Consider one of Private Ocean’s purchases from last year: its October 1 acquisition of Norm Boone’s San Francisco Bay Area firm, Mosaic Financial Partners.
Friedman had known Boone for decades. They were both advisors who had at some point found themselves running software companies.
“Greg and I have known each other from both the RIA world and the software-vendor world,” says Boone, a Harvard MBA who co-founded IPS AdvisorPro, an investment policy statement software company, with his wife, planner Linda Lubitz Boone. They sold it in 2013.
Because of his long association with Boone, Friedman knew many of Mosaic’s staff members. So Boone and his trio of lieutenants came aboard Private Ocean as principals: They include Kevin Gahagan, who had been a Mosaic shareholder, and Channing Hussey and Sabrina Lowell, who had not been.
“The three of them together were a really important part of helping Mosaic become what it was,” Boone says, “and part of my role as the seller was to advocate about their importance.”
Boone is 71, and part of the reason he sold is that he wanted to exit the business. He had helmed Mosaic since founding it in 1987, sat atop the industry as a Financial Planning Association board member in the early 2000s and served on advisory boards to major service providers to the advisory industry. It was time to move on.
But an internal succession plan at Mosaic failed to come to fruition, and the only way forward was for him to sell. Fortunately, he had some idea what Mosaic was worth since he had discussed merging it or selling it to outsiders over the years. It’s something you need to be willing to think of immediately after you launch a firm, Boone says.
He also knew what made a firm like his attractive to others, and he fashioned Mosaic accordingly.
To create a strong staff, he maintained a budget for employee training and development. He took the time to mentor, too. Beyond talent, RIA buyers want a crisp operation.
“We had our procedures tied down really well,” says Boone. “That made it relatively easy for a buyer to be able to envision taking the engine that we were and putting it into their shell.”