Three Steps to Take When Your BD Has Been Acquired

M&A activity in the advisor space has reached a feverish pace of late, leaving many advisors who are part of a firm being acquired with a critical question: “Do I go to the acquiring firm, or do I explore other options?”

While the tendency may be for an advisor to think they must, or should, go as part of the package, the reality is the acquisition may have created a significant inflection point in his or her career.

Such opportunities are arising with increasing frequency. For example, LP Financial just acquired Crown Capital Securities $6.5 billion of advisory and brokerage assets. Expected to close in early 2024, 260 financial advisors now face the aforementioned question. Another example was CAPTRUST Financial Advisors stated intention to buy Southern Wealth Management, which manages more than $2.3 billion in assets and employs 62 advisors. The SWM acquisition was CAPTRUST’s third deal in Texas this year, emphasizing a trend that shows no sign of abating.

In a statement about the LP Financial acquisition, Phyllis Paulsen, executive vice president of Crown Capital said what many other firms and their advisors must feel when being acquired. “This was an emotional and very personal decision for the firm.” She did add that she feels LPL was the “ideal choice to help our advisors take their businesses to the next level in the future.”

That may be true. But Crown Capital’s advisors shouldn’t take Paulsen’s word for it. And that’s the point.

“There are three things Crown Capital and SWM advisors should be doing right now,” said Chris Stacey, the COO of 3xEquity, the industry leader in facilitating career transitions within the wealth management space. “They should be weighing the advantage and disadvantages of the move, and not necessarily taking leadership word for it. They should be assessing their own wants/needs/goals in order to determine if this move aligns with their own goals. Finally, they should be getting offers from other firms. We offer a proprietary tool on the 3xEquity web site, which allows them to anonymously field lucrative offers.”

The bottom line is advisors and other employees at a firm being acquired have an opportunity. Take advantage of it.

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