Are Advisors Ignoring Mergers?

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Many advisors would greatly benefit from scale yet are hamstrung by the very temperament that led to their success in the first place.

That was the premise behind a highly successful television show four decades ago:

“If you have a problem, if no one else can help, and if you can find them, maybe you can hire the A-Team.” Grew up in the 1980s? Then you remember the A-Team: Hannibal, Face, Murdock and of course B.A. Baracus (Mr. T!). Each team member had a specific skill that acted as a ”force multiplier,” allowing their team of four to defeat more numerous enemies… which they did on a weekly basis for five seasons! It was a classic case of 1 + 1 = 3.

What business wouldn’t like that math?

Yet in the financial planning profession, most advisors are solo acts – akin to Rambo. Partnerships are common but are often formed at the beginning of advisors’ careers when safety in numbers is a good survival tactic.

Today’s headlines are awash with news of hundreds of firms acquiring and being acquired, but we don’t hear much about mergers. In fact, I have heard it said, cynically, that there’s no such thing as a merger, only an acquisition without one side knowing it. If a successful partnership or merger could achieve scale more quickly and reliably, why are proper mergers among advisors so rare?