ERISApedia.com has begun publishing the Fiduciary Responsibility eSource, a publication which provides guidance for 401(k) and 403(b) plan advisers and sponsors.
Burrmont Compliance Labs LLC announced the rollout of the book,
written by Employee Retirement Income Security Act (ERISA) and former
Internal Revenue Service (IRS) and Labor Department attorney, Charles
Humphrey.
The ERISApedia.com platform, which provides compliance information and retirement industry
materials to sponsors, administrators, attorneys and advisers, allows Humphrey
to update content as developments arise.
“We are very happy to be working with Chuck Humphrey and are
honored he chose to publish his excellent book with us,” says Timothy McCutcheon,
publisher of ERISApedia.com and ERISA attorney. “In addition to publishing his
book, we are exploring adding some of Chuck’s other adviser/sponsor tools to the
ERISApedia.com platform.”
In addition to the Fiduciary Responsibility eSource, ERISApedia.com,
currently offers government and other source material and The Qualified Plan
eSource, a discourse written by McCutcheon for ERISA professionals working with
defined contribution plans. McCutcheon states he is searching for other authors
to publish corresponding content on the website.
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Advisers are aging—and few have a succession plan, or even a grip on how to sell, merge or add to their practice, say the creators of RIA Match Concierge Consulting.
We have a demographic experience where registered investment advisers
(RIAs), on average, are in their mid 50s, sole practitioners, without a succession
plan, says Mary Ann Buchanan, chief executive and founder of RIA Match. “Seventy
percent of advisers have no succession plan, and that’s the basis of what makes
[RIA Match Concierge Consulting] so compelling,” she tells PLANADVISER. “The
need is huge.”
Buying, selling, joining or merging with an advisory firm is
a defining professional moment, points out Kathleen Asack, founder and
principal of AmplifyRIA. “We understand the gravity of that decision and the
impact it will likely have,” she says.
Of the many services and solutions
available for advisers, Asack says, not one ties together all the resources in
a coordinated fashion and also uses algorithmic matching to identify candidates
that the consultant might not have turned up on his own.
In 2012, Buchanan launched
RIA Match, a self-service platform designed to let advisers create their own
profile in about 20 minutes, collecting 72 data points for a match on seven variables. But she found that a
number of advisers asked for more service. “Quite often, the advisers don’t
have the time or comfort level to facilitate the search themselves,” Buchanan says.
“They were reaching out and saying, ‘Could you do this for me?’”
In response, Buchanan and Asack created the
concierge business as an end-to-end matchmaking service for advisers looking to
buy, sell, merge with another firm, join a firm or add positions. Where RIA
Match is more of a Match.com for advisers, RIA Match Concierge Consulting is a
full-service matchmaking resource that provides expert advice and white-glove
service.
Concierge Consulting provides consultants who
guide advisers through a process that helps them clarify their goals and create
an action plan, balancing qualitative criteria and quantitative metrics to find
matches.
Beyond the Numbers
Philosophy and culture are as important
as the numbers, Buchanan believes. “It’s very easy to overlook the importance
of both qualitative and quantitative factors,” she says. “Price valuation and
deal terms are all important, but if the philosophy and culture are misaligned,
the best-crafted deal will likely underperform— if it survives at all.”
A range of considerations need to
be weighed, Asack says, to avoid a practice in which the partners don’t see eye
to eye on the future, strategic vision of the firm or whether to concentrate on
a specific market. “Perhaps they didn’t flesh it out, vet these issues in
advance,” she tells PLANADVISER. The lack of consensus can lead to lost client
relationships, affecting revenue and assets under management, and it might make
it extremely difficult to attract new talent.
According to Buchanan, mismatches
are common, but no one has tracked what deals fail because of philosophy and
culture.
The two decided to put quantifiable
metrics around these less tangible characteristics, Buchanan says, in an
attempt to describe missteps in deals that did not materialize, or that did not
realize the full potential the partners had hoped for. They asked partners what
they wish they had done differently and tracked the top responses.
The first step, Asack says, is helping
the adviser crystalize what he is trying to accomplish, and why. “We have to start
there,” she says. “If he wants to fetch the highest dollar amount possible,
that is OK, but we need to set expectations and embark on a search that would
mirror his goal.”
The adviser who wants something more meaningful than
a simple purchase price needs to detail personalities and qualities: what Asack
calls important personal and professional values. “What is his future vision
for this business?” she asks.
Visualizing the Future
Some may want to create a greater
asset, to maximize or establish a legacy. It’s common to overlook a number of
qualitative attributes when initiating this process, according to Asack. “By
the time you get to the numbers, the deal and the adviser are simply wrapped in
the numbers,” she observes.
Advises need to be able to
visualize where they want to go, Buchanan says. If they don’t identify that, they
are never going to get there. That end vision should include an assessment of
their own value and their place in the future partnership. Do they want to sell
and go, or sell and stay? It is similar to buttoning your shirt, she explains.
If the button hole and the button are not aligned from the start, it’s not going
to look right.
Similar to looking for a date, Asack
recommends that advisers give serious thought to the qualities they seek in an
ideal partner from the perspective of both personality and business. Last, they
must assess the health of their own business. “If there are financials or personnel
changes that need to be addressed, they want to do that in advance,” Asack
says. “They need to be reminded that the one joining is going to be scrutinizing
them.”
Buchanan and Asack offer a combined
tech platform and mergers and acquisitions (M&A) consulting, coupled with a
deep understanding of the complexity of the independent advisory community. The
two maintain their new service provides the expertise and guidance needed for
rewarding and enduring outcomes. The technology supports the scale needed to
host a strong pool of top RIA firms, while consulting experts navigate the
engagement from initial introduction to completion.
Their profiling process can capture
certain elements of a business, to help determine from a pool of candidates those
who specialize in the Employee Retirement Income Security Act (ERISA) or 401(k)
plans. “We’re still using a human to vet and provide insight, but the technology
can sort options,” Asack notes.
The primary compensation is derived
from a success fee after a nominal engagement fee. “We ask them to have some skin
in the game,” Asack explains. “We believe it’s essential for success as it shows
a motivated, engaged candidate.”
RIA Match Concierge Consulting is available to
financial advisers of any size and from any channel. More information about the
service is on the website of RIA
Match.