January 2021 Issue: Before a Leap of Faith, lay out your Deal-Breakers-Before a Leap of Faith, lay out your Deal-Breakers by Dina Megretskaia

Before a Leap of Faith, lay out your Deal-Breakers by Dina Megretskaia

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In this article, Dina Megretskaia discusses the importance of succession planning in the context of mergers and acquisitions in the wealth management industry. Megretskaia emphasizes the need for both parties to define their terms and understand the difference between a merger and an acquisition. She highlights that a successful merger requires open and honest conversations, and suggests engaging in diverse settings to gain a deeper understanding of each other's goals and values.<br /><br />Megretskaia shares the perspective of a large firm, Modera Wealth Management, which has successfully completed transactions primarily with other NAPFA firms. The CEO, Tom Orecchio, focuses on diversifying the settings for discussions to gain insight into the other firm's goals. Deep conversations and asking questions in multiple ways help uncover the truth and ensure alignment.<br /><br />From the perspective of a small firm, Keatley Wealth Management, which merged with Modera, founder Karen Keatley identified three primary goals: an exit plan for herself, a good home for her clients, and a planning-centric firm committed to fiduciary values for her employees. Keatley also valued the resources and size of Modera in attracting higher-net-worth clients and shifting her focus to value-add activities.<br /><br />Megretskaia emphasizes that a leap of faith is required in any RIA transaction, and success depends on the people involved. The long-term relationship between advisors committed to their clients' success is crucial. Bringing new voices and talent to the firm is a significant consideration in the merger strategy.<br /><br />In conclusion, Megretskaia stresses the importance of succession planning, clear communication, and shared values in achieving a positive outcome in mergers and acquisitions in the wealth management industry.

Keywords

succession planning

mergers and acquisitions

wealth management industry

defining terms

open and honest conversations

NAPFA firms

exit plan

planning-centric firm

attracting higher-net-worth clients

clear communication