AssetMark to Buy Adhesion Wealth from Vestmark

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AssetMark Financial Holdings (ticker: AMK), which operates a turnkey asset management program, or TAMP, on Monday announced a deal to buy Adhesion Wealth, a wholly owned unit of Vestmark.

AssetMark CEO Natalie Wolfsen has been looking for acquisitions that would add technologies and services for advisors.  

Photo Illustration by Barron’s Advisor; Courtesy of AssetMark

Once combined, AssetMark, which offers outsourced asset management and other services, will have about $100 billion of assets on its platform. Terms for the deal, expected to close in the second half of the year, were not disclosed, but it’s expected to be accretive to AssetMark’s earnings in the first year, says Natalie Wolfsen, CEO of AssetMark.

AssetMark has been looking to grow for some time, with Wolfsen saying in November that the firm was actively looking for acquisitions that would help it add technologies and services for advisors.  

“There’s a tremendous amount of synergies between AssetMark and Adhesion,” says Barrett Ayers, president of Adhesion Wealth and one of the company’s founders.

AssetMark, which had $90.8 billion in platform assets as of March 31, provides curated investment solutions to advisors, while Adhesion Wealth offers a robust marketplace that allows advisors to select from a variety of investment solutions. Its platform is in use by more than 2,800 fee-based advisors across 180 RIAs. 

The transaction will allow Vestmark, which has owned Adhesion Wealth since November 2018, to invest further in its core mission, said Vestmark’s CEO, Michael Blundin, in a statement. This means providing “highly scalable managed-account technology and services for portfolio personalization such as direct indexing, customized tax management, and tax transition services to wealth management and asset management enterprises,” he said.

AssetMark and Adhesion will continue to be supported by Vestmark technology, he added. 

Ayers says no changes are expected among senior management and associates as a result of the deal, and the Adhesion brand will remain intact. “We feel the Adhesion name is a great one and one that advisors are familiar with,” Wolfsen says.

The deal comes as the outsourcing market continues to grow, with TAMPs managing $1.14 trillion of the overall $10.75 trillion managed account market as of last year’s fourth quarter, according to Boston-based consultancy Cerulli Associates.

Several large TAMPs have also been in play in recent years, including the union of Brinker Capital and Orion Advisor Solutions in September 2020 and Simplicity Group’s acquisition of Sawtooth Solutions last year.Before the Adhesion deal, AssetMark’s most recent acquisition was Voyant, a financial software provider, in July 2021. 

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