What if an acquisition by a holding company isn't appealing for an advisor? DeVoe suggests talking with a friendly competitor about a merger of equals. The success of some mergers, like Balasa, Dinverno & Foltz, has been detailed in this magazine on several occasions.
The merger between Kochis Fitz and First Quintile, completed earlier this year, is another example. The deal resulted in a highly profitable firm with $5 billion in assets, and some would estimate about $30 million in annual revenues. For firms of this scale, it's not clear that partners need any exit strategy or liquidity event.
"It creates a succession plan for Tim Kochis and others, opens avenues for younger people and brings together complementary skill sets," DeVoe says. "As a result, one plus one equals three. Until a year ago, we saw about one merger of equals a year. Last year we saw five."
