Cetera Monetary Group’s mid-September acquisition of Avantax, previously Blucora, might not have been the largest deal of the previous couple of years within the wealth administration enterprise, however in accordance with 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 expertise in a tax-aware and customized method, Honikman spends a lot of his time enthusiastic about M&A traits and what they are saying concerning the technical facet of the wealth administration trade.

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

“Those that observe 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 massive persevering with to get greater — and Cetera is already one of many massive ones.”

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

“I believe [Cetera Holdings CEO] Mike Durbin is aware of precisely what he’s doing,” Honikman continues. “Massive corporations are on the lookout for wise, additive acquisition targets, and Avantax is considered one of them. Past mere consolidation, nevertheless, I believe this deal additionally indicators 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 unique announcement of the Avantax acquisition, and leaders throughout the RIA and broker-dealer industries are in search of better 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 rapidly grew to become clear that Avantax was a perfect 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 prior to now, disrupting the market with increasing capabilities means extra flexibility for advisors and creating adjoining capabilities and channels to broaden a agency’s addressable market. That is seen as a key pattern shifting ahead, they defined, given the potential for payment compression and the trade’s overreliance on market returns to gasoline income development.

In the end, Honikman says, the Cetera-Avantax deal indicators the truth that shopper service expectations are rising rapidly, and that features a new demand for tax-aware investing. What comes subsequent is Cetera’s activity of totally integrating and making the most of the Avantax method, a activity that’s shared by different corporations which have engaged in comparable acquisitions.

Amongst this group is Hightower, which just 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.

Beneath the deal, GMS Surgent will turn out to be a “wholly owned tax subsidiary” of Hightower, in accordance with a press launch printed by the corporations.