Named an InvestmentNews 5-Star Technology 2026 winner, Darby explains how Alaris uses buyer data and AI to measure compatibility and create more targeted matches between buyers and sellers. By moving beyond the traditional auction-style process, his approach focuses on measurable compatibility and stronger alignment to help set deals up for success.
Watch the full interview to hear Darby discuss how AI could reshape the future of RIA M&A.
[00:00] Allen Darby: I think I would probably bet a little bit more on it impacts the valuations negatively because you're operating much less efficiently than we are. We're going to have to rightsize you.
[00:17] James Burton: Congratulations to Allaris Acquisitions on being named an Investment News Five-Star Technology 2026 award winner. Today we're joined by founder and CEO Allen Darby to discuss how better data is changing the way RIAs approach acquisitions, partnerships, and succession planning. Allen, it's great to have you with us.
[00:37] Allen Darby: Thank you, James. I'm looking forward to it.
[00:39] James Burton: Brilliant. Brilliant. Now, before founding Allaris, what frustrations with the traditional sellside process convinced you there was room for a different approach?
[00:49] Allen Darby: Yeah, it's a great question. Prior to, I was a buyer adviser for United Capital. So I was the individual who sort of launched their outbound M&A effort to find partners who were aligned culturally, let's say, to the United Capital model. And my partner Jacqueline Martinez, my partner today at Allaris, Jacine Martinez was the head analyst at United and she was responsible for handling all of the sellside advisory produced opportunities for United.
[01:23] I was sort of the buyer adviser, self-sourcing opportunities and she was dealing with inbound opportunities on the sell side through investment bankers and M&A advisors. She was constantly complaining about the auction style process that they were asked to participate in. For those who don't know, the auction mechanism is the dominant pathway to partnership that's used by the industry.
[01:58] Essentially the M&A adviser, after working with their client to onboard them, get all their data, get them deal ready let's say, the way they go to market is to invite a very large number of buyers to a process. When I say large, maybe 20, 30, as many as 50 buyers get invited with no real attempt to measure compatibility between the parties.
[02:33] It's simply get the buyers in the process and have them bid, make an offer after review of their information. They haven't interacted with the seller. They haven't really met them or tried to determine if it would be a fit. It's just review of their information and the offer. She thought it was just a horrible way of matchmaking because United was very serious about finding a partner that was culturally aligned.
[03:03] So that was the thing that dominated the industry. I thought, let's start a sellside advisory business that had a different approach to matchmaking that actually attempted to measure compatibility between our client, the seller, and the buyer before we invited the buyer to the process. That's sort of the big idea behind it, to be a sellside adviser but use a much different process to matchmake, if you will.
[03:12] Many firms rely on broad buyer lists and personal networks when matching sellers. How does Lens change that process and what insights does it surface that advisers might otherwise miss?
[03:24] Allen Darby: Yeah. It's a great question too. Lens is our technology. Think of it like Match.com but between businesses as opposed to individuals, businesses in wealth management. What we've done that, to my knowledge, no one else has attempted to do is capture the buyer data.
[03:57] All the buyers, we have over 80, maybe close to 90 now that are on the roster. The buyers aren't clients of ours. They're merely agreeing to share their data with us. Every buyer goes through, I would say, a 20 to 30 hour process. They're answering a large number of questions that we have about their business structure, organization chart, client experience, investment philosophy, how they articulate their value proposition to a potential seller.
[04:37] We capture the reasons they would give a seller for joining them, how they're going to improve their life and the lives of their clients. It's their deal structure, how they price, their points of alignment, what they're going to ask you to do, change, or adopt if you were to join them. It's this massive amount of data. We go onsite, spend a day in their office, and record videos with their leadership and department heads.
[05:01] It's this massive amount of data that changes weekly and monthly, so we have to manage it. What it does is it allows us to measure points of compatibility. When we bring a seller through the process and organize all of their data, we've asked them what they're seeking in a partner, what decision-making they want to keep versus divest, and what they want their life to look like on the other side.
