exiting the business. Fidelity had established a strategic relationship with the firm in 2021, combining Fidelity’s equity compensation and benefits administration with Shoobx’s equity management, board management tools and tools for secure storage and sharing of information, according to the release.

Simplicity Group Snags Retirement Plan Solutions Provider NIW

Simplicity Group Holdings Inc. has acquired the NIW Companies Inc., an estate, business and retirement planning provider for high net-worth and high-income earning professionals, according to a press release.

The Plano, Texas-based NIW group provides products and technology geared toward employee retention, succession planning, deferred compensation and cash-accumulating life insurance policies. Founders Grace Barnard, Judy Lane and Daen Wombwell will join Simplicity Group as partners through the transaction.

“NIW’s Kai-Zen and Ilia platforms are currently utilized by a variety of Simplicity companies,” NIW founder Lane said in the release. “Our platform ties in nicely to Simplicity’s existing Tax-Free Retirement educational program and provides a strategic opportunity for advisers in the IUL [indexed universal life insurance] space.”

The acquisition marks Simplicity’s 48th as the firm seeks to expand its insurance and wealth management offerings and client distribution base. The Summit, New Jersey-based firm works with independent financial advisers and agents with investment, annuity and life insurance solutions with a focus on client education, consumer value and partnership.

Mercer Advisors Acquires Empyrion Wealth Management

Mercer Global Advisors Inc. announced the purchase of Empyrion Wealth Management Inc. to expand its presence in California, according to a press release.

Roseville, California-based Empyrion is a comprehensive wealth management firm working with family stewards, women in transition and retirees. President and Founder Kimberly Foss started the firm in 2002, and she and her team service 90 clients with assets under management of about $250 million, according to the release.

“[Mercer’s] comprehensive ‘family office’ approach to client care with in-house services like estate planning, tax consultation and tax return preparation, etc., adds the depth and breadth of service I was looking for and allows me to offload burdensome back-office work so that I can focus on what is most important – my clients,” Foss said in the release.

Denver-based Mercer said Empyrion is the 15th women-owned advisory practice that has been acquired since 2016. Mercer is a total wealth management firm that provides fee-based investment management, financial planning, family office services, retirement benefits and distribution planning, estate and tax planning, insurance solutions and corporate trustee and trust administration services. Its parent company is Mercer Advisors Inc., which is majority owned by both Oak Hill Capital and Genstar Capital, and it oversees $46 billion in client assets.

CAPTRUST Expands in Nashville with $2.3B RIA

CAPTRUST Financial Advisors LLC acquired a second Nashville-based registered investment advisory, the firm announced in a press release.

CAPTRUST purchased TrustCore Financial Services LLC, led by CEO Gary Dean and overseeing $2.3 billion in assets from individuals, families, endowments and foundations. More than 75% of the firm’s business is based in central Tennessee, according to the release, and the firm brings 48 new employees and 16 financial advisers to CAPTRUST.

“We look forward to tapping into the valuable resources the firm has to offer to make our clients’ experience even better,” CEO Dean said in the release.

This deal closed in late 2022 and is the 63rd for CAPTRUST since 2006. TrustCore will take on the CAPTRUST branding, as in its other transactions.

It is the second office CAPTRUST has acquired to expand its presence in the region, having brought on Nashville-based New Market Wealth Management in 2021, adding $275 million in client assets.

Raleigh, North Carolina-based CAPTRUST has 1,200 employees across 70 locations and more than $100 billion in assets under management and more than $750 billion in assets under advisement, as of September 30, 2022.

Wealth Manager Integrity Closes Gladstone Acquisition, Bringing Assets to $40B

Integrity Marketing Group LLC announced the closing of its acquisition of Gladstone Wealth Partners, bringing Dallas-based Integrity’s assets under management and advisement to about $40 billion, the firm announced in a press release.

