The Mather Group and AlphaCore each absorb a $400 million advisory firm

Legacy Consulting Group's $400 million comes to about 2.4% of The Mather Group's (TMG) $17 billion ^[18]. Count the similarly sized Chicago firm it added in May, and TMG's two purchases come to a little under 5% of its base ^[24]. Doubling at Legacy's size would take about 42 more deals ^[19]. The money behind that pace comes from Vistria Group, the Chicago private equity firm that owns a majority of TMG ^[6]. Shake, one of Legacy's owners, described the firm's work in planning terms. "For us, financial planning has always started with understanding what matters most to a client and what they want their wealth to make possible," Shake said ^[3].

AlphaCore's purchase is larger against its own size, about 4% of roughly $10 billion ^[20]. Blue Rock manages its $400 million with nine people ^[9], or about $44 million in assets per person ^[21]. Todd Roselle, who founded it more than a decade ago, joins AlphaCore as managing director and partner ^[7]. "For more than 10 years, I turned down every conversation about merging, because none of those firms felt like Blue Rock," Roselle said. "What made AlphaCore different was the alignment of values." ^[8]

The minority money in the report goes to bigger firms. According to the report, Constellation Wealth Capital is dedicated to investing in scaled, independent RIAs, and its new check went to BakerAvenue ^[11]. BakerAvenue's $6.3 billion is nearly 16 times Legacy or Blue Rock ^[22]. The three small-firm deals in the report move about $989 million between them, less than a sixth of BakerAvenue alone ^[25]. A firm the report calls Constellation Wealth already holds a minority stake in AlphaCore, where founder Dick Pfister is the majority owner ^[10].

Scott Hardy's $189 million is about 6% of Summit Wealth Group's $3 billion ^[23]. He described the move in terms of resources. "What attracted me to Summit was the opportunity to preserve the way I work with clients while adding significantly more resources behind that relationship," Hardy said ^[15].

The deals fit more than one reading. In one, small-firm owners hold the leverage: buyers adding 2% to 6% at a time ^[18][20][23] need many sellers, and Roselle could refuse every approach for a decade ^[8]. In the other, buyers hold it. Outside capital reaches a $400 million owner mainly through a sale to a platform that already has some ^[10][11].

I think the second fits the evidence better. Both $400 million sellers went to firms with outside owners ^[6][10], and the one new minority investment in the report went to a $6.3 billion firm ^[11]. The report does not include prices or terms for any of the four deals ^[16]. If terms surface showing $400 million sellers ^[1][4] paid multiples close to what scaled firms get from minority investors, the small owners hold the leverage and this view is wrong.