Mercer Advisors Inc. continued its torrid acquisition pace with the purchase of McDermott Advisory Group, the company announced Tuesday.
Mercer, which is based in Denver and has a growing national footprint, has bought four RIA firms this month alone.
Wilmington, Del.-based McDermott Advisory Group’s five-member team serves roughly 150 affluent and high-net-worth clients and handles more than $150 million in assets under management. The firm was founded 12 years ago by Daniel McDermott, a certified financial planner with 30 years of industry experience.
The acquisition expands Mercer’s presence on the East Coast. It now has 36 branch offices across the country and nearly $15 billion in assets under management.
In a press statement announcing the deal, both parties said it enhances McDermott Advisory’s service capabilities while providing Daniel McDermott an opportunity to transition both his company and his own late-stage career.
“The ability to design my ‘life after’ sale was important to me as I transition from active operator to just focusing on doing things I love,” McDermott said. “Working with Mercer Advisors extends my career by creating work-life balance.”
McDermott Advisory is the first hybrid RIA bought by Mercer. David Barton, Mercer’s vice chairman who leads its M&A activity, said in an interview that Mercer isn't changing its focus toward hybrid RIAs. But McDermott Advisory offered a blueprint for the type of hybrid he'd be interested in acquiring in the future.
"Dan is a great financial planner and he has a super team," Barton said. "It just so happens he's an independent registered advisor on the B-D side with Cambridge [Investment Research Inc.]. He had an element of a B-D business that formerly was a large percentage of his practice from a revenue standpoint. But over the past several years he was super successful in migrating his clients from a commission-based to a fee-based model. I love that."
He added that McDermott Advisory has whittled down its revenue on the B-D side to roughly less than 3 percent.
"His firm is a case study in success in how to migrate from a B-D model to a RIA model using the hybrid structure," Barton said. "If I can find firms that have the same ability to migrate, that's a firm we're interested in because it shows they're committed to the RIA model."