RIAs are continuing on a growth trajectory despite events this year, presenting incredible opportunities for advisors and firm owners, according to David Welling, CEO of Mercer Advisors, a national advisory firm based in Denver.

“The growth prospects right now are the best that they have ever been in our industry,” Welling said during a keynote presentation at the DeVoe & Company M&A and Succession Summit yesterday. “Mercer has undergone significant growth in the last decade, both organic and as an integrator of other firms.

“Growth is healthy for the culture at Mercer,” he added. “We have a lot of leaders and advisors who are in their 40s and they want challenges; growth provides that. But we don’t have to beat any other firm to win. We just have to provide better services so that new clients find their way to us. True scale provides operational leverage” for the growing firm.

Ben Harrison, managing partner and head of advisory services at BNY Mellon/Pershing, who moderated the session, explained, “The firms that had the scale to be able to have teams to divide the firms’ duties are doing better during the pandemic.”

When Mercer is looking for firms to buy, it is looking for a fully articulated succession plan, including plans for clients and leadership, as well as the financials of the deal, Welling said.

A successful integration of two firms, whether through a merger or an acquisition, first requires a deep conversation between the two sides to determine what the firms want to accomplish. “Both sides have to be clear on their long-term goals. Otherwise you will have irreconcilable differences during the process,” Welling said.

The selling firm has to have a good story to tell about why the firm is worth buying and what it can add to the acquirer. “If you are selling, tell the buyer who the talent is on your team. Make the buyer fall in love with your firm,” he said. “Mercer looks at the selling firm through the lenses of strategy, culture and finances, and we look for financial planning shops, not just wealth management firms. Mercer is big enough to have dedicated teams for the different phases of an integration.”

The two leaders said their firms also are focusing on improving diversity at Mercer Advisors and at BNY Mellon/Pershing. The firms have programs to increase the diversity of advisors and of clients and have pro bono programs to serve lower-income families in need of advice.

“The industry is not where it needs to be on these issues and we cannot stand still,” Welling said.