The Secret $11 Billion RIA of Eaton Vance — And Its Future Under Morgan Stanley

“We’ve been described as the best kept secret in wealth management and we’d very much like to change that.”

(Michael Nagle/Bloomberg)

(Michael Nagle/Bloomberg)

There is an RIA that can trace its heritage back to 1924, that just closed one of the biggest deals in wealth management this year, and now manages over $11 billion. Yet smaller and sleepier firms routinely get more attention in the press. Other than its parent company and clients, relatively few people know this RIA exists. At least at the moment.

“We’ve been described as the best kept secret in wealth management and we’d very much like to change that,” David McCabe, president of Eaton Vance WaterOak Advisors, told RIA Intel.

A glimpse of limelight shined on the firm after it closed a deal Nov. 2 to acquire WaterOak Advisors, a $2.3 billion RIA in Winter Park, Fla., leading it to change its name and bringing total assets under management to $11.4 billion. If it were an independent RIA, Boston-based Eaton Vance WaterOak Advisors would be among a short list of companies that size, in terms of assets and other metrics. It has 1,500 clients and 69 employees.

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In recent years, through referrals alone, the wealth manager has added billions of dollars. Most clients are high-net-worth families who “understand the importance of sophisticated integrated planning aligned with investment management,” McCabe said, and “who appreciate the customization and personalization that comes from working with a boutique investment advisor with access to world-class resources.”

Being a wholly owned subsidiary of Eaton Vance is an “enormous advantage” and has been an important contributor to the wealth manager’s success, McCabe said. Many wealth managers have in-house investment professionals and resources and do a fine job for their clients. But Eaton Vance WaterOak can offer the same or better at a “very competitive” fee because of the scale of its owner.

Increasingly customized investment portfolios and financial plans are the future of wealth management, according to McCabe, and that evolution has already proved to be a tailwind helping his firm attract clients and employees. “The ability to attract and retain talented advisors, I think only a few firms are able to do this and we are fortunate to be one of them.”

But will advisors want to join an RIA under Morgan Stanley’s umbrella, which includes one of the largest wealth management businesses that some advisors have left to join independent firms? (Morgan Stanley agreed to acquire Eaton Vance, the $507 billion asset manager for approximately $7 billion on Oct. 8.)

McCabe isn’t worried about that at all. He thinks the strategy behind the deal is “clear and compelling.” Eaton Vance WaterOak Advisors will remain a separate RIA and get to keep its new name. Much of its success thus far has been attributed to its arms-length relationship with its owner, Eaton Vance. Now it will have an even bigger supporter behind it in Morgan Stanley.

In the fast-changing U.S. wealth management industry, prolific RIA buyers and others seem to be coming out of nowhere. Eaton Vance WaterOak Advisors might not be a secret for long.

Michael Thrasher (@Mike_Thrasher) is a reporter at RIA Intel based in New York City.

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