Stephen Janachowski is sometimes amused by all the merger talk going on in the financial advisory space.

“I’m getting these e-mails,” he says, “from various sources about Webinars on acquisition strategies and mergers as though somehow it’s this really hot thing that’s easy. It’s not easy. It’s hard and it takes a long time.”

While other firms go off on acquisition sprees, Brouwer & Janachowski, the San Francisco Bay Area firm, has been very careful about who it partners with. The last merger the Tiburon-based firm did was in late 2007, when it bought Seton Smoke, getting help with capital from the Fiduciary Network, a minority stakeholder. This year, the firm broke a long dry streak by purchasing Stanley F. Green LLC, a two-person shop from Larkspur, Calif., with $100 million in assets.

Next to other RIA firms’ acquisition trajectories, Brouwer & Janachowski’s might seem positively tortoise-paced. But Janachowski, president and CEO, says it takes a long time for him and his partner, Chairman Kurt Brouwer, to find the right fit. Anything might blow a deal: differing philosophies with other managers, different investment styles or partners at a target firm who don’t seem to get along.

“The thing is, you’re not going out and buying a piece of property, you’re not buying a stock,” Janachowski says. “This is two or more people who have to decide that they like each other, that they have a lot in common and want to work together, and that’s not always easy.”

In both of its two acquisitions of the last six years, however, his firm found pay streaks: aging owners of good firms who hadn’t come up with succession plans and whose clients were nervous about it. In 2008, when the firm tapped Seton Smoke Capital Management and its founder, Bob Smoke, then in his early 60s, the succession issue was one of the first things to come up among Smoke’s clients, who had seemingly kept their nervousness to themselves up to then.

“The first thing we did is we had a little breakfast gathering and invited their clients, so Kurt and I and some of the other people at Brouwer & Janachowski could meet the clients at Seton Smoke. And a number of [those clients] had comments such as, ‘Well we’re really happy [Smoke is] doing this because we were wondering what his long-term strategy was going to be.’ So clients may not say anything, but they think about it.”

Initially, the firm hooked up with the Fiduciary Network in 2007 to start a succession plan, Janachowski says, “to get the funding available to get equity in the hands of the next generation. That’s a problem that most firms have, and that’s why firms are looking to merge or sell if they don’t have a succession strategy. Because it takes a long time to put it together.”

Janachowski says that the internal equity distribution was the main reason his firm affiliated with the Fiduciary Network. It was never the firm’s intention to go on an acquisition tear. It’s just that succession issues loom large for all firms, including his. Brouwer is 62, Janachowski says, and the firm has tried to spread some of its wealth to a new generation of partners, three of which are under 40. Acquisitions are another way to help.

“I don’t plan on retiring anytime soon,” Janachowski adds, “but I’m thinking ahead, in terms of I want to make sure I have a senior group of advisors and management … to make sure that, if I do want to retire, I can. Also from a client’s perspective, clients ask you, how old are you. And the implication is, ‘How long are you going to be doing this?’ And my answer is, ‘I’m only 56, I’m going to be doing it for quite some time.’ Nonetheless, clients do wonder if their advisor does retire, then what do they do?”

The opportunity rolled around again with Green, who is 68. The new merger, announced in September, boosts Brouwer & Janachowski’s client number from about 400 to some 500, he says, and the firm now has about $850 million in assets under management and oversees another $250 million in 401(k)-type assets.

Many of the firm’s clients are professionals that already have some wealth. The Bay Area address might lead one to think that the firm has tapped a vein of young tech wealth, but Janachowski says that’s not the case.

“We’re in Tiburon, which would be about the same distance from Silicon Valley as White Plains is from Manhattan,” he says. “We do have younger clients, but most of our clients have been successful professionals. We have a lot of lawyers as clients and doctors and CEOs of companies. So most of them have already been successful in their career as opposed to someone who’s 25 years old and just made $100 million with stock.”

That’s made the clients’ focus a bit different. “Getting rich is one thing, but staying rich is an entirely different thing.”

Janachowski and his partner launched the firm in 1987, and touted themselves as mutual fund and ETF “fund masters,” following a penchant for new start-up funds run by veteran portfolio management teams. For example, one of its picks in 2004 was the Primecap Od­yssey Aggressive Growth and the Primecap Odyssey Growth funds, launched by managers who had been doing similar work as subadvisors for Vanguard (funds he’s still with). The Vanguard funds had gotten too big for what he thought the Primecap managers’ strengths were, says Janachowski, and his firm bet that the small and micro-cap companies giving the Primecap team its extra oomph would do better in newer, smaller fund formats and make them more nimble.

“What they’re really good at is finding those smaller opportunities, and when the funds are so big it doesn’t make much of a dent,” Janachowski says.When the Primecap managers set up their own series of funds, he was ready to move money to them. They were also quiet and shunned the limelight, one of the other reasons Janachowski liked them.

His firm (and its merger partners) focus on no-load mutual funds and ETFs, turning up their noses at market timing and momentum investing. Janachowski describes the firm’s favorite funds this way:

“They don’t hit the radar screens, that’s what it is. In other words, if a fund comes out and it’s got less than a three-year track record, in most cases it doesn’t show up on anybody’s publication roster—you know, the funds with the best three-year records or the best five-year records—it doesn’t show up. So most people don’t know about it. So one of the advantages of a fund is when they have stable cash flows—or slightly positive cash flow is the best.

“But when they have a huge inflow of money when they get written up because they [outperform] and they’re in all the financial publications, they may like it but it’s a problem for them because now they have all this new money they have to invest.”

Today he likes the Goldman Sachs Strategic Income fund, a bond fund with a broad mandate that can short if necessary. “It’s a relatively new fund; it’s about roughly three years old,” he says. “And what I like about it is it’s a go-anywhere fixed-income fund, and what I mean by that is not only will they go anywhere globally, but they can go short, they can use some very sophisticated hedging strategies. It really is a hedge fund in a mutual fund wrapper. It’s a very sophisticated vehicle. So, for example, when we touched the lows on 10-year U.S. Treasurys, they shorted U.S. Treasurys and so they actually have the ability to go to an overall negative rate.”

Janachowski says that if the firm likes a fund or manager, he stays with him a long time. The two funds the firm has owned the longest are the Pimco Total Return Fund (since its inception in 1987) and the Harbor International Fund (since 1989). “We’re really buying the brains of the manager, and as long as they keep doing what they’re doing, we tend to stay with them. So we don’t have a lot of turnover in our portfolio.”

Target acquisition companies must have that same fondness for the unsung fund. But another reason his firm might acquire is that it’s simply a way to buy up talent. With all the great demand for financial advice in the Bay Area, he says it’s hard to find good staff there, and the two acquisitions have allowed him to bring some fresh blood on board.

“My intention is that they are going to be an equity owner, so I’m thinking about somebody that potentially has a career with us of 20 or 30 years or more. I’m going to be really picky about who I select. So I just don’t need to fill this chair, I want someone who’s a superstar.”

Right now, the firm has five next-generation owners besides Janachowski and Brouwer. Two of them are over 40 and three are younger. (“We ask for their ID and make sure they’re over 21.”) One of those came over from Seton Smoke and had a big list of his own clients. Janachowski has also offered ownership to a sixth person. The plan is to broaden that number over time. “The key is, who is a long-term player? Who is going to help us grow the company and take care of our clients?”

Brouwer is a little older than Janachowski, but has promised to stay for a few more years. The latter says he has no plans to retire. “I just have too much energy and I’d get bored. I don’t know what I would do if I retired. As long as you are mentally fit, you can do this for a long, long time.”