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Why this Memphis company merged with its Nashville-based big brother

Source: Memphis Business Journal

By: Jacob Steiner

On Aug. 1, Memphis-based The Partners Group officially merged with Nashville-based Capital Financial Group, both affiliates of Massachusetts Mutual Life Insurance Co.(MassMutual). The merger was driven by mutual respect and an increasingly competitive industry; and, it’s led to a prominent relocation for the Memphis part of the company.

Based on friendship
Tim Sinks, longtime CEO at Capital, got to know Jerry Corless when Corless first took over the Memphis MassMutual branch about six years ago. They started attending meetings and serving on committees together, and natural interactions kept arising, as each had employees who operated in the other’s city.

With every contact, Sinks said, he came to respect Corless more. “We found out that both of us really have an abundance mentality, and we became friends,” said Sinks. Through the friendship, each of them realized that their counterpart’s firm did some things significantly better than theirs did. The Memphis office, for instance, has a presence in the 401(k) market far beyond Nashville’s. The Nashville firm, in turn, has MassMutual’s No. 1 fee-based financial planning service in the nation.

Corless said the knowledge they would soon have access to that service is the primary reason he’s been able to hire more experienced advisors in the last year.

Other reasoning
Along with the realization of their complementary strengths, Sinks said he approached Corless about a merger because of the direction the financial planning industry is going. With increased regulations and an increasingly competitive industry, Sinks realized he needed to scale up. Combined, the companies will have about 150 financial advisors across five states and more than $2 billion in assets under management.

Since the firms started unofficially working together in January, that increased scale has already paid off, Corless said. “By combining our two firms together, there’s an exponential magnification of the advisor experience we’re able to produce by virtue of the increased scale,” Corless said. “[Since the merger], it’s far exceeded even what I hoped we could be at this point.”

Clark Tower
The combined firm has taken the Capital Financial name and is formally headquartered in the Nashville area, but Corless wants Memphians to know he’s still highly committed to the city. Making that statement is the main reason he gave for the firm’s pending move from 6070 Poplar Ave. to 17,500 square feet in Clark Tower.

“We wanted to drive a stake in the ground that even though we’re merging with a large company in Nashville, we’re still very committed to Memphis,” Corless said. “A tremendous financial commitment has been made in Clark Tower by the owners, so we felt that was the perfect place and perfect symbol of our commitment to the city.”

Corless was referring to $8 million recently spent on renovations to Clark Tower by owner In-Rel Properties. Part of those renovations were meant to better connect the tower to nearby restaurants, such as Hog & Hominy and Fino’s East Italian Deli. The tower’s proximity to those restaurants is much of what impressed Sinks, he said.

“From a tenant perspective, as far as places to eat and do business, that place knocks it out of the park,” Sinks said. Corless said he believes the firm’s new home will help it recruit more elite financial advisors.

In-Rel’s broker in the transaction, Colliers’ Ron Riley, said Capital Financial’s presence will help him recruit other tenants to the building. “It validates the plan we have put in place and provides momentum for those prospects we have working,” said Riley.

Capital Financial was represented in the transaction by Loeb Realty Group’s Barry Maynard.