Integrating Culture in Successful RIA Mergers and Acquisitions: The Guide for Financial Advisors

By Greg Friedman and Cynthia Greenfield

With organic growth becoming more and more elusive, Mergers and Acquisition (M&A) activity within the RIA industry is at an all-time high. In 2019, RIA merger and acquisition activity accelerated its momentum compared to the halfway point last year, with a strong second quarter that saw 33 deals for a total of 65 for the first six months, according to the DeVoe & Co. Deal Book.

While M&As may seem like “easy” growth for firms, the only easy part may be signing on the dotted line. Maintaining success by merging two firms hinges on a handful of key factors, and one of them is the careful integration of culture.

In Integrating Culture in Successful RIA Mergers and Acquisitions, Greg Friedman, a veteran financial advisor, and Cynthia Greenfield, a leadership and change management coach, share their blueprint for achieving and maintaining a successful, positive work culture, tackling head-on the obstacles that may appear during an M&A event, and offering solutions based on real-world experiences.  This book will show the evolution of a $2B RIA over the course of 10 years, and pull back the covers with real stories of obstacles, adjustments, and victories along the way. 

• Language: English
• Publisher: Palgrave Macmillan
• Release date: Mar 16, 2021
• ISBN: 9783030624446

Book preview

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021

G. Friedman, C. GreenfieldIntegrating Culture in Successful RIA Mergers and Acquisitionshttps://doi.org/10.1007/978-3-030-62444-6_1

1. Understanding and Succeeding at Change Management

Greg Friedman¹   and Cynthia Greenfield¹  

(1)

Private Ocean, San Rafael, CA, USA

Greg Friedman (Corresponding author)

Email: [e-mail]

Cynthia Greenfield

Email: [e-mail]

Greg’s Perspective…

A few years ago, I was on stage in front of several hundred advisors, speaking on the topic of M&A. I opened by asking everyone to raise their hand if any of the following questions applied to them. Are you actively engaging in a merger or acquisition? Are you considering M&A in the future? Have you been approached about participating in an M&A event? At the end, I then asked for those who hadn’t raised their hand. Not one single person in the room raised their hand.

How did we get here, and so quickly? Increasing competition, shrinking margins, slowed organic growth and an aging generation of advisors are all factors in this M&A tidal wave. According to a report by Echelon Partners, 2019 marked a seventh straight record-setting year for M&A activity in the RIA space, with 203 acquisitions [1]. And while M&As may seem like an easy growth or succession strategy for firms, the only easy part may be signing off on the deal.

When Cynthia and I were discussing the outline of this book, walking through the natural steps of a merger or acquisition, we agreed that the first factor to address was our approach to handling change. There are innumerous books available on the topic, from cheese-moving analogies to going from good to great, and leaders across the board have recognized that while the change itself is challenging, it’s how people react to that change at varying levels that causes ripples in stability and productivity.

One thing is for certain: change is the only constant in our lives. Whether we’re prepared or not, change is coming in one form or another—in our personal lives or in our careers. And while we often can’t control what, when or how it happens, we can control our attitude toward the change and let it either stop us from moving forward or help propel us to something better.

For an RIA, M&A is change at its finest. It’s disruptive, no matter how little will actually change to a firm’s structure. No two mergers or acquisitions are the same, and whether you are absorbing one firm into another, merging two firms into a new one or letting one firm continue on as a separate entity, there will always be elements of change that can lead to issues. The information in this chapter may overlap in future stages, but addressing change in the beginning (and keeping that mindset throughout the process) can be a helpful tool to understanding why problems may arise throughout the