I hate to break this to you, but your financial advisor or investment professional will retire or otherwise decide to move on from his or her business someday. Unless he or she works for a large financial institution (i.e. a big bank, trust company or wire house), it’s likely the firm will be sold to an outside entity. This is especially true today in the era of widespread mergers and acquisitions activity in the wealth management industry.
As a client, that process can be stressful or unnerving and is sure to come with as many questions as answers. Should you stay with the acquiring firm? Or find a new advisor entirely?
Below are a handful of items for you to consider and questions for you to ask of the acquiring firm as you weigh what’s best for you and your family during the transition:
- How is the Acquiring Firm Organized?
- Is the acquiring firm a like-minded small, solo practitioner? A mid-sized registered investment advisory firm? Or a large roll-up firm intent on buying more firms in the area in the immediate future?
- Is the acquiring firm self-funded or backed by private equity money?
- Will my family remain a priority for the acquiring firm if its goal is to grow quickly through acquisitions?
- What is the acquiring firm’s culture like? Is it a bunch of independently run businesses under one roof? Or one, cohesive company?
- Will My Advisor and/or Service Team Continue with the Acquiring Firm?
- For how long?
- In what capacity?
- What Does the Acquiring Firm Believe?
- Does the acquiring firm have the same financial planning and investment philosophy and expertise as my previous advisor?
- Does the acquiring firm specialize in addressing my family’s specific goals or needs?
- Will we be forced into proprietary investment products or high fee offerings such as actively managed mutual funds, annuities, private equity or hedge funds?
- What is the Acquiring Firm’s Service Model?
- Will we continue to receive the same level of white glove service as before?
- Does the acquiring firm have account minimums or other criteria that we currently do not meet? If so, when will these criteria be enacted?
- Will any products or services be discontinued today or should we expect changes in the future?
- Will we continue to meet with our team at the same frequency and cadence as before?
- What is the Acquiring Firm’s Fee Structure?
- Will my fees change today?
- Should I expect that my fees will change in the future? Or are any services expected to be dropped from inclusion in the current fee schedule?
- *Sometimes acquiring firms will keep fee structures the same for an introductory period so they can give the illusion that not much is changing. You will want to ask about plans to change fee schedules in the future and/or drop specific services from inclusion in the current fee schedule.*
- Do you Trust the Acquiring Firm?
- Is the acquiring firm’s vibe similar to the previous firm’s?
- Do they elicit a trustworthy and non-salesy feeling?
This is sure to be a big change for you and your family. If you aren’t feeling great about the acquisition or transition and you have any questions or want a second opinion, please don’t hesitate to contact me directly or schedule a time for us to connect.
Email: Will.Brennan@parkhillfp.com
Schedule a Meeting: Introduction Call