Despite the slow economy, Kent said that other firms will look to partner with each other, but added that the structure of those deals may change to accommodate the current markets. For instance, he suggested the potential of adding a growth bonus component to a firm whose value may have dropped recently.
Young agreed saying advisors can take advantage of partnerships with firms, such as those that partnered with HGGC, which can handle the back-office tasks associated with running a business. Shared service arrangements could be made where one firm handles the tasks taking place away from the customer so that the advisor can get out and do what they love to do, which is interact with their clients, according to Young.
“This is the opportunity for a great wealth manager to get out there and show the client the way,” he said.
It is up to each individual firm to assess how they want to grow whether that be organically or through M&A agreements., Kent said. He cautioned that if a firm decides to grow through acquisitions, it is not a part-time job. It is a comprehensive process and one that will take up a lot of time and effort, he said.
“Organic growth is always a winner,” he said. “When you have something and it works for you, you can start focusing and continue to grow.”
Young also spoke about his transition to wealth management from football. It started when he was on the San Fransico 49ers and the players began inviting different business leaders and venture capitalists to speak to them in the locker room about investment opportunities within Silicon Valley. The team had been practicing in nearby by Santa Clarita, Calif.
Young developed an interest in business and when his NFL career ended more than 20 years ago he moved into the business world. He told the audience that he was reluctant at first to bring his football career into his business life.
“I didn’t want anyone to do anything because I used to throw a football,” he said. “Or somehow that was influenced to make fundamental decisions around your business.”
Later he learned to incorporate the two and found there were themes and metaphors that resonated in his business relationships. He explained such phrases as “fumble the ball” and “get it across the goal line” are ones used in both.
“I could see how profitable it was to talk about those fundamental experiences around team and about heartache and about challenges and losing and all those things that are so visceral in football and it can really inform your relationships in business,” Young said.