April 2021 Issue: Potholes in the Road to Growth-Potholes in the Road to Growth by Dan Moisand

Potholes in the Road to Growth by Dan Moisand

Pdf Summary

Mergers and acquisitions (M&A) have become increasingly popular in the RIA (Registered Investment Advisor) community. However, Moisand Fitzgerald Tamayo, a firm that has grown without any acquisitions or hiring advisors with established client bases, believes that it is not necessary to rely on inorganic growth for success. The firm emphasizes the importance of culture in the process of growth. They have had conversations with financial advisors from other firms who are interested in joining them, but these talks often break down because the advisors are looking for a steppingstone rather than a permanent home. They also encounter issues when advisors want to bring their clients with them, violating nonsolicitation agreements. The firm values integrity and does not wish to engage in such practices.<br /><br />On the other hand, Moisand Fitzgerald Tamayo has also been approached by solo practitioners who want to use the firm as their succession plan. However, the firm is cautious about acquiring smaller practices because it wants to preserve its own culture and way of doing things. They are willing to adopt some aspects of the smaller firm's practices but are not interested in completely changing their culture.<br /><br />Similarly, when approached by larger firms for acquisition, Moisand Fitzgerald Tamayo is hesitant because they want to maintain their own culture. They have witnessed other NAPFA member firms selling to larger outfits and observed negative effects on culture and employee work environments. The founders of the firm prioritize the next-generation staff and do not want to leave them behind with a partner who is not committed to their culture.<br /><br />Overall, Moisand Fitzgerald Tamayo believes that it is essential to take the time to court and carefully consider potential opportunities before making any decisions. They are open to mutually beneficial arrangements but prioritize protecting and nurturing their existing culture.

Keywords

Mergers and acquisitions

RIA community

organic growth

culture

financial advisors

steppingstone

nonsolicitation agreements

integrity

succession plan

mutually beneficial arrangements