PE Tech Report


Like this article?

Sign up to our free newsletter

Parthenon to purchase Wells Fargo’s HD Vest Financial Services

Parthenon Capital Partners and Wells Fargo & Company (NYSE:WFC) have entered into a definitive agreement for Parthenon Capital Partners to acquire Wells Fargo’s HD Vest Financial Services business.

Following the transaction, HD Vest’s existing management team, led by Roger Ochs, will continue to operate the business. Founded in 1983 and based in Irving, TX, HD Vest provides independent financial solutions to over 1.8 million retail investors through an advisor base of over 4,800 securities-licensed tax professionals.

Ochs, says: “We are excited to partner with Parthenon Capital Partners to complete the purchase of HD Vest from Wells Fargo. As a standalone entity under this new ownership structure, HD Vest will benefit from Parthenon’s expertise within the financial services industry as well as Parthenon’s significant financial and strategic resources. Both the management team and Parthenon are committed to investing in the future growth of HD Vest and have high expectations for the company’s potential. The executive leadership team of HD Vest, Wells Fargo, and Parthenon are each committed to ensuring a smooth and seamless transition for our advisors and our clients.

"There will be no changes to the HD Vest leadership team or home office staffing levels as a result of this transaction. Additionally, our advisors will continue to have access to the same products, services, and tools to offer clients as they do today. Wells Fargo’s clearing business, First Clearing Correspondent Services, will continue to provide brokerage clearing services for HD Vest. We are excited to have Parthenon as our strategic partner and look forward to working together to achieve our goals.”

Andrew Dodson, a Partner at Parthenon Capital Partners who is involved in the firm’s financial services investments, says: “We are excited to have the opportunity to partner with Roger Ochs and the executive team at HD Vest to execute the company’s growth strategy. HD Vest is well-positioned to capitalise on the growing demand for independent financial advice, particularly as the country’s large Baby Boomer population begins to reach retirement age. After years of thorough industry benchmarking, we concluded that HD Vest has a uniquely attractive operating model serving a large, but specialised market.”

Wells Fargo’s decision to sell HD Vest followed a strategic assessment that determined that the firm’s business does not align precisely with the business model of Wells Fargo Advisors, Wells Fargo’s retail brokerage unit, which is centred on supporting full time financial advisors who are focused primarily on serving and advising affluent and wealthy clients.

Danny Ludeman, president and CEO of Wells Fargo Advisors, notes that the agreement to sell HD Vest does not reflect a change in the brokerage firm’s approach to serving independent advisors through Wells Fargo Advisors Financial Network (FiNet). “Wells Fargo Advisors remains firmly committed to serving financial advisors though multiple channels, including FiNet, which is an integral part of our business model,” Ludeman says.

Wells Fargo Securities served as exclusive financial advisor and Simpson Thacher & Bartlett LLP served as legal counsel to Wells Fargo & Co. in conjunction with this transaction.

Like this article? Sign up to our free newsletter