The lessons learned in the Alerus acquisition strategy
The recent acquisition of ABG’s affiliate in MN with over $6 billion in DC assets boosting Alerus Retirement to $23 billion is a bold and significant move by a regional bank and open architecture record keeper. Unlike other providers affiliated with a “Wall Street” or large financial service firm, Alerus has a real shot to remain viable without having to get too big. And unlike other providers owned by PE firms, Alerus is unlikely to be sold or merged with another, larger record keeper.
Check out the full story on NAPA Net at: http://www.napa-net.org/news/managing-a-practice/service-providers/alerus-retirement-acquires-abg-mn-affiliate/?mqsc=E3814631&utm_source=WhatCountsEmail&utm_medium=NAPA_Net_List+Napa-Net%20Daily+Napa-Net%20Daily&utm_campaign=NAPA%20eNews%20-%2010.26.15%20-%20(Mon)
Also interesting: ABG MN founders Brad and Grant Arends are staying with their advisory services business which has $2.6 billion AUM. Though $6.3 billion is a lot for smaller record keepers, ABG MN was having trouble competing with bigger competitors for larger plans losing some of their best clients as they became more attractive. The Arends go from owning a smaller record keeper to running one of the larger DC advisory groups.
Many TPAs that currently do record keeping have sold a bundled service which also includes compliance and advisory services. Though it makes no sense on many levels to keep the record keeping services which comes with high technology costs and liability, many are worried that giving up record keeping means losing the other services.
Time to learn from the Arends brothers: focus on areas where you have a competitive advantage, not where you are constantly trying to keep up – and losing.
