During
The Birmingham, Alabama-based business had grown as quickly as she could hope. Since its start in 2008, it had come to sit on more than $2 billion in assets under management.
The trouble for Zell, who's also the firm's CEO, was that she couldn't figure out the next step.
"You know, $2 billion under management used to be big," Zell said in an interview on Friday. "But today, I think our competition, and what we see coming into the Southeast, is going to be firms with $5 billion, $10 billion, $20 billion. Even some of the mega RIA firms are looking to come into the South. So I'm trying to play offense, not defense."
The answer she was looking for came in the form of a
It all sounded strikingly familiar.
"He was sharing how far along they had come and, lo and behold, we had made many of the same strides he had," Zell said. "I was thinking, he's about five years ahead of me and, you know, I want to build out exactly what Brent has built out. And I said, 'I want to meet this guy.'"
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A partnership of like minds
Zell said she can now point to the interview as the crucial moment leading to Savant's plans to acquire Bridgeworth later this year. But of course her decision to join Savant wasn't made solely in response to a podcast.
There were many subsequent discussions, as well as in-person meetings in Chicago. What quickly became evident was that the two firms shared the same basic approach to wealth management. Both are fee-only or mostly fee-only firms. (Bridgeworth retains the vestiges of a brokerage business.) And both insist that advisors maintain the high industry standards by becoming certified financial planners — the gold standard certification for advisors — or attaining other professional distinctions.
"I remember thinking, he sounds just like me," Zell said. "And that's weird. Because he's in Chicago, and I'm in Alabama."
Zell acknowledged the coming marriage of Savant and Bridgeworth is as much about what differentiates the two firms as what they have in common. She said she was particularly attracted by the strong investments Brodeski has helped make into Savant's technology.
Joining forces, an industry trend
Savant's purchase of Bridgeworth was brokered in part with the help of the wealth management M&A consulting firm DeVoe & Company. David DeVoe, DeVoe & Company founder and CEO, said in an interview Friday that he thinks the Bridgeworth deal is part of a trend of independent RIAs seeing benefits to joining "meta-consolidators" like Savant.
DeVoe said small advisory firms often lack the IT staff needed to provide customers with the technological systems and interfaces now expected in almost every facet of the financial services industry. That's where large firms, with their ability to have employees specialize in certain functions, enjoy a real advantage, he said.
"Many advisors need to consider whether they want to continue to do it on their own or if they want to join a larger organization to unlock more power and seek the benefits of scale," DeVoe said.
Zell said she also felt drawn to Savant after seeing that it had incorporated services like
"There was nothing wrong with us," she said. "We were not in a position where we had to sell. I told the team when I announced this that we were strong financially and operationally as we've ever been."
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Growth via M&A
Savant, for its part, can now add another feather to its mergers and acquisition cap. Its purchase of Bridgeworth will mark the eighth deal it has pulled off this year, bringing its assets under management to $24 billion. Three of the acquisitions — including Bridgeworth with $2.2 billion in clients assets — had $1.5 billion or more under management.
Savant announced in May that it had acquired
Altogether, Brodeski said in an interview Friday, Savant's 2023 deals will bring its advisor headcount to around 200 by the end of the year. And the addition of Bridgeworth's locations in Birmingham and Huntsville will mean Savant will be operating 37 offices in 14 states.
Brodeski said the previous acquisition of Capital Directions in Atlanta earlier this year had him and his colleagues looking for other opportunities in the South.
"So this was a really good complement to where we're at and where we're heading," he said.
Brodeski said mergers and acquisitions will continue to play a large role in the growth of Savant.
"There will be more we'll manage this year as well on the M&A front," he said. "But we're really curating, because we want to make sure they're a really good fit because, you know, we're playing a long game. We're not looking at the next few years."
Women in leadership
Bridgeworth Wealth Management was founded in 2008 by Zell, who had previously worked for the Lincoln Financial Advisors affiliate First Financial Group of the South. Savant, for its part, is mostly owned by Brodeski and other employees and has backing from a pair of private equity firms: Kelso & Co. and the Cynosure Group.
Zell and eight of her colleagues who now own Bridgeworth become part owners of Savant, as will five financial planners now working at Bridgeworth. Zell will have a seat on Savant's board.
Zell said that ownership structure was another part of Savant's appeal. She also noted that both firms custody client assets with Charles Schwab, a fact that should make it easier to move them over.
She said the majority of her firm's assets are held in custody at the independent broker-dealer LPL Financial. But she doesn't foresee any great difficulty in moving those over as well.
One benefit of the deal for Savant, she said, is the large presence of women within her firm. They make up 67% of her firm's management team and 35% of its advisors.
"People often ask me, 'How do you attract women advisors?'" Zell said. "What I tell them is that what you've got to have is females in leadership roles. Women have got to see other women in leadership roles for them to be able to see their trajectory into the profession."
