Recently, Carson Group founder Ron Carson was featured on InvestmentNews TV to discuss the massive disruption about to hit the financial services industry. He likened the pressing concerns to four busses speeding towards advisors, namely regulatory rulings, emerging technologies, fully valued markets, and demographic trend. Firms that are unprepared for the impact of these busses are likely to be flattened and forgotten.

One piece of advice he gave to overcome the oncoming traffic is to enter partnerships that will strengthen your ability to respond to the changing landscape of our profession. This struck an immediate chord with me, since many of my recent calls with members have centered on determining the right time and right circumstances for a merger or acquisition. Joining forces with another practice often seems like a natural, practical way to anticipate and manage what’s ahead in 2017 and beyond.

But, before they put more bodies into the intersection, I caution my members to consider the challenges of bringing two different teams together. In the best cases, the results mimic the Brady Bunch – a happy, blended family. Sometimes, however, collisions occur because leaders fail to weave the two businesses into one identity with a singular mission and vision. When this happens, your reasons for merging become null and void as it creates extra work and additional casualties when the busses finally collide.

Luckily, this result can be avoided if advisors address the root of all behaviors and actions prior to melding. Beginning a discussion about how the separate, existing cultures will contribute to the new culture of the combined team can help you control the outcome and avoid a hazardous situation. If you think a merger or acquisition may be in your future, make culture a major factor in your decision.

Clarify Your Current Culture

The first step to successfully integrating two cultures is to dig out the magnifying glass and closely examine your own culture. While it may be tempting to throw together a list of your ideal cultural traits, a vital part of this process is for you and your team to be honest. What values do you champion and genuinely follow through on? What values do you strive to emulate, but occasionally fall short?

Encourage your stakeholders to play a part in this important task. By sending them a list of questions regarding current culture and setting up a meeting to discuss their feedback, you’ll not only get the realistic viewpoint from the individuals who live the culture each day, you’ll also inspire early buy-in. These could include, but are not limited to:

  • Leadership – What kind of behaviors does your leader reinforce? How would you describe your leader to a friend?
  • Organizational – Are you empowered to make decisions on your own? What do the systems in place say about your team?
  • Practices – How do you bring new workers into the fold? Do policies tie into your mission?
  • Environmental – What impression do you want to give a first-time client? How formal or informal is the staff?
  • Communication – How frequent, transparent, and receptive is communication within and outside of the company?

Give your stakeholders a couple weeks to gather their thoughts before you convene to collect their input. Together, determine your present state using examples from everyday operations and pinpoint the values that are essential to maintaining good relationships and to facilitating growth. Armed with a clear idea of your own culture, you’ll be able to conclude if a potential partner’s culture is in alignment.

Discover Similarities and Differences

Merging with or acquiring a partner is a lot like getting married. The more work you do before walking down the aisle, the more likely you are to remain in a blissful union. When coaching my members through this phase, I emphasize, in addition to coordinating client profiles and minimum investable assets, you need to sit down as leaders and decide if your cultures are harmonious.

Ask your potential partner to do the same exercise with their team to identify their unique values. Once you’ve each invested time to conduct your individual evaluations, continue the conversation with one another. You’ll want to talk about the ways in which your cultures are alike and, inevitably, the ways in which they differ. Go beyond high level ideas and talk about what that truly “looks” like in your business. Does “exemplary client service” mean you have a certain amount of touches and events per year? Does “proactive communication” mean weekly, monthly, or quarterly calls and reviews?

It should become clear whether moving forward with a merger or acquisition is beneficial to both parties. The relationship may require compromise, but no one advisor should completely abandon their values in the process of creating a shared mission and vision. This will lead to discontent and frustration among stakeholders after the honeymoon has ended.

Present a United Front

Having reached the conclusion a merger or acquisition is the best path, your next challenge is to begin the cultural transition. A great way to kick start this stage is to host a retreat where you can bring both teams up to speed at once.

Culture is a living, breathing thing, and, as such, people expect it to evolve. Leaders can capitalize on this by positively presenting a unified culture that properly balances what was and what will be and by providing reasoning for this direction. Although the new mission and vision start at the top with the new partners, it is imperative you discuss and be flexible with the reactions received from the team and amend the mission and vision if needed. Buy-in is critical before a merger or acquisition because the team will be on the front lines of carrying out your values in day-to-day interactions.

After the papers are signed and the move has been made, cultural fusion should remain high on the priority list. Revisit it in team meetings, celebrate those who are making strides, and coach up or coach out those who aren’t. The success of your merger or acquisition depends heavily on your dual leadership and your ability to promote a cohesive culture.

facebook twitter linkedin mail print
Share Post: facebook twitter linkedin mail print
Recent Posts

Jeffrey Levine: A Future-Focused Approach to Tax Planning

By: Jamie Hopkins
Effective tax planning requires a big-picture approach to reduce a client's tax bill over their whole life. That's the view of Jeffrey Levine, Chief Planning Officer at Buckingham Wealth …

The Essential Guide to Financial Advisor Software

By: Andrew Rogers
Today's investor is reaping the benefits of digital transformation in their personal and business life. Increasingly, they expect their financial advisor to leverage the latest digital tools, too, and …

Ed Slott: How Taxes Can Kill Retirement Dreams

By: Jamie Hopkins
Taxes are the biggest challenge for investors approaching retirement, says Ed Slott, Founder and President of Ed Slott and Company, Professor at The American College of Financial Services and …

Marguerita Cheng: Retirement Planning is Personal

By: Jamie Hopkins
The retirement planning work of Marguerita (Rita) Cheng, CFP®, CEO at Blue Ocean Global Wealth, is inspired by lessons from her parents. With a large age gap between them, …
1 2 3 114