After beginning the yr with greater than half a billion {dollars} in managed belongings, Los Angeles area-based Falcon Wealth Planning has made the primary acquisition within the agency’s historical past.
The deal to purchase Rivermark Wealth Administration was accomplished on Thursday, eight years—virtually to the day—after Falcon was based by Principal Gabriel Shahin.
Shahin began out with eight purchasers and $5 million in AUM on March 5, 2015. Immediately, the Falcon staff contains 45 folks, together with 13 licensed monetary planners, overseeing near $600 million for greater than 800 purchasers and 14 retirement plans. The agency operates out of 14 workplace areas in California, Seattle, Chicago, Las Vegas and Tempe, Ariz.
Final yr, Shahin was a winner of the Wealth Administration Business Award’s Rising Star of the Yr award.
Falcon’s inaugural acquisition expands the agency’s footprint within the San Francisco Bay Space and establishes a basis for continued development within the nation’s Northwest, Shahin stated.
San Jose-based Rivermark was based by Ron Guay, who makes a speciality of tax planning and advises on about $250 million in shopper belongings. After starting his profession in company finance, Guay made the transfer to non-public finance and tax planning in 2018, when he launched his follow on the CGN platform, previously often called Garrett Funding Advisors.
In 2020, he moved to Prosperity Capital Advisors, an Ohio-based RIA platform with $1.7 billion in belongings, and formally grew to become Rivermark.
“What I’ve realized on the journey in finance, each company and client, is my success has been my capacity to assist purchasers join their spreadsheets to their tales,” he stated in an announcement.
Negotiations started in early 2022, and each events took their time guaranteeing values had been aligned.
“I selected Falcon as a result of their technique of delivering monetary recommendation via schooling and empowerment aligns with my values and strategy as an advisor,” Guay stated. “Serving all purchasers on a fiduciary foundation, taking the time to essentially perceive every shopper’s distinctive wants and priorities, and offering first-class tax and monetary recommendation is a components for making a optimistic impression and one thing I am excited to assist the agency convey to the Bay Space.”
Shahin stated he “bootstrapped” his option to this milestone, eschewing broadly used RIA launching platforms and exterior financing to construct the agency himself from the bottom up.
Till now, Falcon’s development has been solely natural, he stated, via shopper acquisition—bolstered by an aggressive advertising and marketing program to which Shahin dedicates as a lot as 15% of income—and focused “acqui-hires” that usher in books of enterprise—primarily via using LinkedIn.
“Our course of is the whole lot,” Shahin stated of the advertising and marketing initiative, explaining that it yields between 700 and 800 leads every month.
“We now have a staff of 5 enterprise growth folks which might be simply actually on the telephones all day lengthy, setting appointments … we had 38 alternatives this week to transform to purchasers.”
Lately, Shahin has begun exploring a minority funding, “to take just a few chips off the desk.”
“Proper now, it’s at some extent the place I’m personally making much less cash at $600 million than I used to be at $100 million,” he stated. “My persona is simply develop, develop, develop, reinvest, reinvest, reinvest. So, it might be good to not must assume a lot in regards to the cash and do what my mindset is nice at, which is development.”
He’s not ready to contemplate any majority investments at this level, nevertheless. “Lots of people simply need majority, which isn’t what I’m keen on,” he stated.
Shahin has been in conversations with just a few non-public fairness traders however has considerations about changing into oversaturated with capital meant for continued M&A transactions. One agency he’s in preliminary discussions with advised him he’s already working as a $2 billion AUM agency and steered positioning Falcon as an acquisitive platform.
Whereas he’s keen on exploring extra M&A alternatives, Shahin stated: “We’re not an aggregator. Our aim isn’t just to make a fast revenue.”
“A agency that will be match can be client-first and have an actual ardour for planning,” he stated. “And we’re a fee-only store, so they’d must be CFPs.”
Shahin, who was headed to Arizona to open a brand new workplace on Thursday, stated he absolutely expects to be at $2 billion in belongings inside the subsequent 4 years, primarily via continued natural development, however his imaginative and prescient will get “just a little fuzzy” after that.
“From there, it is simply this huge reassessment as a result of it is a a lot completely different operation once you get to that stage,” he stated. “So, from there we simply type of determine what we need to do subsequent. I’ve been advised it can turn into clearer.”