Leading RIA firms were enjoying brisk growth at the turn of the millennium, so convincing them to sell meant paying major premiums. In a typical transaction, WealthTrust initially would purchase majority stakes in the target firms and then increase its position at a later date, often buying the entire entity. WealthTrust reportedly had a complex formula via which the individual firms could receive equity in the event of an IPO, but that big liquidity event never happened.

Considered a visionary and an eminently decent person by colleagues, Benton was forced to raise significant capital; some said more than $100 million. Still, in November 2007, WealthTrust purchased two RIA firms, Fairport Asset Management in Cleveland, and Axiom Asset Management in Radnor, Pa. That brought its network to 11 RIA firms with a total of $8.6 billion in assets according to a company press release.

In 2008, Benton would initiate his final acquisition taking a majority interest in Foldes Financial Management in Miami. Then the financial crisis came and funds dried up. Until then, everything was going well for management and the affiliated firms.

WealthTrust, which had been partially financed by Morgan Keegan and Region’s Bank, ended up turning to Falcon Investments, a distressed debt investor. After Falcon took control of WealthTrust, advisors from the different firms were called to Atlanta for a meeting. Executives at the private equity firm told the advisors they had shopped the firm and discovered the value was in the individual RIA firms, not home office execs or the platform itself.

That in itself is hardly an earth-shattering revelation. Brazilian private equity firm 3G has teamed with Warren Buffett to extract billions in value by buying consumer staples companies like Heinz and Kraft and firing thousands of senior “managers.”

For advisors like Foldes, it wasn’t the cruise he signed up for. “Rush was the visionary I had hitched my star to as it related to building WealthTrust into a national network of RIAs and I felt uncomfortable with the changes,” he recalls.

Falcon had every right to expect a return on its investment, he acknowledges. “I respected Falcon and understand what private equity companies do, namely make money for its investors, but it wasn’t what I had signed onto,” Foldes says.

Even before Falcon stepped in, another WealthTrust firm, Kingfisher Capital in Charlotte, N.C., had negotiated its exit. In 2009, Kingfisher was able to buy back its independence at a price its chief investment officer, Alex Miles, told Financial Advisor was fair but “no steal.”

In 2012, Foldes followed in Kingfisher’s footsteps and bought back his own firm. Because WealthTrust ran out of money before it could buy all his stock, Foldes only had to buy back a bare majority of his firm. Two years later in 2014, he merged it into Evensky & Katz/Foldes Financial.

Then in 2015, Lee Equity reportedly sold Wilbanks, Smith & Thomas of Richmond, Va., back to their founders, making it the third of the 12 firms the original WealthTrust acquired to repurchase its business. One can only wonder how many other RIAs at firms that sold to WealthTrust wish they had the wherewithal to buy back their firms.