Steward Partners Global Advisory is set to acquire Freedom Street
Partners, marking its first traditional M&A deal. Freedom Street Partners,
based in Chesapeake, Virginia, manages $3.2 billion in client assets and
employs 38 advisors who collectively generate approximately $26 million in
annual revenue. These advisors, who previously operated under Raymond James
Financial, will transition to become employees and shareholders of Steward
Partners, headquartered in Washington D.C., according to an official
The acquisition, expected to be finalized by year-end, signifies a strategic
move for Steward Partners into the realm of mergers and acquisitions. Unlike
its previous acquisition of Umpqua Bank’s wealth unit in 2021, which was
structured as a right to recruit Umpqua’s brokers rather than a full
acquisition, this deal will establish a new M&A division at Steward Partners
led by Freedom Street’s CEO, Scott Danner.
While this M&A strategy may incur higher costs compared to recruiting
individual brokers, Steward Partners aims to solidify ownership of acquired
advisors’ client rosters, supported by non-compete and non-solicitation
Jim Gold, CEO of Steward Partners, expressed his motivation for this
strategic shift, noting, “One thing that always frustrated me when I chatted
with bankers and other folks is why we weren’t getting true RIA valuations.
And the single answer I always got was that it’s because you don’t own any
of the clients.”
Gold predicts that the Freedom Street division will outgrow Steward’s
existing employee and independent contractor channels within five years.
This new unit will target registered investment advisors (RIAs) with
approximately $500 million in assets under management, especially those
facing challenges related to increasing compliance and overhead costs.
Additionally, it will offer retiring Steward advisors the opportunity to
sell their practices internally through Freedom Street.
Steward Partners, founded a decade ago by former Morgan Stanley Smith Barney
managers, currently manages $27.4 billion in assets. The firm is financing
its expansion efforts, in part, with a $140 million line of credit, and it
is actively working to extend this credit line. Steward Partners is backed
by The Cynosure Group, a private equity firm, and The Pritzker Organization,
a merchant bank associated with the billionaire Pritzker family.
Scott Danner, the founder of Freedom Street Partners, launched the firm in
2016 after a 13-year career at Edward Jones. He decided to pursue a
partnership with a larger organization to gain support in areas such as
business management and human resources as he felt that further growth was
challenging without such assistance. Danner had primarily expanded his firm
through internal succession programs and acquiring approximately five
Freedom Street’s decision to join forces with Steward Partners was
influenced by the ability to continue custodying client assets with Raymond
James through its Investment Advisor & Custody Services unit.
Although Steward Partners started as an independent practice at Raymond
James Financial Services, it launched its own broker-dealer in May 2022
while maintaining its status as a custody client of the St. Petersburg,
Steward Partners enters a competitive M&A landscape, driven in part by
private equity firms, roll-ups, and foreign buyers. Many of its competitors,
such as Hightower Advisors and Sanctuary Wealth, initially focused on
recruiting breakaway brokers and subsequently sought expansion opportunities
through acquisitions as part of their growth strategies.