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

statement.

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

agreements.

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

external practices.

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,

Florida-based firm.

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.