“Three: The most important part (far and away) is being philosophically aligned. Knowing Roy and Rich as well as I did would not have mattered at all if our philosophies had been conflicted, because if that piece isn’t in place—if everyone isn’t on the same train—then none of the above mentioned benefits matter because the relationship won’t last. “

Over the years, since our deal with Michael was consummated, we have frequently discussed what we would need to do as a firm to duplicate our success with the Atlanta office. We’ve had many discussions with other practices, but none have resulted in an agreement until this year when the Johnstown office became part of RTD. Early this year, we created a task force to address the issues of mergers and acquisitions. The decisions made were extremely helpful in determining that this new associate would be an ideal fit for our firm.

The first thing you need to determine is what the ideal candidate would look like for your firm. For us, it was the sole proprietor whose success created a situation where compliance, administration, implementation of investments and other areas were becoming so burdensome that it was difficult to devote the time necessary to service and attract clients. While it may be different for your firm, we decided that large multiple advisor firms would be extremely difficult to assimilate into our service offering. Once that candidate is identified, the following process is followed to ascertain if it is a fit for both parties:

Are they philosophically and culturally a fit for our firm? Do they share our core values? These attributes are much more important than location. The proof of this is our success in Atlanta, even though our main office is in Philadelphia.

Both parties need to completely understand their modes of operation. For us, it is providing comprehensive financial life planning versus primarily managing money. Are they comfortable with the financial life planning process as practiced by our firm?

The compensation structure needs to be discussed early on. Are they comfortable with an ensemble approach to compensation or do they prefer a silo method where they are directly compensated by the business they attract and service? For us, the ensemble compensation arrangement is what we have implemented.