No jerks and lots of capital: M&A tips at Schwab Impact

investmentnews.com:

The contracts are signed, the champagne glasses have been clinked, and the deal to sell your RIA is done. Still, an owner of a registered investment advisor may have lingering doubts about selling his or her firm.

But there are ways to avoid pitfalls, mishaps and selling to the wrong RIA rollup or aggregator.

One bit of advice to dispel such fears and anxieties is to focus on the attitudes and behaviors of the other firm in the deal. Perhaps first and foremost there should be a simple rule, “no jerks” when making a deal, said Shannon Eusey, CEO of Beacon Pointe Advisors, the largest female-led RIA with close to $25 billion in client assets.

She was speaking in Philadelphia at Impact, the annual meeting for thousands of RIAs that use the Charles Schwab Corp. and its custody group, Schwab Advisor Services, to hold client assets. The title of the panel of eight RIA executives, split evenly between buyers and recent sellers, was, “What happens after the merger or acquisition?”

Eusey said the pressure was on to hire. The financial advice industry is fighting over talented professionals and the fact that there aren’t enough women in the industry. Against that backdrop, she stressed the importance of shared values, beliefs and behaviors when making an acquisition work.

“No jerks, no jerks, no jerks,” she said. “It’s all about culture. As long as it’s a cultural fit for the organization, we can hammer out and work out the rest of the details.”

That’s not all.

Along with shared behaviors and values, there’s always financing to consider and how big a piece of the firm to sell when making a deal, said Rush Benton, senior partner for strategic growth at Captrust Financial Advisors, which oversees $832 billion in client assets.