Stratos' acquisition vehicle has taken a minority stake in a San Diego firm, Brown Wealth Mgt.
Updated: Dec 3, 2021
Stratos Wealth Holdings has purchased a minority stake in one of its own RIAs for the first time.
The $13.9bn firm has bought into $650m Brown Wealth Management through Stratos Wealth Enterprises, the holding company’s RIA acquisition vehicle. Brown Wealth Management is part of Stratos Wealth Partners, the firm’s LPL affiliated hybrid RIA.
Specific financial terms of the transaction were not disclosed.
Stratos Wealth Enterprises has a history of buying minority stakes in RIAs, but buying into a firm affiliated with a sister company is an unprecedented step, explained Jeff Concepcion (pictured), chief executive of the Stratos family of companies.
‘We’ve never done it inside of our own family,’ Concepcion said. ‘That’s what was unique and that conversation is not taking place in a vacuum. We’re having that conversation with others of our larger, better shops. It wouldn’t be The $13.9bn firm's RIA acquisition vehicle has taken a minority stake in a San Diego firm that is already part of Stratos Wealth Partners. appropriate to invest in all the businesses, but in that particular case, it was a really, really good fit and it made great sense.’
Based in San Diego, Brown Wealth Management employs five advisors and four operations staffers. The firm joined Stratos from Wells Fargo in 2015. ‘We have spent the last two years evaluating all options for the most efficient way for BWM to scale, grow and increase the services to our clients. In the end, deepening the partnership we already had with Stratos became the best fit from all angles,’ said Jeff Brown, the president of Brown Wealth Management.
‘We not only gained resources on the executive leadership and M&A front, but also increased the depth of the bench on the investment management side, while securing the succession and continuity of the firm for the future.’
Stratos Wealth Holdings recently sold a minority stake in itself to Emigrant Partners, an RIA investing arm of New York Private Bank & Trust (NYPB&T). Concepcion sees a parallel between the two deals.
‘Emigrant is betting on a team that’s been successful. They’re betting on a process that’s worked. They’re betting on a group that’s motivated and hungry to grow and execute and do well and with Jeff Brown and Brown Wealth Management, we’re doing the exact same thing,’ Concepcion said. ‘I think it’s a great analogy.’