Kathleen Kelly

Kathleen Kelly

Underscoring the rapid pace of retirement plan industry merger and acquisition (M&A) activity, several more transactions have taken place so far this year. For one, Compass Financial Partners, in Greensboro, North Carolina, was acquired by Marsh McLennan Agency (MMA), a subsidiary of global firm Marsh McLennan. Kathleen Kelly, managing partner in Compass Financial Partners, shared insights with Managing Editor Judy Faust Hartnett about the team’s acquisition experience.

PLANADVISER: What were your goals for Compass when you were evaluating whether to pursue an acquisition?

Kathleen Kelly: We identified three distinct goals that needed to be met in order to commit to an acquisition; however, I would preface my remarks by saying we’re unique, in that my husband, George Hoyle, and I were sole owners of the company, and we launched Compass prior to even being engaged, so this decision was like selling our baby!

Our first goal to be met was regarding our clients. There needed to be a clear and tangible benefit to them if we were acquired. Secondly, we have always viewed Compass as the “Compass family,” so it needed to be the right move for all of our team members. We wanted them to have an opportunity for professional growth.

Finally, for George and me, we’ve made decisions over the past 20 years by first considering how the decision would affect us, our family’s future and our professional growth, and then by following our gut. For an acquisition to happen, it had to be the right culture with the right people.

PA: Nine months in, has the reality met the expectation?

Kelly: It has exceeded our expectation, especially given that we’ve lived our entire experience affiliated with Marsh during COVID-19. There’s extensive collaboration with other MMA retirement advisers around the country, and we come together as a “volunteer army” to identify and execute on opportunities to improve. It’s been refreshing because the MMA model lets us maintain our entrepreneurial spirit, yet benefit from the size, scale and strength of a global powerhouse.

PA: How has joining MMA enabled your advisory team to broaden and enhance the resources that it can offer plan sponsor clients? Participants?

Kelly: As an industry, we’ve all realized that financial wellness and overall well-being, from not only a financial but also a health and wellness standpoint, has the ability to strengthen organizations and positively influence employee performance.

One advantage of being aligned with the largest insurance broker on the globe is having access to tremendous resources, for instance the MMA Cyber Center of Excellence. Besides [all that we’ve gained within MMA thanks to] employee benefits and business insurance colleagues, the other benefit for us is that Mercer is a business of Marsh McLennan. Mercer has tremendous capabilities that we’ve been able to access at the request of our clients, ranging from global governance best practices, to consulting on IPO [initial public offering] planning, compensation and executive benefits, to OCIO [outsourced chief investment officer] work for sizable pension plans.

Many of our clients are very large, they’re publicly traded, they’re globally domiciled, and, over time, they’ve come to us with needs we couldn’t fill directly because we lacked the resources. Now we have those, which was a huge differentiator relative to other potential acquirers we considered.

PA: How has the acquisition changed the services and support for your advisory team members?

Kelly: We’ve maintained our management structure. Team members who were accustomed to reporting up to another team member haven’t seen a change. I’m one of five who serve on the MMA national strategy team, and almost everyone on our team is involved on a committee, working on national initiatives with peers, which they have enjoyed doing.

“Better Together” is one of MMA’s mottos. That aligns very well with our culture at Compass. We’ve always been focused on getting better, and aligning with MMA lets us get better faster.