By Kenneth Corbin / March 18, 2022 / Barron’s
Private Advisor Group, a large and growing registered investment advisor based in Morristown, N.J., has bought Investors Financial Group, a Minnesota-based RIA with nearly $2 billion in assets under management.
Through the deal, IFG can retain its brand, but will gain access to additional resources to develop the business and plan for a transition in leadership at the firm.
“At IFG, we help investors prepare and plan their legacy, and aligning with Private Advisor Group is the next right step for our firm’s legacy.” Timothy Gaarder, IFG’s president and managing principal, said in a statement.
PAG said that IFG’s 29 advisors, a group which includes the firm’s three principals, and a support staff of seven will be joining the firm. “We have full retention,” a PAG spokeswoman said. “Many are through onboarding already, while some are waiting for licensing to clear.”
IFG’s principals indicated that the decision to link up with PAG was motivated in part by concerns over the firm’s succession plan.
“Transitioning the management of our RIA creates immediate efficiencies,” said Gaarder, a 36-year-veteran of the industry. “And when you combine that with strong cultural alignment and a foundation for growth, we have strengthened our position to serve our advisors, our investors and our community, now and well into the future.”
Both firms are affiliated with the broker-dealer LPL, which served as a consultant on the deal.
PAG, which manages more than $30 billion in client assets, hasn’t been among the most aggressive of RIA acquirers—a company spokeswoman notes that most of PAG’s recent growth has been organic. In addition to IFG, PAG has acquired two other firms since 2019.
Frank Smith, PAG’s head of advisor growth, described a series of “filter criteria” that PAG uses when evaluating a firm for a potential acquisition, beginning with the culture.
“If it’s not a good people and mindset fit, we’ll be starting from a deficit,” Smith said in an email.
The company also looks closely at the specific opportunity a potential acquisition presents. That could arise from acquiring a firm that serves a specific segment of clients, or, as with IFG, a firm that has a presence in a desirable geographic locale.
“Minnesota is a market where we already have a strong presence,” Smith said, “and with the acquisition, we now have more great advisors affiliated with us in that market and the added benefit of physical office space.”