Hub International’s Ambitious Vision for the Retirement Market

Hub International started its buying spree of established retirement plan advisory and wealth management firms back in January, when it announced the acquisition of Sheridan Road Financial.

The buying streak continued in September, when Hub announced six acquisitions of firms that were part of Global Retirement Partners (GRP). This round of acquisitions brought on board  EPIC Retirement Services, StoneStreet, Washington Financial, Perennial Pension & Wealth, WhartonHill and Inter-Mountain Retirement Partners (MRP).

This week, the leaders of these advisory firms sat down for a wide-ranging discussion with PLANADVISER editors, and included in the conversation was David Reich, national president, Hub retirement and private wealth. The adviser firm leaders spoke frankly and enthusiastically about their high hopes and expectations for their future at Hub. They also emphasized the importance of the fact that, as GRP member firms, they carried into the Hub negotiations a shared vision for the future—not to mention the fact that they all agreed to be represented by the same legal counsel.

“This whole thing actually started with individual conversations with each firm,” Reich noted. “We realized pretty quickly, however, that the GRP firms had such great alignment to begin with, and that we could make this work in one go. We couldn’t be happier with how the six acquisitions came together.”

According to Reich, Hub is already seeing an even greater amount of cross-selling than was anticipated when these deals closed earlier this year. At the same time, he said, the newly acquired advisers are already taking great advantage of Hub’s nearly 600,000 commercial relationships to grow their own practices.

In comments echoed by her colleagues, Barbara Delaney, founder of StoneStreet, emphasized the back-office efficiencies her firm is already enjoying as part of the larger Hub organization. She said that, in recent years, the demands of serving existing clients have made prospecting and growing the practice more difficult. But moving forward, she and her staff are able to focus much more time on business development and on building much more holistic relationships with existing clients. In addition, she and the other adviser firm leaders cited Hub’s broad employee benefits capabilities, especially health savings accounts (HSAs) and financial wellness tools. Delaney said being able to efficiently deliver such services presents a clear advantage in today’s marketplace, given that finance leaders at companies want a rational benefits strategy—not a jumble of distinct products and services.

Joe DeNoyior, who prior to the acquisition was CEO of Washington Financial, said the backing of Hub is already allowing his firm to deliver a wider and more holistic scope of services—while enjoying a more efficient back-office process. He said he and his colleagues chose Hub because they are focused on where plan sponsors are going from a total employee benefits approach. The convergence of health and wealth is here, he said, arguing Hub is in a great position to fulfill this vision for plan sponsors.

From a brand integration perspective, the advisers said they are still at different stages, and Reich said Hub is happy to grant them the time they need.

“The last thing we would want to do is go in and break the business models that we purchased,” Reich explained. “The real value of our acquisitions is in the expertise of these fantastic advisers and their dedicated staff.”

Another factor the adviser leadership spoke about was the new career paths that have opened up for their staff now that they are part of the corporate Hub International entity. In fact, some staffers have already taken on new roles with Hub, such as the former COO of Washington Financial taking on a high-level role at Hub corporate to help lead the ongoing integration efforts. 

Offering some advice to independent firms thinking about selling their practices to an entity like Hub, the advisers said it is very important to be choosy and even a bit defensive.

“We knew it would be important to our long-term future to become part of a well-diversified company that does more than just retirement advice,” DeNoyior said. “We looked very closely at how steady their funding is, and at what their returns to investors have been over time, because we wanted to make sure our practices could thrive as the industry landscape evolves. This was not an exit strategy.”

The advisers all agreed that “health and wealth consumerism” is a lot different today than it was 10 years ago. They asked themselves, who has the data, the financial wellness capabilities and the capital to grow? Who could offer the financial wellness endgame? Ultimately, they concluded that Hub International, as a benefits broker, was looking at the same things and was speaking the same language.