United Capital Financial Advisers LLC has grabbed a top LPL Financial RIA that has achieved a phenomenal rate of growth through an aggressive rollover strategy.

Based in Newport Beach, Calif., aggregator United Capital will assimilate Peak Capital Investment Services, an advisory firm with $600 million in assets under advisement and about $6 million of gross revenues. It has offices in Denver and Dallas and brings approximately 40 employees to United Capital.

David Peterson, 51, president of Peak, says that he went for the deal because of his firm’s runaway growth – having seen assets leap from about $40 to $50 million in 2002 to its current size.

Growing pains

“That growth was great but it caused serious problems,” he says, with most of the issues centering around business details and staffing.

“We were running a business rather than meeting clients,” Peterson adds. “The nice thing is that United Capital takes on the HR, benefits, compliance, bookkeeping and accounting.”

Joe Duran, United Capital’s CEO, says that the addition of Peak goes way beyond the $600 million of assets.

David Peterson: That growth was great
but it caused serious problems.

“This partnership and the addition of the call center is a needle-moving event for us,” he says in a release.

Financial plan on spec

What makes Peak a particularly strategic acquisition is its growth formula. The company has a call-center team that reaches out to employees at large companies and invites them to seminars that run from eight to 250 attendees. When plan 401(k) plan participants express interest in Peak’s services, the firm will create a financial plan for them and do a partial rollover to an RIA.

The plan going forward is to use United Capital’s offices across the United States to fulfill the services demanded by these 401(k) plan participants.

“We are confident that by working with United Capital’s talented management team and the driven advisers within offices around the country, we can realize explosive growth nationally by leveraging what we have built here in our call center,” says Peterson in a release.

Picking off big RIAs within IBDs

Currently, Peak services employees in Colorado, Texas and New Jersey. With this acquisition, it plans to do so nationally. United Capital has 34 offices located around the United States and had $16 billion in assets under advisement, as of June 30.

Duran says that the Peak deal underscores his company’s success in picking off the big RIA within IBDs. By the end of 2011, Duran expects that his company will have won four such teams and that it will have 20 teams from IBDs overall.

“They’re basically an RIA inside a broker-dealer platform, which is not a good idea because the internal costs are too high; they don’t get high-end performance reporting and can’t charge for advice,” he said in an interview at Schwab’s IMPACT conference.

LPL did not respond to an e-mail and a phone call as of publication of this article.

Peterson says he almost always provided free financial plans during his time with LPL but occasionally charged for them. He plans to do much more planning-for-a-fee using United Capital’s Honest Conversations framework. See: Joe Duran tries out novel financial planning strategy on himself and his wife.

The broker-dealers that United Capital has won reps from include Commonwealth Financial Network, Royal Alliance and Wells Fargo’s FiNet – and those are the ones that he will continue to focus on.

Focus on LPL

The Peak deal was the first one involving an LPL rep for United Capital and Duran doesn’t expect that it’ll be the last.

“When you take a high-visibility team, it opens the door to people with $3 to $4 million [of production],” he said in the interview.

The time it took to get Peak on board – five months – was a longer time frame than usual, Duran allows.

Peterson says that Duran’s presence was certainly a factor in coming aboard.

“He’s slightly charismatic,” says Peterson

Final Note: One factor that did not apply to Peterson’s departure: Succession. “My two partners are 15 years younger than me so we had that in place. And I’m not going anywhere soon.” Brandon Ross and Jonathan Blumenthal, senior vice presidents; and Tim Harder, CIO of Peak, will join United Capital, too.