Firm is out to smooth transitions for CPA's wealth-management subsidiaries. iPro One has taken a minority stake in HbK Sorce Financial, the wealth-management subsidiary of Alliance, Ohio-based CPA Hill, Barth & King. The move marks iPro One's transition from a business-service model to a full-blown acquisition strategy.

Details of the transaction between iPro One and HbK Sorce weren't disclosed.

"Wealth-management services are growing faster among CPA firms than in the general [wealth-management] sector," says Anthony Wood, CEO and founder of iPro One. "Of the 100 top CPA firms, I'd say 99% of them have wealth-management practices and our 25 key targets among them have about $28 billion in assets under management."

Transitions

Three-year-old iPro One started providing third-party investment products and related consulting services exclusively to CPA-affiliated wealth-management firms. But it saw an opportunity to help some of them out further -- particularly in terms of transition management and continuity -- by becoming equity-owning partners with them.

Like other baby boomers, many of today's firm founders and senior staffers at CPAs are expected to retire over the decade or two. And if they want to make the most of their hard work they need "to provide transition and funding to the next group of firm partners," iPro One says in a press release. "The resulting challenge is [one of] balancing aging partners and the need for future leadership, vision and revenue continuation." As things stand, more than 81% of CPAs lack a documented succession plan, according to recent data compiled by the American Institute of Certified Public Accountants.

New York-based iPro One got the capital it needed to start acquiring CPA-based wealth-management practices late last summer when Houston-based investment bank Sanders Morris Harris (SMH) became a 25% owner of the firm.

iPro One's acquisition strategy "revolutionizes the way in which CPA wealth management practices function, helps CPA firms rise above the competition, provides solutions for succession planning and delivers more value to the firm's high net-worth clients," says Wood. "We follow a 'buy-and-build' strategy with culturally aligned firms to help them nurture their practices."

Minority owner

Wood emphasizes that iPro One is "not in the business of absorbing wealth-management practices." Rather, it's out to help CPAs "rise above the competition, [provide] solutions for succession planning and [deliver] more value to the firm's high net-worth clients" by providing liquidity and then continuing in its role as a wealth-management platform provider and practice-management consultancy.

The CPA-based practices iPro One buys into will retain their legacy branding and parent-firm affiliations and iPro doesn't plan to take majority stakes in its partner firms.

Hill, Barth & King's CEO Christopher Allegretti says its deal with iPro One gives its Erie, Pa.-based wealth-management subsidiary the benefit of "iPro One's expert investment knowledge, direct access to sophisticated services, unique ability to unlock the potential within our existing clients and liquidity solutions for our partners."

Wood says that iPro One will maintain its consulting relationships with existing clients but, from here on in, all new business will involve buy ins.

iPro One plans to make about five acquisitions a year through the next five years.

Erie, Pa.-based HbK Sorce Financial has about $1 billion in assets under management. -FWR

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