Integration Or Indigestion? Making It Work After The Deal Closes
Firms Often Acquire First Then Plan How To Integrate, Which Leads To ‘Indigestion.’ My Quarterly Review Of Wealth Management M&A Explores This Trend With Experts From Lone Willow, Great Hill Partners And Coldstream.
Wealth Solutions Report 12/26/24 (Written by Larry Roth, Co-Founder of Ascentix)
M&A provides many benefits to the wealth management space. It assists firms in gaining access to technology and other support that saves advisors time, streamlines their work, and improves client experience. It provides tools for the succession planning of an advisor population nearing retirement, and allows advisors to monetize their business while providing future care for their clients. In addition, private equity firms and other capital sources provide more than capital – they consult and guide their acquirees for growth and success.
But M&A isn’t perfect, and this year I have been speaking about an unfolding trend in wealth management M&A: Firms often make acquisitions before fully developing a plan to integrate the acquired firms. I call this “indigestion,” and believe acquirers and capital providers can overcome it when they find themselves in this situation, though it may require taking a breather from rapid acquisition to fill in the gaps on the drawing board for harmonizing entities under the corporate umbrella.