After months of negotiations, Diversified Lifelong Advisors of Wilmington, Del., has acquired RZ Wealth, a financial firm based in Wayne, Pa. The parties involved said the entire deal was consumated through virtual meetings.
The most challenging aspect to the deal has been bringing all of the employees and clients of RZ Wealth, which has taken the Diversified name, onboard at Diversified, Andrew Rosen, president at Diversified, said in a recent interview.
“The employees at Diversified obviously chose where they wanted to work. The employees at RZ Wealth did not have that luxury and they were understandably nervous,” Rosen said. But the two firms are well on the way to achieving the synergy they need, he said.
Diversified had $700 million in AUM before the merger, while RZ Wealth brings $220 million in AUM. The agreement began through an advisory “matchmaking” firm after the owner of RZ Wealth, Irv Rosenzweig, began looking for a successor to take over the business. Diversified, meanwhile, was looking to expand.
The deal closed at the end of 2020. RZ Wealth was more of an investment firm, while Diversified is a full-service financial planning organization, but the frequent comminications showed the two firms had a good cultural fit, Rosen said.
“We have been able to accomplish an almost seamless transition,” he added. Diversified started the acquisition process with another firm earlier, but the deal fell through at the last minute because the two firms did not share the same missions, Rosen said.
“We learned from our mistakes, so this deal went much more smoothly,” Rosen said.
The offices of Diversified and RZ Wealth are physically located about 45 minutes from each other. Rosen said virtual meetings helped the process because they encouraged him and other staff members to resolve issues faster than they might have if they were traveling to meetings.
Diversified established a regular Thursday morning meeting for staffers. Part of the process is to have a new member from RZ Wealth and a staff member from Diversified partner with each other just to chat. In this way, the two staffs get comfortable with each other, Rosen said.
“The employees at RZ Wealth are going to be important in our growth strategy going forward,” he said.
Rosen said his best advice to other firms considering a virtual acquisition or merger is to be patient. The legal process and melding the two firms culturally takes months. Now that one deal has been accomplished, additional acquisitions are part of the firm’s growth strategy, he added.