WASHINGTON -- Advisors attempting a merger or acquisition should take advice variously from the Boy Scouts and the ancient Greeks, say experts: Be prepared … and know thyself.

Those were the messages that three deal-tested wealth management firms offered advisors at Schwab Advisor Services' annual Impact conference last week.

All three firms -- Aspiriant, Private Ocean Wealth Management and Sequoia Financial Advisors -- stressed the importance of laying the groundwork for a deal through careful preparation and a strategic plan based on the firm’s internal philosophy and values.


For Los Angeles and San Francisco-based Aspiriant, client service has driven the M&A strategy, said firm chairman Rob Francais. Growth by acquisition, Francais said, has allowed $7 billion Aspiriant to accomplish several goals, he said:

  • Aggregate disparate      talent to improve its service offering.
  • Aggregate client assets      to drive down product costs.
  • Use asset scale to solve      investment inefficiencies.
  • Facilitate succession      options.
  • Open locations around      the country to boost client opportunities.
  • Create a durable,      independent firm.

Aspiriant’s strategy, Francais said, is aligning the interests of affluent families and talented advisors who are “cut from the same cloth.”
Affluent families, he said, want objective advice, comprehensive service, continuity, responsiveness, a durable organization, innovative solutions and a single point of contact -- and talented advisors want to fulfill those demands in a firm offering a talented team, clear expectations, career development, competitive compensation and equity participation.

Aspiriant, he said, strives to identify, understand and satisfy the interest of the two groups in a durable organization.

Four years after Aspiriant was created through the merger of California firms Quintile and Kochis Fitz in 2008, the firm expanded by folding in a number of Deloitte Investment Advisors offices around the country.

Future growth, Francais said, will follow several key principles -- remaining independent indefinitely, creating broad equity ownership (there are currently more than 40 owners), developing scalable services, aggregating client assets and a common investment platform, and using organic and inorganic growth to develop a national brand and establish a legacy.

But Aspiriant does not plan to buy other firms outright, use external capital or allow passive owners, Francais said.


Driving factors behind Sequoia’s M&A strategy included an effort to find opportunities for a rapidly expanding advisory team, along with a desire to leverage its  scale and broad service offering and maintain a strong capital base, said  Tom Haught, president of the Ohio- and Florida-based firm.

After forming a strategic partnership with a CPA firm in 2000, Sequoia hired a managing director of business development in 2010 to help identify acquisition targets, and created a compensation plan that rewarded the dealmaking.

With $1.4 billion in assets under management, Sequoia sees itself as a strategic, rather than financial buyer, Haught said. But “some deals are more strategic than others,” he noted. “Generally, the more strategic the fit, the more you are willing to go to the higher end of your valuation range.”

When deciding which firms are the best fit, Sequoia has “very little flexibility” when it comes to accounting, CRM systems and investment process branding, Haught said. But the firm does try to remain flexible when considering compensation, as long as there is a plan to migrate to a common system and merge physical locations, marketing and pricing and service models.

Immediate access to capital is significant advantage for M&A deals, and Sequoia’s strategic plan is to “retain 7% of gross revenues annually to build capital reserves,” Haught said.


Succession planning, growth and scale spurred Private Ocean’s M&A strategy, said CEO Greg Friedman.

The firm was formed several years ago when Friedman, the sole owner of his own boutique firm in the San Francisco Bay Area, was 48; he began talking with a friendly competitor in the same market whose primary owner was 63 and looking for a succession plan.

Lengthy discussions, negotiations, due diligence and preparation laid the groundwork for the merger, he recalled; the combined firm now has more than $800 million in AUM.

Friedman, who also owns CRM maker Junxure, urged advisors contemplating a similar transaction to pay close attention to the expectations held by both parties. “I can’t discuss this enough,” he stressed.

In addition to frequent communication and a firm commitment on both sides, Friedman said he learned the hard way that everything needed to be carefully spelled out in writing. The one regret he had, Freidman said, was not documenting all the discussions that were held prior to the merger.

Surveying all the clients from both firms was also critical, he said. “Both sides need to know the stories that clients at both firms were told.”

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