Wealth Enhancement Group, one of last year’s most active RIA acquirers, announced on Monday that it had surpassed more than $81 billion in client assets.
The Plymouth, Minnesota–based firm also announced three leadership appointments.
Jim Cahn, previously WEG’s chief investments and business development officer, is now chair of the investment committee and chief strategy officer.
Michael Fredericks joins WEG as its new chief investment officer. According to the firm, his primary focuses will be on “driving the investment process for portfolios managed by Wealth Enhancement Advisory Services (WEAS), leading functional investment areas, and monitoring the investment landscape to ensure that financial advisors have both competitive solutions as well as the highest quality investment choices available to offer clients.” (WEAS is WEG’s registered investment advisor.)
Prior to joining WEG, Fredericks served as a managing director and head of income investing at BlackRock, helping grow its Multi-Asset Strategies and Solutions Group to a $32 billion platform. Fredericks will report directly to Cahn.
WEG also announced that Dan Stampf will become the firm’s first chief product officer. In this new role, Stampf is responsible for WEG’s “comprehensive offerings including advanced financial and estate planning, tax strategies and preparation, employer retirement and benefits, individual insurance, and trust services.” Stampf previously worked at Empower, Personal Capital, and Fisher Investments.
“Reaching these significant milestones underscores our commitment to providing best-in-class financial advice and expanding our reach to serve more individuals,” WEG chief executive officer Jeff Dekko said in a statement. “Our growth trajectory continues this year, and we are eager to progress forward as a leading RIA platform.”
Over the last decade, the RIA industry has become increasingly consolidated. In 2011, there were only 10 RIAs with at least $10 billion in AUM, according to the 2023 report by Advisor Growth Strategies. In 2023, that number had ballooned to 258 firms, which represented 1.5 percent of all RIAs while managing 47.4 percent of all assets.
WEG has been at the forefront of industry consolidation in recent years. The company completed 18 acquisitions in 2023 and has signed 5 transactions year-to-date. By comparison, the firm closed 13 deals in 2022 and 19 deals in 2021.
The firm has 115 offices in 26 states, including 17 in California, 15 in Minnesota, 11 in New York, and 10 in Florida.
Consolidators like WEG accounted for 47 percent of all RIA acquisitions last year, according to DeVoe & Company, a consulting firm that specializes in M&A and wealth management companies. These firms have a business model focused on scale and rely heavily on M&A activity to drive growth and expansion.
“Our strategic focus on fostering both inorganic and organic growth continues to attract RIAs who seek to accelerate their growth by leveraging Wealth Enhancement’s growth platform,” Cahn said in a statement. “Firms that join us find they can offload certain central administrative functions and devote more time to servicing existing clients and expanding their practice.”
According to the firm, organic growth for WEG also reached record levels in 2023, when “total new money from new and existing clients was up 22% from 2022.”
2022 was a particularly bad year for industry organic growth. According to Fidelity’s 2023 RIA benchmarking study, organic asset growth for wealth management firms fell below 4 percent in 2022, after a high of 8.2 percent in 2021. Organic asset growth was between 5 and 6 percent in 2019 and 2020.
