High Flying

Not that getting into the acquisition business was easy.

“When we first started, I had to deal with custodian partners and different M&A folks in the industry kind of chuckling under your breath, ‘All you have is a business plan and an idea. Good luck with that.’ He had no transition team yet, and he says he spent too much time chasing wirehouse people who were too encumbered with trailing commissions. He also relied too much on custodians and recruiters to make introductions.

“There are a million moving parts” to an acquisition, Cooper says. “And I only anticipated a quarter million moving parts.”  

To keep the culture is place, the firm is looking at fee-only RIA wealth managers, no wirehouse people or hybrids, firms that use third-party money managers (not stock pickers). “That means they’re more outwardly focused on their clients than inwardly focused on their 10Q and 10K.”

The firm has bought five firms so far, and was finalizing its sixth in Boston at press time, its first East Coast presence far away from its California and Scottsdale, Ariz., offices. Cooper says that he’s also looking at firms in Ohio, Connecticut, Texas and Washington state. The plan is to make four such acquisitions a year.

No IPO
Cooper says that people can call the strategy a rollup if they want to, but an important distinction is that Beacon Pointe is not planning to do an IPO. Instead, the company wants to build a national brand and footprint. What does that mean for succession at Beacon Pointe, especially if 80% of the company at the holding company level is held by Flint and Eusey?

The partners say that the succession plan is in the youth of the firm. Of the seven partners, only Flint is over 50, says Eusey, and the other six are under 45.
“So it’s a young, smart energetic culture here with many women in the firm and many women in leadership positions,” Cooper says. (The firm also forged a Women’s Advisor Institute at the beginning of 2011. The institute offers a website, workshops, tips and resources and is meant to reflect not only the diverse values of different clients but also the firm itself, which has a substantial number of women in staff and leadership roles.)

The idea of letting people run with ideas is partly the reflection of Flint, who, though he is mainly running the institutional business, has stamped the culture with his personality.

“You want people who are a little bit off the trail themselves, so if they have good ideas, then let them run with the idea and then support them,” he says.