A year after two bestselling authors teamed up with the heady dream of building the country's first national RIA to serve a million clients, the dream has died.
Bestselling "Finish Rich" author David Bach is out as vice chairman of Edelman Financial.
"We are both disappointed, but that is how life goes sometimes," author Ric Edelman says of the split, while declining to discuss the reasons behind it. "We have no animosity towards each other, and we wish each other the best. David is a great guy and I enjoy spending time with him, and it's a shame that we won't be doing so in the business going forward."
Bach’s departure will have no impact on the firm's strategy or growth, Edelman adds.
Bach also declined to discuss the details of the split, but cited a lengthy list of achievements during his year with the firm, including a rise in AUM from $12 billion to $15 billion and a corresponding increase in clients from 24,000 to 28,000.
"It was pleasure to do over 135 media appearances, providing financial education messages to over a hundred million consumers and doubling the media impressions of the firm," he wrote in an email.
Edelman convinced Bach to come and help him build Edelman Financial last year, in the hopes that he could help the firm attract some of the seven million readers who have bought Bach's 11 bestsellers. . Bach, who began his career as Merrill Lynch advisor , launched his book series in 1998 with the first title Smart Women Finish Rich.
'ARRANGEMENT OF CONVENIENCE'?
"We believe that by working together we can dramatically make one plus one equal 11," Edelman said at the time. Edelman's own personal finance books have sold a million copies.
"We want," Bach said in the same interview, "to become the leading firm in America, where when a woman goes through anything that she thinks of Edelman Financial."
Industry observers say the dissolution of the partnership doesn't come as a surprise.
"This was an arrangement of convenience," says Nexus Strategy consultant Timothy Welsh, "not an integrated merger of philosophies and businesses that had enduring value. Basically, this was a ‘your-platform-will-help-my-platform-and-if-it-doesn't-let's-make-it-easy-to-split arrangement.’ So, when the synergies didn't show up immediately, they quickly exited each other."
'APPROACH IS VIABLE'
Edelman disagrees. "This was a very good effort," he says. "It was a very valuable experience and it confirms for us that this approach is viable. We just need to find the right people."
Bach's departure won't impact Edelman's goal of building the country's first RIA with a broadly recognized brand name, Edelman says. In the meantime, he continues to look for a CEO who can replace him in that role and free him to promote the firm and focus on education.
In 2012, the private equity firm Lee Equity Partners bought 58% of Edelman Financial, although. Edelman remains the largest individual shareholder with a 25% stake. He still plans to sell off at least part of the company in a new deal somewhere down the road.
"Although we are disappointed that our venture with David proved unsuccessful," he says, "we remain undeterred in our effort to achieve the goals that had led us to strike a deal with David in the first place."
- Edelman Aims at 'Finish Rich' Author's Millions of Readers
- Ric Edelman Seeking to Hire a Successor
- Ric Edelman Names COO, as CEO Search Continues
- Author Carl Richards Joins Buckingham