Integrity, a distributor of life and health insurance, as well as wealth management and retirement planning solutions, expects the purchase of Boca Raton, Florida-based Gladstone to strengthen Integrity’s offerings for financial planning and amplify its wealth management expertise. The partnership was first announced in August, and terms were not disclosed.

“By integrating Integrity’s omnichannel capabilities with Gladstone’s top-tier financial service expertise, we can offer more comprehensive and holistic life, health and wealth planning solutions to more people than ever before,” Bryan W. Adams, co-founder and CEO of ,Integrity said in the release.

Robert Hudson, founder and chairman of Gladstone, and Richard Frick, CEO of Gladstone, will continue leading operations at the firm. They will also take on additional roles as managing partners at Integrity, according to the release.

Integrity has a partner network of more than 500,000 agents and advisers, and Gladstone has more than $13 billion in assets under management, according to the companies.

Arthur J. Gallagher Buys California-based Insurance Provider

Arthur J. Gallagher & Co. has opened the new year with the purchase of Sacramento, California-based John C. Breckenridge Insurance Solutions Inc., according to a press release. The Rolling Meadows, Illinois-based Gallagher did not disclose terms of the deal.

JCB is a brokerage and plan management firm specializing in student health and intercollegiate athletics insurance for higher education institutions. John Breckenridge, Lisa Breckenridge and their team will remain in Sacramento under the direction of Kevin Garvin, head of Affinity North America for Gallagher’s retail property and casualty brokerage operations, according to the companies.
“JCB expands our student health insurance market expertise and product offerings on the West Coast,” J. Patrick Gallagher, Jr., chairman, president and CEO of Gallagher, said in the release.

Commonwealth Network Now Includes Texas-based RIA with $1B AUM

Commonwealth Financial Network said it has added Cedarwood Financial Partners to its network of independent financial advisers, bringing on nearly $1 billion in client assets, according to a press release.

The Temple, Texas-based Cedarwood Financial will bring its team to Commonwealth with the aim of further growth and development, according to the release. Cedarwood provides financial planning services to individuals and businesses, with a focus on retirement income and planning strategies, executive benefits and 401(k) plans, as well as trusts and estate transfers.

“We knew we wanted to own our own business. Once we saw that we could have the freedom and the exceptional back-office support in one, we couldn’t unsee it,” Dylan Ripley, Cedarwood managing partner, said in the release. “From access to more investment options and integrated technology to control over how we serve our clients and charge for those services, Commonwealth was the obvious choice.”

Waltham, Massachusetts-based Commonwealth currently oversees more than $273 billion in assets, with more than 2,000 independent financial advisers in its network, according to the release.

Wealthcare Advisory Acquires RIA Sommers Financial

Wealthcare Advisory Partners LLC has added full-service registered investment advisory Sommers Financial Management to its direct advisory business, the West Chester, Pennsylvania-based firm announced in a press release.

The acquisition is Wealthcare’s third RIA buy in the past six months, as the company seeks to expand its network of advisers using its planning, investment and trading management services, according to the release. Sommers Financial, with offices in

in Scappoose, Oregon, and Tucson, Arizona, will bring on more than $100 million in assets under management, raising Wealthcare’s AUM to $5 billion.

“Our integrator approach to M&A growth enables our group to benefit from the experience of our new partners while we strengthen our comprehensive offering for advisors,” Matt Regan, president of Wealthcare, said in the release.

Sommers Financial founder Adam Sommers will remain, along with his team, the release said.
Data & Research January 17, 2023

Research Shows Workers Favor Guaranteed Income Over Financial Wellness Tools

Almost half of respondents agreed annuities can offer safety and stability, though other research shows in-plan defined contribution annuities are not picking up among employers.

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Retail sales of annuities have been booming on higher interest rates even as new data shows that workers want lifetime income products more than other employer resources aimed to boost their retirement readiness.

But a disconnect remains for in-plan defined contribution annuities, as other research shows that employers are still hesitant to offer annuities in part due to fiduciary concerns.