[05:34] We're not trying to measure culture. Culture is what people talk about, but it's subjective. It's really a feeling after you interact with people that can only be gleaned through spending time together. We're trying to measure compatibility, which is objective. For example, if you said, "I want to have Charles Schwab as a custodian," well, does the buyer have Charles Schwab as a custodian? That's objectively measurable.
[06:01] You can take that baseline and go much further. Maybe you want to retain portfolio management responsibility after joining another firm. That's a much deeper contextual answer, but it's still objectively measurable. Does the buyer require you to adopt their portfolio management process or will they let you continue?
[06:28] Lens takes all of those hundreds of points of compatibility, many of which are very contextual, and measures fit between two parties. It allows us to take this massive universe of buyers and shrink it down to a much smaller curated list based on compatibility.
[06:53] You can't do that as a human. There are too many points of inference to maintain. We tried to do it before we had AI to help us sift through all these points of inference. It's virtually impossible. I could perhaps do it as I did for United Capital as a single buyer representative because I knew everything about United. I couldn't do that on 80 or 90 buyers. There's just too much information.
[07:20] AI really helps us do that. That's what Lens does. It helps us take this massive amount of data and reason to a fit between two parties.
[07:23] James Burton: Great. Thank you. Thanks for that. Price gets the headlines, but many deals succeed or fail because of less tangible factors. How do you evaluate whether a buyer and seller are actually a long-term fit?
[07:36] Allen Darby: The first part is that we want to have two parties spend significant time with one another to measure culture. Start at the top. The thing that the buyer and seller will often say is the most important aspect of a deal is cultural fit.
[08:03] They may mean different things by that, but let's boil it down to a simplistic statement that they both mean they want to be happy on the other side of the transaction. Let's define that as cultural fit. You can't measure that upfront. That's a subjective thing that can only be determined by spending time together.
[08:30] It's like dating someone. I can tell you on paper this person checks all of your boxes, but that doesn't mean you're going to like them. You actually spend time with them and can say, "This person checked all my boxes on paper, but I actually can't stand them." That's true with cultural fit too.
[08:50] But you can measure compatibility. If you want a partner that has Charles Schwab as a custodian, is evidence-based in investment philosophy, uses a specific financial planning software, offers tax preparation services, has a strong Gen 2 training and mentorship program, and can help you grow through custodial referral programs, those are all points of compatibility.
[09:30] I can measure that. When people say they want a cultural fit, I tell them you can't measure that, you can only experience it. If you don't have a way of shrinking the buyer pool, you'll end up trying to date people that ultimately aren't a fit based on compatibility. What we should first do is measure compatibility. That's objective.
[10:00] That's what we're trying to do. I'm not trying to measure culture. I want them to spend time with the buyers. But I can shrink the universe to only the ones they should be talking to first based on compatibility.
[10:15] James Burton: That's great. Listen, you've kind of answered a bit of this question, but I'd love to get a bit more context from you. You've now advised on more than 100 acquisitions with no post-close breakups. The dating and relationship analogy was a good one there. What have those transactions taught you about what actually makes an acquisition successful after the deal is signed?
[10:38] Allen Darby: Without beating a dead horse, what makes it successful is maximizing the potential for post-acquisition success. You can't guarantee it. Two parties come together like a marriage, and that is a good analogy because that's exactly what this is.
[11:00] When a smaller firm joins a larger firm, they're joining their family. Their team is coming, their clients are coming, and all are going to be impacted by this. Things go wrong, just as they do in a marriage. You can't guarantee happiness, but what I can do is increase the odds of happiness by only inviting firms to a process that should be there based on compatibility.
[11:36] Once we do that, we've shrunk the field. In our process, we're typically only going to invite three to five buyers. In an auction, you might have 30, 40, or 50 buyers. In our process, there are only three to five. What that allows you to do is spend time with one another.
