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Advisors in Transition

The Art of Change begins with The Science of Commitment

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If you’ve been in the RIA space for at least the last 3 years, you have probably heard it.  “I want to grow inorganically.”  Said another way, an RIA business owner is stating that s/he would like to grow by acquiring or merging with another firm or perhaps by recruiting a financial advisor with an existing book of business.  Having facilitated the process of putting entities together a number of times, there’s a perplexing commonality I’ve noticed.  Many would-be Buyers don’t anticipate any significant change within their firm or themselves should an acquisition or addition happen.  Other than economic metrics and the labor-intensive period to assimilate a transition, most Principals seem to expect, and WANT, business as usual.  Really?

“Our dilemma is that we hate change and love it at the same time; what we really want is for things to remain the same but get better.”
~Sydney J. Harris

Sydney Harris was a columnist for the Chicago Daily News and Chicago Sun Times dating back to 1944.  His popular quote about change crystallizes the irony I’m speaking of:  A Buyer becomes engrossed in the immediate benefit of an acquisition or addition which is net growth.  Admittedly, that part of change is fun.  What’s often overlooked is the internal change that could, and arguably should, occur to maximize the opportunity for all parties.  And that effort?  Well, not so fun.  It requires Commitment

Are you a Buyer?  If so, embarking on a merger and acquisition strategy doesn’t mean starting over when the “one” comes along.  Instead, acknowledge that if you are successful in your inorganic growth endeavor that in fact your firm will be changed.  So develop a Commitment to Change plan before you begin.  Identify all the numerous elements associated with your firm, your offering and your culture.  Commit to philosophies, values, client promises, processes and results that are absolutely non-negotiable.  Everything else? Be open-minded and flexible.  A successful transaction is a wonderful opportunity to infuse not only new clients, assets and revenues into your firm, but new people, skills, experiences and perspective.

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