How M&A is changing financial planning practices

Mergers and acquisitions play a key role in the development and growth of the wealth management industry. With billions of dollars on the table, both buyers and sellers want a mutually beneficial transaction to close quickly and transitions for clients to be implemented smoothly. But success is not always guaranteed.

Here are five stories on recent deals with financial planning practices.

Wealth manager acquires target to bolster tax expertise

Wealth management firm Choreo boosted its tax and accounting credentials and expertise when it acquired accounting firm Cherry Bekaert's registered investment advisor operation, Cherry Bekaert Wealth Management.

"It's a very comfortable fit from a cultural perspective, and it makes all the sense in the world to join with Choreo," Cherry Bekaert interim CEO Brooks Nelson said. "We can serve our clients better and grow faster."

The new strategic partnership is the second high profile deal in recent months for Choreo, which broke off from its accounting parent, RSM, early in 2022.

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New RIA acquirer makes second billion-dollar deal in a month

Warring advisors pursue litigation in deal gone wrong

Fanfare usually accompanies the acquisition of one advisory practice by another, but for Colonial River Wealth Management and Fiduciary Edge Advisors, the deal quickly turned sour.

The transaction unspooled as Devin Garofalo of Colonial River and Jayne Di Vincenzo of Fiduciary Edge accused each other of violating the terms of Colonial River's agreement to buy Fiduciary Edge.

After three years of court and arbitration filings, a FINRA panel found in favor of Di Vincenzo last year, but Garofalo is challenging the decision as well as pursuing a civil case and a separate FINRA arbitration case against Di Vincenzo's former brokerage, Cambridge Investment Research.

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M&A gone astray: Financial advisors fighting in court after parting ways

Top IBD expands branches with latest acquisition

LPL Financial, the nation's No. 1 independent broker-dealer, added an additional 800 advisors to its roster of 21,000 advisors with the acquisition of Financial Resources Group Investment Services in early 2023.

"This acquisition strengthens our relationship with a strategically important client and provides a foundation on which to accelerate expansion of several strategic growth areas, particularly in the financial institution space," said Rich Steinmeier, LPL's divisional president of business development.

In a deal worth more than $140 million, not including undisclosed asset-based earnout payments, LPL will not only acquire Financial Resources' stable of advisors, but also $40 billion in client assets.

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LPL adds more ties to $40B branch with deal to buy the firm

Avantax takes on single wealth management focus

The goal to become "unquestioned leaders in tax-focused wealth management" was the driving force behind Blucora's decision to sell its online tax software unit, TaxAct, and subsequently adopt the name of its wealth management division, Avantax, early this year.

"We're focused on executing great sustainable growth strategies to deliver for our financial professionals and their customers," said CEO Chris Walters, who is targeting expansion through further investment.

But some industry players see challenges ahead for the midsize firm as it takes on larger players in the industry. "Within their swim lane they dominate, but I think it's going to be hard for them to step beyond it," said Louis Diamond, the president of Diamond Consultants.

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Can 'pure-play' wealth manager Avantax compete with the giants?

Acquisitions boost revenue growth for serial acquirer of advisory practices

A raft of 24 M&A deals in 2022, following the purchase of 38 advisory practices in 2021, has helped to offset a challenging year for Focus Financial Partners, adding $21 million alone through two end of year transactions.

The 24 completed or agreed deals comprise five that bring in new partners and 19 that incorporate advisory practices into existing Focus firms through tuck-in deals.

The deals propelled Focus to a new business model. Last month, the publicly traded company said it was going private, selling itself to private equity firm Clayton, Dubilier & Rice.

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Focus going private at valuation of $7 billion