WealthTrust LLC this week signed a definitive agreement to acquire a majority interest in Foldes Wealth Management, a firm that specializes in providing customized hedging strategies to high-net-worth clients. "This isn't exactly what we're going to do going forward," says Rusty Benton, CEO of WealthTrust, a Nashville-based holding company that now has 11 investment advisory firms in its portfolio. "Like a lot of people, we'll be focused on the broker transition market and will try to find guys who want to go independent and try to pull them into our platform."
Miami-based Foldes Wealth Management has more than $400 million in assets, and represents WealthTrust's first foray into the Florida market. Terms of the deal weren't disclosed.
WealthTrust seeks to acquire majority ownership stakes in wealth management firms that cater to high-net-worth clients. The company generally takes a 51% to 70% position in its acquired firms; in return, it provides them with support services such as human resources, compliance, back office help, and technology support. Upon closing the Foldes deal, WealthTrust will have about $7.6 billion in client assets..
WealthTrust is now turning its attention to the anticipated wave of wirehouse brokers who might be ready to jump ship and swell the ranks of registered investment advisors. "I think there are a lot of brokers and broker teams who do a high percentage of production in fees who would fit well into the RIA side of the business," Benton says.
Benton says WealthTrust is talking with recruiting firms about trying to lure breakaway brokers into its fold, as well as enlisting people at its member firms nationwide to use their professional networks to help attract brokers in the company's existing markets. "We've asked them to be more proactive with their friends in the brokerage side of the business to spread the word about WealthTrust," he says.