4 Musts When Merging Practices

by | Apr 9, 2018 | Blog

Matchmaking is as tricky in our professional lives as it is in our personal lives. For financial advisors, when you find the right match, there are plenty of benefits to experience from merging businesses including the ability to lower costs, gain valuable human capital, service, and technology resources and make it much easier to grow.

So what makes merging advisory practices so tricky? There are many pitfalls concerning poor communication, culture wars, unrealistic expectations, and poor execution. While dating another firm might be exciting, here’s what you’ll want to consider and accomplish before walking down the merger aisle.

COMMUNICATE, COMMUNICATE, COMMUNICATE– There is much to communicate during a merger and to various parties. Work out a communication plan in advance for both staff and clients. You’ll want to describe the objectives of the merger, the benefits to both firms, the process for merging, and what is required from all to make it successful. Your communication plan should allow for ample opportunities for everyone to be informed before, during and long after the merger is final.

RESPECT CULTURE – Firms, like families, are unique in themselves. Each firm has their values, practices, attachments, and personalities. Respecting each firm’s identity, as you work to meld a new one is critical. When faced with obstacles rooted in cultural difference, it’s important to remember that different doesn’t mean less than and your way is not necessarily better. Different just means different.

SET REALISTIC EXPECTATIONS – With so many mergers resulting in unmet expectations, make sure firm goals are defined and include short and long-term priorities. Identify in advance how each goal is to be measured. Stay focused on the positive and be sure to celebrate each success along the way.

HIRE AN EXPERT – Third party expertise, specializing in advisory practice mergers, can significantly increase your odds of a successful merger. An experienced merger and acquisitions expert, one who knows of current opportunities, as well as, established routes for helping firms align, can ensure a successful, and satisfying merger for all parties involved. A consulting firm with a local presence can provide you with even greater insight.

Despite the obstacles, the financial benefits of merging make it appealing to many firms looking to grow but prefer not to do it alone.

If you are interested in exploring other growth strategies for your practice, download our free whitepaper, How to Grow Now: Growth Strategies for Proactive Advisors Who Want to Increase Their Revenue in 2018.

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