It has now become commonplace to identify consolidation in the financial advisory industry as a trend of the present and a growing trend of the future. Countless articles and studies point to the rise in merger and acquisition activity; and the actual numbers do seem to support the hype. While we agree with these general observations, we are increasingly concerned about the rationale supporting some of these transactions.
Our sense is that many firms on the acquiring side may end up pursuing mergers and acquisitions because of the above trend. They want to be part of what is happening in the industry, and they want to accumulate size and assets in order to remain relevant. Otherwise, they may find themselves being merged into or acquired by another firm, which they view negatively. Yet, in approaching mergers from a defensive posture, they may miss the philosophy underlying the mergers that ultimately are most successful.
As lifelong learners, we view mergers as opportunities, first and foremost, to improve. In other words, we pursue merger opportunities that will make each firm better than we were as separate firms. We simplistically call this our “better than before” philosophy.
Just like other firms that have successfully pursued mergers, when we evaluate an opportunity, we make sure that there are financial opportunities for both parties. We also make sure that there is a cultural fit and that our merger partners share our commitments to: putting clients first as fiduciaries; delivering customized and holistic solutions for our clients; and attracting, developing, engaging, and retaining top talent. Yet, our discipline ultimately is centered on a singular threshold question: “Will they help us be better than before, and will we help them be better than before?”
How have mergers made us better than before? Here are some examples.
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Our first merger in 2012 increased our scale in Boston and strengthened our ability to serve attorneys and other professionals as clients. It simultaneously enhanced our expertise in utilizing separate account managers, mutual funds and third-party research consultants.
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A 2013 merger afforded us immediate access to the New York metro markets and enriched our existing platform for serving corporate executives. Simultaneously, it brought us greater multi-family office capabilities, along with more comprehensive solutions for some of our largest clients. It also bolstered our expertise surrounding, and platform for, alternative investment opportunities. On the technology front, we ultimately concluded that the New York office had the better solution for financial planning software, and we adopted it firm wide soon after our merger.
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A 2014 transaction brought us even further scale in the Boston area, but it also deepened our expertise and capabilities in quantitative research as well as environmental, social and governance investing.
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The addition of a team in 2015 introduced an experienced institutional consulting practice serving foundations, endowments and other institutions around the country. It also enabled us to establish an office location in Virginia, through which we could serve institutional and private clients.
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Our most recent merger in 2017 introduced a premier sports and entertainment practice to our company as well as expanding our geographic presence to the Rocky Mountain region.