TA Associates to acquire NorthStar Financial Services Group, parent company of Orion Advisor Services
Hot off the wires this morning (thank you FiComm) is news of another acquisition in the advisor fintech space.
Today, private equity firm TA Associates announced an agreement to acquire a majority interest in NorthStar Financial Services Group, LLC.
Orion Advisor Services included in the deal
NorthStar has nine subsidiaries under the company, with Orion Advisor Services, LLC being the most recognizable to advisers interested in financial technology solutions for their business. Collectively, NorthStar and its subsidiaries manage and administer roughly $275 billion in assets, with Orion making up at least $180 billion of that amount (see: Orion Celebrates Fifteen Years of Serving Advisors With Record Growth from Marketwired.com)
Terms of the deal were not disclosed.
This comes on the heels of two acquisitions announced last week. First, Fidelity announced a deal to acquire eMoney for a rumored amount of $250 million according to sources close to the deal, followed by an announcement by SS&C Technologies to acquire Advent Software for $2.7 billion.
With three M&A deals in one week, financial technology service providers are proving to be attractive targets for acquisition.
The Future of FinTech M&A
Looking to the future, these deals seem to validate two trends in the industry. First, independent advisory firms continue to seek ways to scale their operational efficiency, and trusted third party providers offer attractive solutions to achieve such goals. Outsourced portfolio management (Orion Advisor Services and Advent Software) and account aggregation, client portals, and streamlined financial planning (eMoney Advisor) give advisers the leverage they need to growth their business without having to add significant overhead or add to the headcount of the firm.
Second, independent advisory firms are poised to continue to attract business from clients and investors dissatisfied with traditional wirehouse and brokerage providers, which may lead to a significant shift in asset flows away from transaction- and product-oriented businesses to fiduciary advice offered by independent RIAs.
Since M&A activity has dramatically picked up in 2015, here’s my question to you:
Who’s next?
