Behind the Deal: Marketing profit boosts multiple for fast-growing RIA

By the late 1990s Ernie Burns, then a nascent businessman, had won multiple national and international taekwondo tournaments. But his Olympic dreams of him were shattered when the unthinkable happened.

While driving on the interstate, Burns recalled, he was hit by an 18-wheeler, losing his right hand in the resulting accident. The event altered his perspective and focus on him.

‘“Forget about fighting, you’ve got to make a living,”’ Burns, now 55, recalled his brother telling him shortly after. ‘I just dove into the business.’

Founded in 1993 with a focus on estate planning and insurance, Burns Estate Planning & Wealth Advisors only registered with the Securities and Exchange Commission in the past decade.

But looking back to the 1990s, Burns (pictured) said his marketing efforts laid the foundation for his firm’s growth. At the time, the Hammond, La.-based firm focused on in-person educational seminars and radio appearances, he said.

Burns has since expanded into TV, hosting a program broadcast on local stations that is called ‘Total Retirement.’

As clients grew more sophisticated and the markets rallied in the post-recession years, Burns said his firm added investment advisory functions. The first of seven Louisiana and Florida-based satellite offices was opened soon after, in 2015. All the while, Burns said he was testing and refining marketing ideas with other executives in his Advisors Excel group.

‘Because of my marketing I was able to grow very fast and seven years later, outright sell the firm because it’s so profitable,’ Burns said.

The firm’s 30% compound annual growth rate, which Burns said has been consistent over the past seven years, was cited by Prime Capital Investment Advisors (PCIA) when it acquired Burns Estate Planning last quarter.

‘They do mailers, targeting specific neighborhoods with the right type of client, it’s just really well-thought-out for a firm of that size,’ said Dan Erichson, managing director of Park Sutton Advisors, an investment bank that advised Burns on the recent deal.

‘I think he got at least a couple turns more on the multiple because of this organic growth in marketing,’ Erichson added.

Going the way of PCIA

At the time of the deal announcement, which is expected to add nearly $600m in assets under management to PCIA, Burns Estate Planning had seven advisors serving over 650 individual clients.

Since first approaching Park Sutton nearly a year ago, Burns said he has received over a half-dozen offers from potential buyers.

Among the finalists, Burns said, was Alera, a national insurance brokerage firm that recently kicked off an aggressive plan to acquire RIAs and expand its wealth management business.

‘They were a close number two, but PCIA stood out to us,’ Burns said. ‘We wanted investments that we didn’t have as much access to, like private equity and alternative asset classes.’

Echoing Burns’ investment banking consultant, PCIA chief executive Glenn Spencer told Citywire that marketing is what stood out in the recently acquired firm.

Later this year, the $17.3bn PCIA plans to start incorporating some of these marketing strategies into its own nationwide business. Spencer mentioned television shows and in-person events specifically.

The deal also aligns with a broader industry trend of RIAs bringing more services in-house. PCIA could be well-positioned to build out its estate planning services with its recent buy, Erichson said.

‘Ernie can have an influence on what PCIA looks like over the next five to 10 years as they continue to evolve,’ said Erichson. ‘Because PCIA is in its earlier innings of growth than some larger firms, somebody like Ernie can play a big role in helping to grow that business.’

Burns himself has received equity in the deal, and there are no plans to change the name of his firm. Recalling his athletic past from him, his investment banking consultant called Burns competitive and ‘super motivated’ to continue growing the business.

Now in his mid-fifties, Burns has no plans to slow down anytime soon, citing his desire to work another 10 to 15 years and continue growing his business.

‘I’m 55 years old but I feel like I’m 45,’ Burns said. ‘PCIA wants us to keep growing, and they’re going to put an influx of money into the company for me to keep scale. They get a strong company, and in addition I can help train people on how to market and grow their companies.’

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