Serial acquirer Wealth Enhancement Group announced its 13th deal of the year, adding QCI Asset Management, a 46-year-old independent registered investment advisory in Pittsford, N.Y. with $5.2 billion in client assets. The deal, expected to close Oct. 31, brings WEG’s total client assets to $52.4 billion.
The acquisition of QCI represents the largest in WEG’s history and its first location in the Western New York region.
The news follows WEG’s acquisition last week of Walnut Creek, Calif.-based Walnut Creek Wealth Management, a hybrid RIA with nearly $1 billion in client assets.
QCI specializes in financial planning, wealth management, investment management and retirement consulting services for high-net-worth individuals, as well as trusts and institutions. The firm was founded in 1975, and is led by President and CEO H. Edward Shill and Principal and Portfolio Manager Gerald Furciniti. The firm’s 31 employees will join WEG, doing business as the QCI Team of Wealth Enhancement Group. Berkshire Global Advisors advised QCI on the transaction.
QCI joins the rush of top-producing RIAs selling their firms to bigger enterprises such as WEG. Since the start of the year, WEG has acquired 13 firms, expanding its brand presence outside of its Minnesota roots into the Mid-Atlantic, Pacific and Northeast.
WEG CEO Jeff Dekko said the firm’s strategy is to become a national provider of wealth management and financial planning services, and it’s using M&A as a way to do so.
“As we’re coming into a new geographic area, and we’re doing it in partnership with a firm like this,” Dekko said. “In five years, I want to be approaching a couple hundred billion in assets and really be a national player, to really have representation throughout the entire country.”
In August, WEG announced a new investment from private equity firm Onex Corp., which joined TA Associates as equal capital partners in the independent wealth management company.
TA Associates invested in WEG in 2019, purchasing the then-$11.8 billion AUM firm from Lightyear Capital, which had bought a majority equity stake in the company in 2015.
“As we continue to grow in value and as an organization, it really made sense for us to bring in a second institutional owner into our organization,” Dekko said. “I like having multiple PE partners, because it basically creates a longer runway by which we can tap into the private equity space.”
Having multiple institutional owners can also help his firm be better positioned for what he calls “Chapter 2” M&A, which, Dekko stressed, is not something WEG is doing today.
“What I mean by ‘Chapter 2’ is you start to see the consolidators consolidate each other,” he said. “You don’t just bring in somebody else and start doing this the next day. You bring in multiple institutional partners, you start to have the stronger financial wherewithal, and then—when the time is right—you’re positioned such that you’re lined up across your organization.
“I think that’s years off, but we want to make sure we’re doing the right moves today to set ourselves up for that.”