Modern Wealth Management, a registered investment advisory firm founded earlier this year by former United Capital and Goldman Sachs executives with $200 million in private equity funding, announced its second expansion with an Iowa-based father-son team managing about $205 million in assets.
With corporate management based in California, Modern’s first three acquisitions came mere weeks after the firm announced its launch in early April. The addition of Barber Financial Group established headquarters and two additional locations in the greater Kansas City area, where the firm has built a lead-generating “growth hub,” as well as two offices in the Detroit region.
Midwest Financial, in Glidden, Iowa, brings a team of five led by Brian Johnson and his son Jeremiah Johnson, along with some $205 million in assets across 624 individuals, five charities and two corporations, according to a recent Form ADV. The duo was introduced to Modern Wealth by Dean Barber, owner of one of the three Barber Financial businesses acquired in April.
Brian and Jeremiah are now managing directors at Modern, following the closing of the deal on August 31.
“We look forward to ushering in greater operational efficiencies at the firm, along with providing our clients an expanded menu of financial planning services. In doing so, we hope to further solidify our position as a trusted partner to our clients,” Brian Johnson said in a statement.
“With access to a broader team of financial professionals, we’re now better positioned to devise and execute wealth management strategies tailored to our clients’ needs and goals,” added Jeremiah.
Modern President Jason Gordo said the firm’s business model is predicated on establishing anchor locations in specific regions with between $200 million and $1 billion in assets that show long-term potential, and positioning them as hubs to drive organic growth.
“That’s what we saw here,” he said, noting Midwest also had a solid succession plan in place. “Brian is a great advisor and is by no means retiring, but Jeremiah’s in his mid-30s and is a super strong advisor who has led the business and team now for a few years and is someone we’re really excited about. It fits nicely into our puzzle because it’s a location where we can drive double-digit organic growth because we have that next-generation advisor in place.”
Modern is pursuing firms able to drive meaningful organic growth and happy to leave inorganic strategy and back-office administration to Modern management. The firm also wants to attract advisors focused on financial planning, who are willing to leave asset management up to the firm’s centralized investment team, led by Stephen Tuckwood.
“We want our new partners to be exclusively focused on helping us build a great business focused on delivering organic growth,” said Gordo, noting that the growth hub, established in August, is already funneling prospective clients to the new Iowa office.
“We don’t mind if they’re IBD-affiliated, and we’re finding that we’re having several conversations a week with firms in that range,” Gordo said. “If they have a next generation, that’s fantastic, but not required. We think we can do a lot of good in our business plan with firms in that $250 million to $750 million range.”
In addition to financial planning chops, Modern is looking to add advisors with tax-aware strategies.
“We have what I would consider a wealth management business with a tax offering today,” said Gordo. “By year end, I think you’ll see a more wholesome and well-rounded tax business from us. That’s really important.”
After building out an M&A team last month, Gordo said to expect more announcements on that front “in the not-too-distant-future.”
“Our pipeline of new partner firms has grown nicely since those additions and we’re really excited about what they’ve already done and what they will accomplish,” he said.