[12:01] By running a smaller process, it opens the window to interact with these people. That's the second real thing to do. Once we've curated the buyer list and formally launched the process, we facilitate multiple points of interaction between our client and the buyers to see if we can get to that subjective cultural vibe.
[12:33] I use the word vibe intentionally because that's really what it is. You know why you're talking to this person based on compatibility, but you've got to have multiple points of interaction. We promote that. That's another thing that's somewhat different.
[12:53] Most M&A advisors serve as a gatekeeper between the parties. The way they manage their process is very controlling. They don't want the buyer to call their client or see their client without permission. I want to do the opposite. I want to see the buyers pursue our clients. I want to get out of the way.
[13:21] The buyers in our process don't need our permission to go see our client, call them, or do whatever they need to do to get to that point of conviction, which can only happen by interacting. That's the second way to increase the odds of post-acquisition happiness.
[13:45] Once we've measured compatibility, let these people interact together. Facilitate interactions to see if both sides can get to that subjective point of falling in love, let's say. If you do those two things, measure compatibility and drive substantial interaction, you really increase the odds of being happy on the other side.
[14:15] James Burton: Great stuff. Thank you. My last question, as more RIAs look towards succession, consolidation, and strategic partnerships over the next few years, how do you see technology changing the expectations that buyers and sellers bring into a transaction, and where does Lens fit into that future?
[14:34] Allen Darby: That's a really loaded question, James, because right now that's the major topic that everyone is trying to figure out, us included, which is the impact of AI on M&A. It's sort of to be determined. I can actually make an argument for either scenario.
[15:01] One scenario is AI really improves M&A opportunities because of the ability to drive scale, profitability, and better metrics in a practice. For example, today an average adviser supports somewhere between 80 and 120 clients. When AI is fully baked into these businesses, we expect that number to go up quite a bit.
[15:26] The average adviser might be able to support 200 client relationships with no impact to client service. In fact, client service would go up. No impact to the adviser having to work more hours. That's a very nice potential outcome. More clients per adviser means more profitability, and that could potentially enhance valuations in M&A.
[15:51] I could also point to another scenario using the exact same logic. It's the buyers who are investing in AI, not the sellers. Sellers typically might have a Claude instance or ChatGPT, but that's not what I mean by integrating AI. Buyers are investing tens of millions of dollars into this.
[16:19] They're the ones driving improvements in the KPIs we're tracking. The question becomes: if the buyer's average client-to-adviser ratio was 200 and the seller was 100, the buyer could say, "Well, you're overstaffed." If we're going to acquire you, we're basically going to take a hit to our profitability because you're operating at a much less efficient level than we are.
[16:50] That's just one data point. I could see an argument where the buyer says, "Because you're operating much less efficiently than we are, we're going to have to rightsize you." That might take two to three years where we're operating less profitably than we were before.
[17:19] How will that express itself? I can see it expressing itself in a lower valuation. That is a story that's yet to be told. We expect AI to change things. I just don't know exactly how. If I were betting, I think I would probably bet a little bit more on it impacting valuations negatively, but who knows?
[17:28] Lens, and what we're doing with Lens, I don't expect will really impact M&A activity or M&A valuations. It's just going to facilitate matchmaking and cultural fit much more effectively as we automate the entire deal process. We call it digitizing the deal team.
[17:54] That's really just going to make the whole M&A process much more efficient, which is good for both sides of the equation.
[18:01] James Burton: Brilliant. Brilliant. Great stuff. Thank you so much for that. Allen, thank you for joining us and sharing your perspective on how technology and data are helping advisers approach M&A with greater confidence. Thanks so much for your time today.
[18:14] Allen Darby: Absolutely, James. It was a pleasure.
[18:16] James Burton: One final thing for me to say is congratulations again to Allaris Acquisitions on being named an Investment News Five-Star Technology 2026 award winner.
[18:26] Thank you. It was awesome. We're very proud of it.
