Masters of the Universe aspiring to strategize and execute merger and acquistion deals in the registered investment advisor space need four personality factors for a successful transaction, according to a white paper published by Hightower, a national wealth management firm based in Chicago.

The report was written with market research firm Riedel Strategy and a team of social scientists, who developed a scientific approach to help advisory businesses considering such a transaction to find the right cultural fit.

According to the study, the following four personality factors play a key role in the long-term success or failure of a strategic partnership:

Culture determines a firm’s relationship with clients and colleagues. The research found four personality orientations related to culture: innovation and creativity (visionary); success and achievement of goals (achiever); efficiency and integrity (protector); togetherness and mutual well-being (nurturer).

Drive pushes an advisor to succeed in his or her business. The research found three personality orientations related to drive: aggressively grow and scale the business (builder); optimize work-life balance (optimizer); and slow down and transition ownership (transitioner).

Passion is what an advisor loves most about being an advisor. The study found four general orientations related to passion: growing and running a business (entrepreneur); optimizing systems and operations (engineer); building and managing portfolios (investor); working with clients (coach/guardian).

Control is a firm’s relationship to leadership and change. There are four personality orientations related to control: comfort with change and allowing others to be in charge (delegator); comfort with delegating control to others as long as the advisor retains his or her authority (democrat); and lack of comfort giving up control to others (autocrat).

The researchers used these factors and orientations to create a four-step personality test to help those on the verge of a transaction to make informed decisions when identifying partnerships best suited for lasting success.

The report aims to give advisors and enterprises a framework to understand their individual and firmwide personality factors to help define their business approach, ask the right questions and zero in on potential blind spots.

For example, an advisory business with an ‘autocrat’ orientation to control may need to find a larger partner that will allow them to run their practice as they see fit, while an advisory business with a ‘coach/guardian’ orientation to passion might want a partner that empowers them to spend more time serving clients.

“While the industry has many avenues to help advisors think through the business considerations of an M&A transaction—from valuation and deal structure to operations—interpersonal compatibility often falls by the wayside,” Hightower CEO Bob Oros said in a press release announcing the white paper. “We hope this study can be an informative resource to enable advisors considering a transition to find the best possible fit for themselves and their teams.

The white paper is available for download here.

Hightower has made seven M&A deals so far in 2020, and says more are planned by year-end. The firm is positioning its white paper as a blueprint for advisor firms seeking to merge with or to acquire other like-minded firms.

Founded in 2008 as a collaborative business model, Hightower is an RIA providing investment, financial and retirement planning services to individuals, foundations and family offices, as well as 401(k) consulting and cash management services to corporations.