After starting the year with more than half a billion dollars in managed assets, Los Angeles area-based Falcon Wealth Planning has made the first acquisition in the firm’s history.
The deal to buy Rivermark Wealth Management was completed on Thursday, eight years—almost to the day—after Falcon was founded by Principal Gabriel Shahin.
Shahin started out with eight clients and $50 million in AUM on March 5, 2015. Today, the Falcon team comprises 45 people, including 13 certified financial planners, overseeing close to $600 million for more than 800 clients and 14 retirement plans. The firm operates out of 14 office locations in California, Seattle, Chicago, Las Vegas and Tempe, Ariz.
Last year, Shahin was a winner of the Wealth Management Industry Award’s Rising Star of the Year award.
Falcon’s inaugural acquisition expands the firm’s footprint in the San Francisco Bay Area and establishes a foundation for continued growth in the nation’s Northwest, Shahin said.
San Jose-based Rivermark was founded by Ron Guay, who specializes in tax planning and advises on about $250 million in client assets. After beginning his career in corporate finance, Guay made the move to personal finance and tax planning in 2018, when he launched his practice on the CGN platform, formerly known as Garrett Investment Advisors.
In 2020, he moved to Prosperity Capital Advisors, an Ohio-based RIA platform with $1.7 billion in assets, and officially became Rivermark.
“What I’ve learned on the journey in finance, both corporate and consumer, is my success has been my ability to help clients connect their spreadsheets to their stories,” he said in a statement.
Negotiations began in early 2022, and both parties took their time ensuring values were aligned.
“I chose Falcon because their process of delivering financial advice through education and empowerment aligns with my values and approach as an advisor,” Guay said. “Serving all clients on a fiduciary basis, taking the time to really understand each client’s unique needs and priorities, and providing first-class tax and financial advice is a formula for making a positive impact and something I’m excited to help the firm bring to the Bay Area.”
Shahin said he “bootstrapped” his way to this milestone, eschewing widely used RIA launching platforms and external financing to build the firm himself from the ground up.
Until now, Falcon’s growth has been exclusively organic, he said, through client acquisition—largely through an aggressive marketing program to which Shahin dedicates as much as 15% of revenue—and targeted “acqui-hires” that bring in books of business—primarily through the use of LinkedIn.
“Our process is everything,” Shahin said of the marketing initiative, explaining that it yields between 700 and 800 leads each month.
“We have a team of five business development people that are just literally on the phones all day long, setting appointments … we had 38 opportunities this week to convert to clients.”
Recently, Shahin has begun considering exploring a minority investment, “to take a few chips off the table.”
“Right now, it’s at a point where I’m personally making less money at $600 million than I was at $100 million,” he said. “My personality is just grow, grow, grow, reinvest, reinvest, reinvest. So, it would be nice to not have to think so much about the money and do what my mindset is great at, which is growth.”
He’s not prepared to consider any majority investments at this point, however. “A lot of people just want majority, which is not what I’m interested in,” he said.
Shahin has been in conversations with a few private equity investors but has concerns about becoming oversaturated with capital meant for continued M&A transactions. One firm he’s in preliminary discussions with told him he’s already operating as a $2 billion AUM firm and suggested positioning Falcon as an acquisitive platform.
While he’s interested in exploring more M&A opportunities, Shahin said: “We’re not an aggregator. Our goal is not just to make a quick profit.”
“A firm that would be a good fit would be client-first and have a real passion for planning,” he said. “And we’re a fee-only shop, so they would need to be CFPs.”
Shahin, who was headed to Arizona to open another new office on Thursday, said he fully expects to be at $2 billion in assets within the next four years, primarily through continued organic growth, but his vision gets “a little fuzzy” after that.
“From there, it’s just this big reassessment because it’s a much different operation when get to that level,” he said. “So, from there we just kind of figure out what we want to do next. I’ve been told it will become clearer.”