Financial planning pioneer Harold Evensky has merged his firm with one owned by a former pupil, creating a South Florida wealth management firm with $1.9 billion under management.
The union of Foldes Financial Management of Miami and Evensky & Katz Wealth Management of Coral Gables, Fla., comes 18 years after founder Steven Foldes set out on his own after being mentored by Evensky. The new firm created by the merger will be the largest independent RIA in southern Florida.
“I left with $25 million to $30 million in assets under management and I’m returning with $600 million,” said Foldes, who has grown to become an influential voice in the planning community in his own right. “Harold should be proud of what he has created.”
The merger was completed 1 a.m. Tuesday, about a year and a half after the two parties started discussing the idea, according to those involved in the deal.
The merged firm goes by the name E&K-FFM and will be housed entirely in Evensky’s office in Coral Gables, according to Mark Hurley, who acted as one of the architects of the deal as CEO of Fiduciary Network LLC, a shareholder in Evensky & Katz.
As the largest independent, fee-only financial advisory firm in South Florida with $1.9 billion in assets, Hurley says the firm is positioned to become a major player in that market. Indeed, it remains something of an oddity that there are not more large RIA firms in the state of Florida, where there is a great deal of wealth due to its status as a retirement haven.
Evensky, a nationally prominent advisor who is active in the industry as both a speaker and author, runs the business with his wife, Deena Katz.
The new firm has 23 employees and about 10 partners, according to Hurley. There were no layoffs as a result of the move, he added.
“This is a merger where the firms know each other well from day one,” Hurley said. “You couldn’t find something better in terms of having people who need the least amount of adjustment, from the client’s perspective.”
Under the terms of the merger, Evensky is chairman of the firm and Foldes is vice chairman, Hurley said. Evensky could not be reached for comment.
"Their plan is to build the business," Hurley said.
The firms serve a similar type of clientele—professionals, business owners, corporate executives and other high-net-worth individuals with between $1 million and $15 million, according to Foldes.
It’s a client base that has a strong need for retirement planning, which is a strong focus of both firms, he added.
“If you asked what are the areas we focus in on, retirement would be first and foremost,” he said. “The second area would be educational planning--working with clients as it relates to funding kids’ educations.”
Mentor, Pupil Reunite
Foldes described the deal as one of those “full-circle” moments in life, reuniting him with someone he first met nearly 30 years ago as a 36-year-old from Hazleton, Pa., who had moved to Miami after making a fortune from the sale of his family’s footwear business.
At the time, financial advisors were a rare breed, Foldes notes, and he was just looking for someone he could trust to help him make wise use of the millions he made through the sale of “Jelly” shoe sandals—a hot fashion item in the 1980s.
That’s when he hit upon Evensky, who even back then was carving out a reputation as an advisor who focused on clients’ interests, he said. “He had an immaculate reputation in the community when I checked him out,” Foldes said. “He had all the things you look for in a trusted advisor.”
The two got along so well that Evensky offered Foldes--who was both a trained lawyer and businessman--a job as a CFP-in-training five years later. Foldes accepted the offer and learned the advisory business under Evensky’s tutelage, until he left in 1996 to start his own firm. “I’m an entrepreneur at heart,” he said.
Foldes, who owned 100 percent of the firm before the merger, said the merger grew out of his need to find reliable partners--something essential to give his clients assurance that the operation would continue if Foldes were unable to perform his duties.
That security has been achieved through the merger, he said, along with his desire to keep his staff intact and maintain the firm’s fee-only, fiduciary standards.
“The real issue was, is there an existing infrastructure that can handle the large number of clients we have?” said Foldes, whose firm had about 450 clients before the merger.
On his own time, Foldes is a star tennis player who has won senior tournaments in Dade County, the state of Florida as well as in Chile and Argentina.