Merit Financial Advisors, an Alpharetta, Ga.-based registered investment advisor with $20 billion in client assets, has acquired an RIA in Florida that works with firefighters and police officers with an eye on expanding that niche nationally.
Merit’s acquisition of Second Half Financial Planning will bring in a moderate amount of assets for today’s deal market at $225 million. However, according to Second Half founder Mike Fitch, the firm’s model has made it a go-to for firefighters and police officers in Florida. He believes the business could be replicated in up to 29 other states.
Mike Fitch started Second Half Financial Partners about 15 years ago after hearing that the state of Florida had implemented a deferred compensation program by which first responders could receive a lump sum payment in addition to their pension. The going was slow at first, with Fitch having trouble getting the attention of the first responder community to manage their retirement assets.
Then he was contacted by Mark Burnam, who said he could help connect Fitch to first responders working for the state and across various departments. The two crisscrossed Florida, eventually connecting with the right people.
“Mark and I must have put 800,000 miles on our car in two years,” Fitch said.
The results were a client base of about 50% law enforcement and 50% firefighters, with consistent new clients due to referrals from a community that often retires in their early 50s.
“As the saying goes, ‘telegraph, telephone, tell a fireman,’” Fitch said. “If you do right by them, they’ll tell everyone about you. If you do wrong, they’ll tell everyone too.”
Fitch said Second Half Financial Partners entertained acquisition offers from eight firms, but only took a second call from Merit. He added that he wants to bring his clients Merit’s estate planning and trust services.
Meanwhile, Fitch and his team will work with Merit to extend their services to other states with similar retirement programs and their related nuances. He said he’ll recommend to Merit that advisors who want to work in the first responder area get training and certification.
“If you don’t follow those laws correctly, you can really screw up a first responder’s taxes and even their retirement,” Fitch said.
For now, Fitch said his team is onboarding to the Merit systems. His team is one of 40 other acquisitions Merit has made in 4 1/2 years after it sold a minority stake to Wealth Partners Capital Group and a group of strategic investors led by HGGC’s Aspire Holdings platform. WPCG recently sold its stake to minority investor Constellation Wealth.
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