The Bahnsen Group has an office on both the East and West coasts, and now it has an office in the middle of the country with today’s announcement that it has brought on board Minneapolis-based Story Capital LLC.

The Bahnsen Group, a $3 billion wealth management firm founded by managing partner David Bahnsen, has hired the team at Story Capital rather than buy it outright.

“We’ve hired them exclusively, and have the first right of refusal to purchase their legacy business,” Bahnsen said. “This is a hiring, and an assimilation into our business, but we won’t transact on the value of their legacy business until a future date to give them time to grow. And both parties are making sure the marriage is meant to be.”

For its part, the people at Story Capital are free to walk away from this arrangement just like hired employees at any company can do.

Meanwhile, Story Capital’s five-member practice is now branded under The Bahnsen Group’s nameplate. Its forte is serving C-suite and other senior corporate executives in the Twin Cities area. The firm was founded by Phillip Barnhill, whose job title had been advisor and equity compensation strategist. His new title with The Bahnsen Group is senior wealth advisor and director of risk management.

His wife Michele, who was director of operations and client experience at Story Capital, is now listed as office manager in the Minneapolis branch. Their son, Stoddard, who was listed as an advisor and planning director at Story Capital, is a lead advisor in The Bahnsen Group's private wealth advisor group. 

The other staff members making the transition to The Bahnsen Group are Sarah Leitzke, joining the services and planning department, and Reid Gustafson in the operations department.

David Bahnsen said he fully expects his firm to eventually purchase the business of the former Story Capital.

“If we would put a multiple on cash flows, I think they’ll be more valuable internally in two years than they are now,” he explained. “We wanted to just focus on the transition, integration and getting the senior members of their team—the mom and dad, who are the founders—really comfortable with how we do business. Because they want to walk away in a couple of years and hand it off to their adult son, Stoddard, who is the heir apparent, they would do so inside the more developed infrastructure of The Bahnsen Group. That’s their strategic plan.

“But rather than effect a capital transaction to make it all permanent and official now, we’re purposefully waiting to make sure it all sticks,” he added.

Bahnsen said the investment management side of Story Capital’s business is shifting, and that was a big driver in their outreach to team up with The Bahnsen Group.

“They are enamored with the way we manage money,” Bahnsen said. “That’s what started our courtship.”

The Bahnsen Group’s bread-and-butter investment management philosophy centers on dividend-paying equities. Bahnsen noted that Phillip Barnhill contacted him after he read his book, “The Case for Dividend Growth: Investing in a Post-Crisis World.”

“He loved it and reached out,” Bahnsen said. “He started reading more of my material, and from there we developed a relationship around our shared beliefs and principles.”

He noted that the advisor group at the former Story Capital will continue to focus on providing wealth services to corporate executives in the Twin Cities area. Bahnsen added that aside from their C-suite market segment, which he said hasn’t been an intentional focus area at The Bahnsen Group, the other big thing the Barnhills bring to the table is their deep background in insurance services and planning.

“The Barnhill family has three generations of involvement in life insurance,” Bahnsen explained. “We’ve always done risk management, but have done so incidentally. It’s something I think we need to do better. Our intention after we get this transition complete is to have them build out for us a risk management department that will be much more suitable for a company of our size.”

David Bahnsen left his job as a managing director at Morgan Stanley and started his independent firm in 2015 by affiliating with registered investment advisor HighTower Advisors LLC. The firm now has 34 team members with offices in Minneapolis, New York City and Newport Beach, Calif.

The company made a splash last February when it announced that former Trump administration National Economic Council director Larry Kudlow joined the company as an economic advisor.

“I talk with Larry almost every day, and he will be a part of our organization for many years to come,” Bahnsen said.