Among the resources available to workers from their employers to help them “pivot” into retirement, 67% of respondents are most focused on a having their employers implement a guaranteed income product—ahead of access to financial consulting, retirement calculators and in-person or town hall-style education forums—according to the U.S. research snapshot of the State Street Global Advisors 2022 Global Retirement Reality Report.

The U.S. research slice revealed workers’ thoughts on annuities, showing 46% of workers agreed or strongly agreed with the statement that annuities provide safety and stability, 40% agreed or strongly agreed with the notion of annuities being an essential part of providing income in retirement, 32% agreed or strongly agreed with annuities having a bad reputation for limiting access to savings and 27% of respondents said they don’t represent good value for money.

“Of the global sample, Americans were most aware of and keen on annuities, with some considering the product tantamount to retirement income,” states the report’s closing thoughts section, which attempts to offer insights for employers, advisers and policymakers to support greater retirement plan access, coverage and income.

Although some employers have changed their 401(k) plans for 2023, they have generally not embraced additional enhancements that were provided by legislation passed in 2019, data released this year by Alight Solutions shows. Employers largely have not, according to research, embraced adding in-plan annuities to defined contribution plans, which was one of the legislative provisions of the Setting Every Community Up for Retirement Act of 2019.

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Retail Annuities Ride On

The lack of in-plan options has not slowed annuity sales for the insurance industry, which has seen a huge influx of flows from outside the industry, says Mike Downing, chief operating officer and chief actuary at Athene Holding Ltd, which had the highest annuity sales as tracked by industry association LIMRA when looking across all sectors in Q3 2022. 

“One of the cornerstone qualities of retail annuities is the speed at which new purchases react to rising rates,” Downing says. “As a company, when we look at how we’re going to look at our competitiveness, we look at the current investment environment. If we were to invest money today, what do we think we can earn and what can we guarantee to policy holders?”

Fixed income annuities have led the charge, as purchases can lock in relatively high rates of return, with some north of 10%, Downing says.

“We expect the trends and conditions to still continue to remain very strong in the insurance sector,” Downing says. “In particular for Athene, because of the strength of our balance sheet and low manufacturing cost we expect to be able to maintain very competitive position in the market.”

Retirement Expectations?

Retirement income may be a factor as more people expect to live longer in retirement. The most popular retirement age for U.S. workers is from ages 65 to 69, and 26% of Americans expect to live past 90, SSGA data shows.

Alongside this longevity expectation, 30% of U.S. workers showed the highest concern for making their money last in the later years of retirement, defined as age 80 and above, and for later-life health care costs, SSGA research finds.

The SSGA report also revealed that 84% of U.S. workers expected to enjoy some variation of retirement — 59% of respondents said they expect to have a full retirement and 25% said their retirement plan does include partial work. Among workers, 10% said they did not think retirement would ever be financially feasible, and of those who don’t see retirement as a practical reality, 6% are eager to stay engaged in work life, according to SSGA.

The feasibility of earlier retirement may come down to how the industry can solve for decumulation, according to Athene’s Downing.

“In the qualified space the holy grail the default option, and that’s where I think there is a lot of interest [in annuities],” Downing says. “A target-date fund is actually a flawed product, because although it targets by age, there’s no natural protection. There’s no protection again rising rates, because a large amount of that money is in bond funds, so as rates rise the markets collapse.”

While TDFs demystify the accumulation phase, he says, they don’t deal with decumulation as retirees start spending down. 

“To me there’s a better mousetrap out there,” he says. “We just have to figure out some of the regulatory barriers or some of the rule regimes that exist in qualified plan space versus the insurance space. Once somebody can figure that out I think you’ll see a whole new type of retirement plan in the 401(k) space.”

Data for the State Street Global Advisors 2022 Global Retirement Reality Report was gathered by global analytics firm YouGov. An online survey was used to collect information from from 3,553 individual retirement savers with access to employer-sponsored defined contribution plans between July 20 and August 22, 2022.

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