Sponsored by:



5 Keys to Successful M&A


  • Several trends are driving RIA mergers and acquisitions.
  • In a seller’s market, buyers must position themselves as attractive business partners.
  • M&A success depends on operational efficiencies.
  • Creating a digital capacity for onboarding and workflow automation is fundamental to an outstanding client experience.
  • To attract and close deals, buyers must articulate a clear value proposition and message to sellers.


As registered investment advisors (RIAs) grow older, the number of industry mergers and acquisitions is increasing like never before. For opportunistic firms, M&A activity has become a key growth strategy.


However, maintaining client loyalty and cultural compatibility are critical for merger success. Professional buyers are looking to technology to improve operational efficiencies, bolster value propositions, and create smooth onboarding processes for acquired clients and staff.


In our recent webinar, Tim Welsh (Nexus Strategy LLC), Linda Ding (Laserfiche), and Matt Sonnen (PFI Advisors), discussed how buyers can leverage technology to make their firms more attractive to selling advisors. Read the summary below, download a PDF or watch the webinar.


click presenter image to see bio

Webinar : 5 Keys to Successful M&A

According to a recent Wealth Management survey, RIA mergers and acquisitions are hitting record numbers as the growing population of aging business owners are getting ready for their golden years. In our recent webinar you’ll hear industry veterans discuss key strategies to create business synergies and profits via M&A deal making.

Five trends contributing to the surge in RIA mergers and acquisitions.

1. Aging Advisors
The average age of RIA owners is approaching 60. With more advisors over 80 than under age 30, it’s not surprising that 40% of owners are looking to retire in the next 10 years.

2. Regulatory Pressures
Fiduciary requirements are increasing and the asset management industry is squeezing out of excess basis points.

3. Fee Compression
A 2017 Fidelity Benchmarking Study found that 60% of advisors are routinely discounting their fees by 20 to 30 basis points to attract and retain clients.

4. Robot Competition
Increasingly, wealth management tasks are being automated. This is affecting advisors’ businesses. The volume of robo assets could grow dramatically by 2024. (see figure 1.)

5. Client Expectations
Client experience (CX) matters. Amazon.com’s service levels have increased customer expectations in all industries, including wealth management. Pershing has found that firms focusing on CX are growing five times faster than those that are not.


Figure 1. Robot Competition

“Thanks to industry consolidation, growing advisors can turbocharge their assets under management. In addition, M&A provides opportunities for exiting advisors to find a good home for their clients.”

– Tim Welsh, CFP, President, Nexus Strategy, LLC

In a seller’s market, buyers must position themselves as attractive business partners.

Dan Seivert, the CEO of ECHELON Partners, recently noted, “There should be a lot more deals being done. However, there are a lot of bad buyers out there.” In a seller’s market, buyers must work harder. Acquiring firms must evolve from ill-equipped buyers to proven partners.


Characteristics of attractive buyers include:

  • A clear value proposition
  • Technology and operational expertise
  • A multi-disciplined leadership team
  • Management capacity for deals
  • A transparent compensation structure
  • A strong, well-defined culture
  • Transition support which includes staff for onboarding new clients

M&A success depends on operational efficiencies.

Acquiring firms need a proven infrastructure that selling advisors can confidently plug into. Buyers must convince selling advisors that all of the heavy lifting associated with running a business will be taken care of for them. Sellers want to focus on clients rather than day-to-day operational activities.

M&A Through the Operational Lens

Advisory firms need top-tier technology infrastructure to support growth through M&A. A recent survey by Wealth Management reports that nearly one in four advisors expects to be part of a merger or acquisition within the next two years. And over the next decade, 55 percent of advisors expect the pace of consolidation to continue — and even grow.


Survey Highlights

Keys to M&A Success

Advisors identified the most important technologies and processes for a smooth M&A experience. Their top choices were client communications, workflow management, and new account management processes.

Client communications
Workflow management
New account management process
Document management

Tech Tools for Efficient M&A

Advisors weight in on the technologies they’d most want during a merger or acquisition. Workflow automation or document management technologies topped the list.

Workflow automation
Document management
Client communications
Electronic signature

Creating a digital capacity for onboarding and workflow automation is fundamental to an outstanding client experience.

Firms create a digital capacity by investing in client-facing and onboarding technologies. Better digital capacity translates into smooth and transparent communications with new clients. This generates business value, since high levels of client trust and goodwill are correlated with client retention. The objective for M&A participants is to efficiently transition clients to the new firm.


Five steps required to create a digital capacity are:




Client information must be transformed into digital form.


In this step, client data is standardized so it can be shared among different systems. Bulk transfer is often a major pain point.


The goal of automation is to minimize the number of manual tasks.


Streamlining extends process automation to complex procedures. Laserfiche’s Forms Magic, for example, can tie CRM, digital signature, and forms systems together seamlessly and intuitively.


The advanced phase of the digital transformation process is to achieve innovation through business intelligence and analytics.

The first two steps form the foundation for efficient handling of information assets.

“By investing in client-facing and onboarding technologies, buyers can efficiently transition clients to the new firm during an M&A deal.”

– Linda Ding, Director of Strategic Marketing, Laserfiche

To attract and close deals, buyers must articulate a clear value proposition and message to sellers.

Professional buyers convey a powerful benefit message that is easily understandable to selling advisors and that appeals to their long-term future and continuity goals. Further actions to strengthen a buyer’s value proposition are:

Differentiate your “advisor pitch” from your “client pitch
Selling advisors must feel that their clients will receive better service, better technology, and access to more investment opportunities after the merger.
Map out your digital strategy
Evaluate what tools are available.
Audit your IT system
Bring in an objective firm that can identify gaps and opportunities in the existing IT infrastructure. It may be possible to retrofit some systems, rather than buying all new ones.
Plan ahead
Consider whether the firm has the infrastructure and people in place to simplify life for a selling advisor. Key capabilities include onboarding, HR, compliance, technology, marketing, and trading.

“One of the biggest mistakes buyers make is expecting the seller to impress them. There are 10 to 15 buyers vying for every seller. In this environment, it’s up to the buyers to impress the selling advisors.”

– Matt Sonnen, Founder & CEO PFI Advisors

Another Important Point

Differences Between RIA and Wirehouse Acquisition

Wirehouse acquisitions. When making a wirehouse acquisition, firms must address real estate issues, such as finding office space for new staff. In addition, wirehouse advisors typically focus on production credits, while RIAs focus on revenues. The “exchange rate” between production credits and RIA revenue is rarely one-to-one. New clients acquired from a wirehouse deal will also require “repapering” (i.e., signing new paperwork) after the transition.

Learn more about Laserfiche and how their software helps manage content, automate process and inform strategic decision-making to enable people & organizations to do more of the work that matters.

Start typing and press Enter to search