Bellevue-based Coldstream Wealth Management has announced plans to merge with Mercer Island-based Paracle Advisors, bringing together two growing independent registered investment advisor (RIA) firms with combined client assets of almost $6 billion.
Terms of the acquisition by Coldstream, its largest merger yet, were not released. The merger is expected to close this summer, subject to client notification and regulatory approval.
Coldstream, an employee-owned firm founded in 1996 and which also has offices in Seattle and Lake Oswego, Oregon, has $4.3 billion in client assets. Paracle, founded in 2004, has $1.4 billion in client assets. Combined, they will have 103 employees, with 23 of those coming from Paracle.
The combined company will continue to deliver wealth management and financial planning for high-net-worth clients across the country, with an emphasis on the Pacific Northwest, according to a news release announcing the deal. The combined firm will operate under the Coldstream brand, with an expanded management team that includes leaders from each firm. Coldstream will retain Paracle’s Mercer Island office.
“We’re thrilled to partner with Paracle Advisors and to bring our two firms together in what we view as a true merger of equals,” Kevin Fitzwilson, Coldstream’s managing shareholder, said in the release. “Successfully combining two leading RIA firms, without inviting private equity or outside equity capital, supports our joint leadership team’s commitment to independence, in spirit, strategy, and service to our clients.”
Anne Marie Stonich, the Paracle co-founder and managing director who will become Coldstream’s chief wealth strategist and marketing lead, said, “After conducting a national search, it was wonderful to find a merger partner in Coldstream, a wealth management firm just miles away from us in the Seattle area, with an incredibly compatible culture and capabilities that round out what Paracle brings to the table. Together, our teams will drive more long-term value for clients, introduce additional offerings, and create a new standard of service.”
The firms proved well aligned with their similar client bases — many of them based in the region’s booming tech sector — and similar client-service philosophies, and employee-ownership opportunities, said Andrew Wang, a principal at Haven Tower Group LLC and Coldstream spokesman.
“A big thing in the wealth management industry is scale — this ability to serve clients, give them a really high level of service … but also be able to do that really efficiently,” he said of the motivation to merge and leverage each firm’s strengths.
Coldstream’s merger with Paracle follows two other smaller deals in recent years: with George R. Pierce & Associates of Seattle in 2016, and The Rainier Group of Bellevue in 2017. Both added depth, experience, and new perspectives to Coldstream, the release said.
Coldstream will continue to seek other merger opportunities with firms whose missions, cultures, and operations are similarly aligned with its own.
Josh Harris, Paracle co-founder and managing director, will serve as managing director of corporate development at Coldstream and as a board member. He also will work with Coldstream’s Fitzwilson to help form strategic partnerships with other independent wealth management firms, the release said.
In the release, Harris said, “It’s terrific to become part of the expanded Coldstream family while retaining our independence. This is a transaction that will serve our business well, and our clients even more so. Going forward, I look forward to developing relationships with other like-minded, relationship-focused firms. Coldstream’s unique vision represents a different path forward for the wealth management space, with an emphasis on longer-term growth, client service, and professional development.”
Other key Paracle moves include Paracle co-founder and managing director EJ Brink’s becoming a portfolio manager and part of Coldstream’s investment strategy group and Duane Duim, managing partner at Paracle, serving as a team lead and relationship manager at Coldstream.