In a deal taking advantage of its new custodial relationship with Raymond James, RIA aggregator Mercer Global Advisors acquired a high-net-worth practice.
A. Farah Investments’ AFI Wealth Strategies (AFI), a Wisconsin-based wealth management firm with about $240 million assets under management, sold to private equity-backed Mercer, the parties said on June 23. While the firms have announced the close of the transaction, it isn’t immediately clear whether founder Andrew Farah plans to drop his broker-dealer of the past 26 years, Raymond James Financial Services. The practice didn’t respond to requests for comment about how its affiliations will change under the deal.
In an email, Mercer Vice Chairman Dave Barton said that AFI custodies at Raymond James and that it is in process of migrating from the independent contractor division at Raymond James, a hybrid broker dealer and RIA platform, to the RIA and Custody Services division, “which is a pure RIA platform.”
“AFI will join Mercer on the RCS platform and AFI’s client accounts and custodial relationships with [Raymond James] remain undisturbed as part of Mercer’s omnibus arrangement,” Barton says.
Mercer has dropped E-Trade Advisor Network from its list of custodians available to advisors and added the Raymond James Investment Advisors Division, according to its most recent SEC Form ADV brochure. E-Trade did not respond to media requests.
In the statement, Barton says Farah was “maxed out from a capacity standpoint.”
“[H]e was faced with the proposition of growing and investing in his business, or alternatively, join[ing] one that had already built a fully institutionalized successful business his clients would appreciate,” Barton says. “Together we hand-crafted Andy’s ongoing role as a member of the Mercer Advisors team where he continues to lead the Green Bay office and service his clients but with an army of support standing shoulder-to-shoulder with him to foster growth.”
Colorado-based Mercer Global Advisors has over $31 billion in client assets over more than 45 locations across the country, according to the statement.
David DeVoe, founder and CEO of DeVoe and Company, an RIA merger and acquisition consultant, says he anticipates Mercer’s merger and acquisition activity “will remain strong and likely accelerate through the rest of the year.”
“Mercer Advisors has executed 10 transactions this year,” he says. “This puts them well ahead of the seven transactions they recorded in 2020. Their momentum relates to advisors understanding the benefits of their expansive resources and strong client experience footprint, as well as seeing a culture they want to be part of. The acquisition of AFI fits the mold.”
Mercer has a custody relationship with Raymond James RIA Services and Custody Services that has a fee schedule based on the services provided and the products that are utilized.
The other custodians Mercer uses are Charles Schwab and Company, TD Ameritrade, National Advisors Trust and Fidelity Clearing and Custody Solutions.
AFI was founded by Farah and serves about 220 clients and offers “boutique wealth strategy services, managing and planning the financial futures of many high-net-worth individuals, families, and their businesses,” according to the statement.
“Partnering with Mercer Advisors had appeal for me because they take over the onerous back-office and human resources responsibilities and offer in-house family office services like estate planning, tax, etc. that my clients can utilize. For me it was a win, and for my clients it was a win, a true ‘win-win’,” Farah says in the statement.
Farah has used Raymond James Financial Services as his broker-dealer since 1995 and Raymond James Financial Services Advisors since 2009, according to Brokercheck. Overall, he has 31 years of industry experience.
“I built a successful and growing practice but had reached the limits of my capacity. To continue to add clients and grow, I had to reinvent my business. To use industry language, I had to build it or join it. Talking to a colleague who had recently faced a similar fork in the road, he mentioned he joined Mercer Advisors,” Farah says in the statement.
Farah is also on the board of directors for the Green Bay Packers.