In our last article, entitled Exit planning: Building your own retirement plans, we highlighted three reasons why most financial advisory merger and acquisition plans fail. Having no clearly planned, stated and executable strategy was the first, followed by incompatible culture and philosophies and unrealistic expectations.

Most acquisitions are strategic, allowing a buyer to acquire a competitor’s practice to obtain clients or expertise in a particular market niche or to enter a new geographic market with an established business name and operational base. Having a solid strategy and understanding your criteria for identifying and selecting potential candidates before starting your search will enable you to move quickly when you find the right candidate.

To help develop that strategy, there is a roadmap you can follow:

1. Create your overall merger and acquisition plan.

  1. Consider how a merger, sale or acquisition will assist in accelerating your business and personal objectives.
  2. Develop a prospecting plan that provides the right balance of lead flow to identify potential buyers or sellers, and confidentiality. Leads will come by way of advertising and other lead generation processes, but before they are considered to be a potential candidate, qualifications and characteristics must be evaluated, using your selection criteria. Given the confidential nature of many selection criteria points, advisors should be prepared to sign a non-disclosure agreement to protect confidential information that is not known to the general public.

2. Develop a clear profile of your potential candidate—your potential partner.

Finding the right partner is important for any successful merger or acquisition. To do so, you must clearly define and carefully evaluate your potential partner’s characteristics in the early prospecting stages by:

  1. Determining what characteristics are most important to you.
  2. Identifying criteria to help you screen out inappropriate candidates. Criteria considerations should include:
    • Ethics
    • Background
    • Personality
    • Education, licenses and designations

3. Clearly define which book or practice characteristics are important in both businesses, and just how important each characteristic is to you.


  • Billing models
  • Client base profile
  • Fee structures
  • Investment philosophy
  • Practice location and longevity
  • Price
  • AUM

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