A deal-hungry firm from Raleigh with an appetite for wealth management companies has its first Richmond acquisition in the bag and is already eyeing additional local targets.
VisionQuest Wealth Management last week purchased Southside-based Deckert Financial Management for an undisclosed sum.
The deal adds Deckert Financial’s $70 million in client assets to bring VisionQuest’s pool up to about $300 million under management. And Steve Peters, VisionQuest’s founder and CEO, said the deal making is just beginning.
The company has identified Richmond, Charlotte and Orlando as the markets it will tackle in its initial wave of growth to become a “regional powerhouse when it comes to buying advisory firms in the Southeast,” Peters said.
Through the firm’s VisionQuest Capital arm, Peters has already closed deals to purchase two wealth management firms in Charlotte in the last six months and is aiming to close its first in Orlando by the fourth quarter.
It has three other Richmond firms on its radar for the next 12 to 18 months.
The company has a particular affinity for smaller, independent wealth management firms with experienced owners that are thinking about an exit strategy.
In Deckert Financial, VisionQuest takes on a nearly 30-year-old firm run by industry veteran Kevin Deckert.
Deckert, a VCU graduate who founded his firm in 1986, said he handles client needs including building wealth, managing debt, managing risk and estate planning.
Peters and VisionQuest weren’t the first potential buyers to come knocking on Deckert’s door.
“I talked to a good number of firms in recent years,” Deckert said. “VisionQuest stood out so remarkably that I really became, I think, quite excited about the idea of being able to merge our clients into a firm of this caliber and capability.”
As he considered selling, Deckert thought of his longtime clients.
“My number one priority was what I would call the wellbeing of our clients,” he said, adding that his average client tenure is 17 years. “I know their families, their goals, wants and needs and want to be certain that those would be taken care of in a sense of continuity.”
That kind of client tenure and personal touch is where Peters said he sees his opening.
His growth plan will play out in an industry in which many older independent advisers are thinking about getting out. Peters said the average age of independent wealth advisers is 66.
“I think this is going to be an epidemic in the industry as a whole,” said Peters, 44.
And he sees potential in bringing on experienced owners and their loyal clientele.
“Their clients choose them because they’re a boutique firm, you can pick up the phone and the owners are accessible,” Peters said. “What happens to their clients over the next decade? You have to say at some point, ‘How do you develop a succession plan?’”
Deckert, 64, agrees that there’s a chunk of the industry that is at a generational shifting point.
“You can say I’m from the boomer generation,” he said. “In that context, you have a layer of advisers that are about my age that started or built firms many years back.
“And so then what? It’s the same riddle I faced, and how do I provide care and continuity for our clients.”
The deal with Deckert began when the two sides were introduced in December. Peters said his firm courted Deckert, which is based out of 812 Moorefield Park Drive, just off Midlothian Turnpike, for several months. The deal was ultimately completed on May 5.
VisionQuest looks to do cash deals where the owners are bought out and must continue on in the practice for a set amount of time.
“It’s not like you can sell me your business and retire the next day,” Peters said.
Deckert, who has signed on to stay at least another five years, said he has no immediate plans to give up his practice.
“I really love what I do and intend to keep doing it as long as I can,” he said.
As for the bigger picture of Peters’ plan for VisionQuest, he said he likes Richmond as a target because of the wealth of corporate executives and entrepreneurs, as well as its location as a base from which to hit other nearby markets.
“Richmond is a great spot because you’re not that far away from the D.C. market and from our headquarters,” he said.
His aim is to buy up about $1 billion worth of client assets in the next three years. That would put VisionQuest at about $13 million to $15 million in annual revenue. It currently produces about $3.5 million in revenue, Peters said.
“I don’t want to grow too fast,” he said. “My end game is not an IPO. It’s to grow a substantial business in the Southeast.”
Peters, who previously worked with SEI Investments near Philadelphia, wouldn’t say specifically how large a war chest the company has at its disposal, but said he is funding it personally.
We’re sitting pretty cash-heavy,” he said.