Atlanta-based Brightworth has agreed to merge with McGill Advisors of Charlotte, N.C., to form one of the largest RIA firms in the Southeast. The transaction is expected to close in late June.
The combined firm will have about 1,250 clients, 17 partners and oversee $2.9 billion in assets. For Brightworth, it is the second transaction in less than a year. Both deals involved liftouts of RIAs from professional services firms in adjacent markets. The first transaction occurred last July, when it added two partners from Smith & Howard, a CPA firm in the southeast.
McGill Advisors was created in 1999 by John McGill and Bob Sytz to serve the investment needs of dental professionals. McGill launched what is now the McGill Hill Group, a national consulting firm that provides business planning to the dental profession, three decades ago. McGill Hill was providing some financial planning for dentists but decided forming an RIA was necessary to make sure the plans were implemented.
Sytz, currently the managing partner of McGill Advisors, will join the management committee of Brightworth. After the merger is finalized, McGill Advisors will retain its name as a separate division of Brightworth, as the McGill brand is well-known in the dental community.
McGill Advisors has grown into an RIA with $1.4 billion in assets, six advisors and a total staff of 15. The rapid growth with a relatively small staff demonstrates the efficiency an advisory business can achieve when it has a steady source of new clients.
All 15 McGill staffers are staying on and four will become Brightworth partners, according to Ray Padron, managing partner of Brightworth. Because McGill has a national presence, the merger will not only create one of the largest firms in the Southeast, but also give it a national footprint. The Charlotte-Atlanta corridor is one of the fastest-growing regions in the United States.
“It’s a different business and a different market,” Padron said. Brightworth has a handful of dentists and physicians as clients but specializes in corporate executives and business owners.
Sytz, who plans to remain with the firm for another decade, said succession planning was one of the primary motivations for doing the deal. “We wanted a transparent succession plan so our clients would be working with a fee-only, independently owned RIA firm,” Sytz said.
While McGill Advisors will now be a Brightworth division, it will retain a relationship with The McGill Hill Group, which it relies upon as a major source of referrals.
John McGill, founder of The McGill Hill Group, offered another reason for the transaction. As consultants to dentists, his firm is always trying to find ways to help dental groups increase profitability and achieve economies of scale. In McGill Hill's case, it became apparent that McGill Advisors could do that more effectively with another RIA firm.
The transaction was financed by Dallas-based Fiduciary Network, which acquired an equity stake in Brightworth in 2007.