Cetera Monetary Group’s mid-September acquisition of Avantax, previously Blucora, could not have been the most important deal of the previous few years within the wealth administration enterprise, however based on MyVest CEO Anton Honikman, it is among the extra telling with respect to the long-term trajectory of the RIA trade.

Because the CEO of MyVest, a TIAA subsidiary centered on constructing and supporting enterprise wealth administration know-how in a tax-aware and customized method, Honikman spends a lot of his time excited about M&A developments and what they are saying concerning the technical facet of the wealth administration trade.

As he lately instructed ThinkAdvisor, the Avantax acquisition demonstrates two key themes which might be quickly reshaping the house: consolidation and tax-aware planning.

“Those that comply with the trade most likely weren’t stunned by the information,” Honikman stated. “On one degree, that is persevering with the story of [industry] consolidation … It’s the large persevering with to get greater — and Cetera is already one of many large ones.”

The second key theme, Honikman says, is the “elevation of all issues tax” all through the monetary planning and funding course of.

“I feel [Cetera Holdings CEO] Mike Durbin is aware of precisely what he’s doing,” Honikman continues. “Massive companies are in search of wise, additive acquisition targets, and Avantax is considered one of them. Past mere consolidation, nevertheless, I feel this deal additionally alerts the significance of tax and elevating the idea of tax planning and tax issues in wealth administration.”

The Tax Play

As Honikman notes, Durbin himself has outlined this imaginative and prescient, together with within the authentic announcement of the Avantax acquisition, and leaders throughout the RIA and broker-dealer industries are searching for larger experience and technical capabilities on this space.

“As we explored increasing Cetera’s capabilities into wealth administration and tax experience as a core part of our development technique, it shortly grew to become clear that Avantax was a great goal and a strong match for our enterprise,” Durbin stated. “Avantax will considerably construct out Cetera’s capabilities in tax and wealth administration.”

As each Durbin and Honikman have noticed up to now, disrupting the market with increasing capabilities means extra flexibility for advisors and growing adjoining capabilities and channels to develop a agency’s addressable market. That is seen as a key pattern shifting ahead, they defined, given the potential for charge compression and the trade’s overreliance on market returns to gas income development.

Finally, Honikman says, the Cetera-Avantax deal alerts the truth that shopper service expectations are rising shortly, and that features a new demand for tax-aware investing. What comes subsequent is Cetera’s job of totally integrating and profiting from the Avantax method, a job that’s shared by different companies which have engaged in related acquisitions.

Amongst this group is Hightower, which lately made a strategic funding in GMS Surgent, a suburban Philadelphia-based tax and advisory agency that gives high-net-worth and enterprise shoppers with tax recommendation and advisory providers.

Underneath the deal, GMS Surgent will change into a “wholly owned tax subsidiary” of Hightower, based on a press launch printed by the companies.