Can ‘pure-play’ wealth manager Avantax compete with the giants?
November 21, 2022 by Tobias Salinger
Blucora’s move to spin off its online tax software arm in order to become a “pure-play” wealth management firm sets it on a collision course with the giants dominating the industry.
The Dallas-based company will adopt the name of its wealth management arm, Avantax, after the close of its deal to sell TaxAct to a private equity firm for $720 million, Blucora said last week. In the immediate term, an undisclosed number of Avantax financial advisors who also have stock in Blucora will profit from an expected $400 million to $450 million in capital that the firm plans to return to shareholders from the sale, CEO Chris Walters said in an interview. In the longer view, Avantax is betting that its niche of certified public accountants and other tax professionals with wealth practices on the side and a newer line of M&A business will enable it to compete with the massive firms at the top of the industry’s food chain.