Seattle-based registered investment advisor Coldstream Wealth Management has joined the ranks of advisory firms bringing tax services in house, teaming up with a pair of local firms to do so.
Coldstream, a dually registered firm with $6.9 billion in assets, is merging with Seidman Capital Group, a wealth management firm, and Hersman Serles Almond, which provides accounting and consulting services. The two Kirkland, Wash.-based affiliated businesses were founded by Hersman Managing Partner Victoria Serles.
She launched the accounting business in 1980 and today leads a team of 14—including Clifford Hersman and three other tax partners, alongside CEO Shane Payette and CFO Brittany Gabelein, both of whom are also partners in the firm.
Seidman was established in 2004 after a reputation for offering tax-smart estate planning and trust services led global accounting giant BDO to approach Serles about creating a subsidiary private wealth business, which was named for the firm’s founding family.
Serles, Payette and Gabelein bought out BDO in 2010, keeping the Seidman name for brand recognition and continuity. All three principals serve as advisors along with Senior Associate Kevin Kepler, overseeing some $250 million in client assets with the help of three support staff members.
After the deal closed Friday, Coldstream now has seven office locations and about 160 employees throughout the Pacific Northwest and in Alaska. Hersman Serles Almond is retaining its brand and will continue to operate independently. Seidman Capital will be rolled up into Coldstream.
“The name Coldstream has more meaning and recognition and identity on the West Coast and especially here in the Pacific Northwest,” Serles told WealthManagement.com.
Serles said Coldstream Managing Shareholder Kevin Fitzwilson initially approached her at the beginning of 2023 about striking “some sort of arrangement” to provide tax-related services for the firm’s clients, many of whom had already been with Hersman for decades.
“We’d kind of already been on this long date, and this just made a lot of sense,” she said. “I really think this is where our industries are headed; the natural melding of accounting and wealth management is something I’ve done a lot of talking about since the late ‘90s.
“The merger of our two collective groups will help really show both industries that we can blend together, and work together and actually become way more powerful in terms of how we benefit our clients,” she said.
Established in 1996, Coldstream was partially owned by Boston Private for about a decade before management made the decision to buy out the bank in 2011—less than a year after Seidman left BDO. Fitzwilson said their corresponding histories give the combined firm a shared vision for the future.
“Building an entrepreneurial firm, merging into a large national platform and seeing the pros and cons of that, and then making the proactive choice to come back to your roots and own and operate a 100% employee firm is really similar to the path we’ve been on,” he said. “We both have the perspective of seeing these scaled up firms with all their bells and whistles, and we think we can continue to thrive and compete and serve our clients optimally and have an exceptional team member experience in this sort of construct.”
Sixty percent of the firm’s employees are equity owners, and Fitzwilson said the goal is to continue to increase that number to flatten Coldstream’s cap table as much as possible so that the exit of a single investor won’t end up forcing the need for external capital.
Serles and Fitzwilson expect integration will take years as they work together to realize efficiencies, share best practices and cross-train employees.
“It’s going to be a multi-year process where we’re going to learn from each other, find best practices wherever they are, and then we’ll implement them firmwide,” said Fitzwilson.
One part of the plan is to have Coldstream advisors learn more about tax and accounting while the accounting side of the house becomes more fluent on the investment and financial planning side, according to Serles, “so they can identify an opportunity or need for the client and walk that client down the hall to the next office and get them some immediate help.”
Another early focus will be on adding tax talent to handle the expected influx of business from Coldstream’s 2,800-plus client roster, about a tenth of which are institutional investors. The firm will also be looking at expanding trust and estate services in response to widespread demand from clients on both sides of the combined business.
This latest deal builds on Coldstream’s northwest expansion as the firm looks to build partnerships throughout the West, but it’s also in talks with advisors as far east as Boston. The firm has a goal of growing top line revenue by 20% annually, half through mergers and acquisitions and half organically. Earlier this year, Coldstream brought in Matt Sonnen as chief operating officer to help with the identification, onboarding and integration of new firms.
“We have a growth mindset and the discipline,” Fitzwilson said. “But what we’re really focused on is finding people that we want to be with on this journey and who will enhance our teammate and client experience.”