Retirement plan aggregator Captrust shores up wealth management business

Captrust Financial Advisors, which has aggregated its way to becoming a retirement plan empire, is also quietly building a sizeable wealth management business.

The Raleigh, North Carolina-based company that made seven acquisitions last year and has announced two so far this year, is a private company that doesn’t share specific financial details. But a revenue announcement this week suggests an increased focus on the wealth management side of the business.

Captrust, which added a record $87.6 billion in client assets last year, reported a 27% increase in total revenues, which compares to a 25% increase in 2019.

Through Feb. 15, Captrust reported $600 billion in assets under advisement, which is primarily the retirement plan side of the business, and $60 billion under management, which includes $36 billion in institutional asset management and $24 billion in the fast-growing wealth management side of the business.

To underscore the growing impact of wealth management, Captrust this week announced Eddie Welch will take on the new role of head of the wealth management group. He came to Captrust in February 2020 when his $5.5 billion advisory firm Welch Hornsby was acquired by Captrust.

Welch said selling the firm he co-founded in 1988 was not the original plan in 2019 when they hired an investment banker to “take the firm to the next level,” by potentially making acquisitions.

“At Welch Hornsby we had never done an acquisition, and we had no intention of selling,” he said.

Fast forward to 2021, and Welsch said, “Captrust’s wealth management offering has only grown, including the addition of new services like tax consulting and compliance,” he added. “I am excited to lead the next phase of tremendous growth the firm is embarking on.”

Mark Bruno, managing director at Echelon Partners, said Captrust is a leader among aggregators making the gradual shift beyond retirement plan assets into the more lucrative wealth management space.

“The wealth management business has significantly higher margins than the retirement plan advice business and that has driven a lot of the M&A activity we have seen in this space in recent years,” he said. “That, coupled with the opportunity to provide wealth management and planning services to participants in or out of a plan, has made this convergence strategy a top priority for many retirement specialists.”

According to the Captrust report, since the company was founded 23 years ago it has experienced a 22% compounded annual growth rate.

“We believe that one of strongest indicators of a company’s health is organic growth,” said Captrust president Ben Goldstein. “Despite the market volatility, we remained steadfast in our growth trajectory and achieved notable organic revenue growth.”

In his new role, Welch said he will report directly to Captrust co-founder and chief executive J. Fielding Miller.

Welch will directly oversee the managers of the client services, wealth services and participant advice service group.

“My job is to make sure the client experience is what we desire it to be,” he said. “This is a wonderful opportunity to have business lines that complement each other, and to ensure we’re getting the most of business forces.”

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