Mercer Buys $300-Mln Asset RIA in Connecticut, Sues Fleeing Advisor

Mercer Advisors, a Denver, Colo.-based registered investment advisor rollup firm with over $16.5 billion in client assets, said Wednesday that it acquired Regent Wealth Management, Inc., its fifth purchase this year.

The acquisition is Mercer’s 11th in the northeastern U.S., and comes as Genstar Capital, the private equity firm that bought a majority interest in Mercer in March 2015 from Lovell Minnick Partners, is in talks to sell its stake for more than $600 million, according to published reports.  

Private equity firms ABRY Partners, General Atlantic and GTRC are among the bidders, according to Buyouts Insider. 

David Barton, vice chairman of Mercer and its former CEO, declined to discuss the reports.  

Mercer’s appetite for growth, however, continues unabated. 

Regent, a fee-only firm in Woodbridge, Conn. with about $300 million from 110 households, brings Mercer’s office count to 43. 

“By the end of the year, we will have completed a minimum of 16 transactions, which will double the output we had in 2018,” said Barton. Five of the deals, he said, are under contract.

Mercer has not attracted breakaway brokers from wirehouses or regional firms, but has picked up at least one trait from traditional firms—suing advisors who leave for competitors. 

Last week, the rollup asked a New York State Supreme Court judge to issue a temporary restraining order and injunctions that would prohibit former advisor Skyler Kraemer from contacting former clients.

Kraemer, who joined Mercer in 2013, left on August 2 to open a New York City office for Mission Wealth Management, a Santa Barbara, Calif.-based RIA with $1.88 billion of client assets. Mercer sued on August 8. 

Neither Kraemer nor Brad Stark, Mission Wealth’s founder, returned requests for comment.

TRO requests accusing brokers of violating their employment contracts by taking confidential contact information are typically sought by wirehouses. But in recent months, discount brokers such as Charles Schwab and Fidelity Investments have filed lawsuits against advisors who had worked in their upper-echelon units.

Mercer’s lawsuit, like those from the discount brokers, claims that it feeds its advisors customer accounts and leads, in contrast to the self-starters at traditional firms who generate their own accounts. Mercer has “discrete marketing and sales departments that are responsible for developing new business” and that generate 600 to 900 new clients annually for its advisors, according to the lawsuit.

Mercer may be trying to send a particular message to Mission. The California firm, which has 34 nonclerical employees, according to its ADV filing, last year hired a trader from Mercer and in 2011 recruited a certified financial planner who had been with Mercer for 13 years.

The lawsuit against Kraemer was reported earlier by “Investment News.”