Talking Points: When a growing firm decides it's time to make the next move

Pershing's Mark Tibergien discusses the challenegs and benefits with mergeres and acquisitions

Sep 26, 2012 @ 10:12 am

By

The following is excerpted from “Unlocking Profitability: Key Differentiators of the Most Successful Advisory Firms,” a webcast that was sponsored by Pershing Advisor Solutions. Kelli Cruz, director of research and consulting for IN Adviser Solutions, was joined by Mark Tibergien, chief executive of Pershing Advisor Solutions. The following points were made by Mr. Tibergien.

On mergers and acquisitions:

M&A activity is increasing, but what we're seeing is adviser-upon-adviser mergers and acquisitions rather than selling to consolidators. The firms need to get to critical mass, so merging or acquisition is a way to do that. Every adviser that uses Pershing has said merging is something that they would consider doing.

On the challenges of M&A:

Sellers have been deluded into thinking their practices are worth more than they are. This can create disruption in the marketplace because you're dealing with people who are emotional about the transaction. [Another thing] is, they look at the numbers and forget about the cultural factor that needs to be considered [in a merger].

On whether M&A activity will grow

As the need for professional management increases, the trend toward M&A will increase. I don't think of it as an exit strategy but a growth strategy. Advisers see this as being more beneficial to them, and how transformative it can be for their business, by offloading some things to other people or by sharing part of their business.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

What top advisers are doing to stay ahead of the curve

Top advisers understand that they need to work outside the box and focus on generational reach. Susan Kay of MFS Fund Distributors, Inc. explains.

Latest news & opinion

Jay Clayton says SEC, DOL can give market 'clarity' on fiduciary rule

Chief regulator is confident two agencies could reach 'common ground' on an investment advice standard across all accounts.

Vanguard winning at bond inflows, too

But iShares is strong competition.

Sen. Gary Peters brings broker background to work every day on Capitol Hill

Michigan Democrat resists ripping up DOL fiduciary rule but would be open to some changes.

DOL fiduciary rule causing DC-plan record keepers to change business with insurance agents

Principal has communicated that independent agents must change their business models to keep receiving compensation.

DOL fiduciary rule opponents want to push implementation back until 2019

ICI, Chamber of Commerce among groups asking for delay, while Democratic lawmakers call on DOL to keep to its earlier planned schedule of Jan. 1, 2018.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print