Berger Financial Group has spun out from Cambridge Investment Group to become a $1 billion registered investment adviser.
Plymouth, Minnesota-based Berger was founded in 1981 and grew into the largest advisory firm operating under Cambridge’s corporate RIA.
“As our own RIA we have more freedom and flexibility on the things we want to offer,” said Berger president Nick Asmus, citing robo-advisory services and flexibility over marketing among the areas the firm will be able to develop as an independent RIA.
“We’re also active in the M&A space and this gives us the ability to move quicker on deals,” he added.
The firm was converted to an employee-owned stock ownership plan last year, which Asmus believes will further enhance its ability to make acquisitions because it provides ownership stakes to the sellers.
Berger made 11 acquisitions since 2010, including four last year. Asmus said there are a couple of deals he hopes to close by the end of 2020.
“We feel the [employee-owned stock ownership] is so much more competitive because we’re able to offer equity ownership that other firms wouldn’t be able to offer,” he said. “You get the purchase price and the ownership as a form of compensation, and the staff will also achieve that benefit.”
Mark Bruno, managing director at Echelon Partners, said the Berger move to independence, which includes 45 employees, is part of a recent trend a big breakaways.
“We are forecasting that there will be 25 $1 billion breakaways this year, which would be the highest level since 2015,” he said. “With so much disruption in the markets earlier this year, there is an increased opportunity for some of these larger teams and firms, which are often well-run and professionally managed, to add more advisers, do tuck-ins or execute on acquisitions.”
Asmus said the market Berger is pursing in the $100 million range is flush with opportunities.
“We’re a younger, hungry firm, and our vision is to continue to acquire,” he said. “The more we do it the better we get because we’re learning lessons along the way. This industry still has a huge imbalance of buyers and sellers, and [COVID-19] will only speed up the flow of sellers in the market and that will be hard to absorb.”
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