Merit Financial buys $1.1B Buffalo-area RIA, its 10th ex-Commonwealth practice

Merit Financial Advisors has bought Moldenhauer & Associates, a 12-employee practice in Orchard Park, N.Y., with about $1.1 billion in client assets across nearly 1,900 households. The deal closed Sept. 25 and was announced Oct. 7. It is Merit's 12th acquisition this year and the 10th time the Atlanta RIA has bought a firm that had previously been affiliated with Commonwealth Financial Network, according to Financial Advisor magazine's report. The purchase takes the $33 billion-asset firm into the Buffalo market.

Brett Moldenhauer, who leads the practice his father founded, cited the Commonwealth advisors already at Merit as a reason he sold. "What caught my attention was the caliber of people who were choosing Merit," he said in the release. "These were successful advisors and industry professionals I knew and respected who were still very focused on growing their businesses and building for the future."

LPL's acquisition of Commonwealth carries a projected 90% advisor retention rate, per this publication's reporting, and former Commonwealth practices dominated the disclosed AUM flow in a recent week.

The practice held less than $150 million in assets when it affiliated with Commonwealth in 2016 and more than $1 billion now. Merit attributes the growth to client referrals and long-term relationships rather than acquisitions. It is on pace to add about $100 million in new assets this year, roughly 9% organic growth against the $1.1 billion base. Across nearly 1,900 households, that works out to about $579,000 of client assets per household, and the 12 employees will stay in the Orchard Park office.

No purchase price appears in the report, so no multiple can be derived. The seller said he sold for support in marketing, human resources, technology and operations, and he chose Merit partly because of the Commonwealth advisors already there.