The pandemic has pushed advisors who were thinking of buying or selling a firm to get off the fence, and mergers and acquisitions—which already were growing in number—will jump dramatically in the future, according to a panel of advisory industry leaders.
“The coronavirus negatively affected the financial industry briefly, but we have had a rapid recovery,” said Peter Mallouk, president of Creative Planning, an independent wealth management firm and RIA based in Overland Park, Kan.
“It made advisors realize that if they were considering exiting the business in the next few years, they need to think about doing it now," he said. "From the other side, buyers are back, and we will see more activity in the next few months.”
He added that he wants "total integration" from firms looking to join Creative Planning. "For firms that do not want that, there are a lot of other options out there,” he said.
Mallouk was part of a panel discussion on Wednesday sponsored by JConnelly, a public relations and consulting firm.
“The pandemic was a real wake up call,” agreed Ron Carson, founder and CEO of the Carson Group, a family of financial firms based in Omaha, Neb. “It will make M&A accelerate. I am surprised we have not seen more already.”
Firms that want to join the Carson Group need to have the same culture, he added. “Anything else we need to match can be done later” if the cultures mesh.
The Carson Group has 15 deals in play right now, which is an increase over 2019, Carson noted.
Bob Oros, CEO of Hightower Advisors based in Chicago, said advisors recently have been questioning whether they want to continue to go it alone or want a partner of some sort. "Going it alone is hard during painful times like last spring,” he said.
Oros noted that when Hightower evaluates firms that want to join the Hightower platform it makes sure they have thought about their succession plans. And he added that Hightower looks for firms that work as a team and share the wealth with all members.