When it’s time to buy…How to maximize your acquisition


Getting the most out of what you bought

You’re in growth mode. You’re unstoppable. You’re part of the growing trend in the financial services industry of acquiring smaller RIAs to build your “mega-RIA.” And you’ve only just begun…

If you’re in the business to buy businesses, you probably have this acquisition thing down. But if you’re just beginning the process, head this advice: Business acquisitions are not for the faint of heart.

Comparatively, the rise in popularity of HGTV led many inexperienced “flippers” to believe that they had what it took to turn a quick profit out of a home remodel. Most quickly realized that owning a home is much different than flipping a home.

The same can be said to be true for business owners—building a financial planning practice is much different than acquiring one, only to merge it into your already successful firm. Assimilating the employees and clients with “your way of doing business” does come with challenges. However, as they say in real estate, “if the bones are good” and you’re ready to do the work, the results of a business acquisition can be rewarding.

So, for those just starting their journey as an acquirer-of-businesses, you will experience bumps. The goal is to minimize them. For financial planning practices specifically, and for owners who want to unify an acquisition under their already established brands, here are a few tips to help make the brand transition as unchallenging as possible.

  1. Co-brand to rebrand.

The objective with an acquisition of a financial planning practice is to acquire the clients and assets. Any sudden changes will cause concern, and client concern can lead to a mass exodus of assets—immediately devaluing the company you just purchased. Put a brand transition strategy in place that eventually leads to the acquired firm name being minimized greatly or dissolved completely, but gradually over time. The typical timeline for a brand transition in this space is about a year; however, I have seen firms effectively complete this brand transition process in as little as six months and as much as two years. A general rule of thumb, slow and steady wins the race when it comes to a brand transition. Consider a co-brand of the two companies—yours and the one you’re acquired—before rebranding completely. Ease your customers into the transition.

To put this in a real-world context, remember the brand Cingular? In 2006 it was acquired by AT&T and maintained the co-brand strategy of “Cingular… The new AT&T” for several months, until its clients and marketplace clearly recognized the brand transition. AT&T carried some of the visual brand elements of Cingular into a fresh look for the company, too. This was an effective co-brand to rebrand strategy.

  1. Information needs to flow like a river.

Information needs to flow in the proper order, starting at the top and quickly flowing all the way downstream to everyone and anyone who needs to know. Before you start communicating, understand positioning. Yes, you’ve heard it—start with why? What is the benefit of this brand transition to all your key players? What do your new clients need to here? “This transition illustrates the expanded services and resources now available to clients of the firm.”What do your employees need to here? What about your prospects, community, vendors, wholesalers, referral partners, media and similar? Sometimes it’s the same message, other times it’s a variation of that message.

Again, another plan, this time communications-driven, needs to be in place to account for and coordinate communication with all key players. This includes who to contact, how, what they need to know and when they need to find out.

Draw four columns on a piece of paper and follow these directions:
Brand Transition Communication Strategy, AdvisorPR

  • put “why” on the top of the sheet – why did you buy this company (the non-self-serving reason)
  • put “who” to tell in column 1 – segmenting clients by A, B, C is appropriate here for planning purposes
  • put “how” you will tell them in column 2 – is it a meeting, phone call, press release, letter?
  • put “what” to say in column 3 – what do they need to hear to be comfortable in the transition. How can you position this change as a benefit to them? Some “who’s” need more expansive reasoning than others.
  • put “when” in column 4 – this can be the date or the order of communication

This should give you some semblance of a messaging strategy for what to say to who, how and when. Having this strategy will be essential for maintaining control over the message with your key audiences.

  1. “Just enough” time and support from the previous owner.

How you structure the acquisition to meet your needs is up to you—some want the previous owner out as quickly as possible, others want 1 year, others want 5 years. An acquisition strategy can differ based on the situation; a succession strategy is different than a pure growth strategy, for example. However, I’m assuming you the reader wants to grow and assimilate the new brand into your brand as quickly as possible. Then go for the Goldilocks of previous owner’s involvement—move too fast and it looks like a “fire sale” and can create alarm. Too slowly, and there is no urgency for established clients to start working with the new team. Plus, you start to run into the “too many cooks in the kitchen” scenario that can create disconnect and dissatisfaction with the clients. While this isn’t as much a marketing suggestion as it is an operations suggestion, decisions such as these do impact the brand perception. Don’t let an acquisition draw out too long and dilute your brand equity. Think about the TV show you loved once, and then it kept going and going and going until the point of no return—what used to be great became a casualty of its own success. Be the Seinfeld of financial planning acquisitions. Get things as good as they can possibly get with the previous owner still in the picture, and then get them out of your way.

Buy, transition, repeat.

Considering selling your practice? Check out my blog for maximizing your brand equity in your financial firm!

For help along the way, consider AdvisorPR your trusted brand transition communications specialist. Happy acquiring!

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