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DealQuest’s BEST OF Leading Women in the RIA Industry

This week we bring to you a BEST OF episode. You’ll get to hear from some of the leading women in the RIA industry! Lisa Rapuano, Mindy Diamond, and Mary Ann Buchanon shared a wealth of knowledge. Listen in, and prepare to take notes!

Meet Lisa Rapuano

When Lisa Rapuano was twenty-five years old, she managed to talk her way into an investment management position. A startup in Chapel Hill, NC hired her, and her interest in investments grew. The experience she gained at FSP unearthed a new passion for investment research, which quickly became her focus and paved the way for her future as a business leader.

A Market-Cooperative Business Model

Today, Lisa serves as the CFO of Facet Wealth. This is an RIA that focuses on people with less than a million dollars in investable assets. Their niche encompasses thirty-three million American households that have between $100k-$1M in investable financial assets.

She describes Facet Wealth’s business model as market-cooperative. That’s because they are driven by highly efficient, back-end technology that enables their financial advisors to provide a holistic customer experience to lower net worth clients. As a result, peripheral partnerships are developed with other RIAs that focus on more complex investment strategies.

Deals are a driving force behind Facet Wealth’s success. There are two primary types that they use to generate growth. The first is a referral partnership, where Facet pays for referrals if the prospective RIA partner signs a solicitation agreement with them. This offers Facet’s RIA partners a way to continually serve the segmented clients, while also freeing up capacity and resources to focus on their niche.

The second way is a revenue replacement opportunity. This is also a sequential deal where Facet signs an asset purchase agreement with an RIA to acquire certain of their client relationship. In these deals, Facet will agree to terms for how long the RIA’s revenue will be replaced after the client transitions to Facet. This provides a great home for their smaller clients as the RIA seller focuses on their larger clients.

Learn more about Facet Wealth, Lisa Rapuano, and RIA deals here.

Meet Mindy Diamond

Mindy Diamond is the CEO and founder of Diamond Consultants. She specializes in recruiting and placing financial advisors. Through Mindy’s work in the wealth management field, she has helped facilitate numerous deals between buyers and sellers. She is a true expert at identifying potential deals for her clients. In addition, she is excellent at identifying weak points when the deal partners aren’t a good match.

The Best Deals Require the Best Partners
In our interview, Mindy and I talked about what differentiates a good deal from a bad one. Mindy shares her strategies for identifying when a buyer is ready to buy. She also shares her thoughts on the ever-evolving financial advisor field. A facilitator like Mindy can simplify the sometimes confusing process of finding and closing a deal. She’s a powerful asset to have in your corner!

One of the major changes Mindy has identified in recent years is the industry’s move toward independence. Although this creates more possibilities and avenues for deal-making, it has also served to complicate the process. There are many more things to consider when structuring a deal now than there were ten years ago. Finding the right partner is critical. It’s a growing challenge with the ever-wider buffet of options available.

It is also important to look at the bigger picture. A deal can have immediate benefits, but sour over time. By looking past the instant gratification, you can get a better sense of how your deal will affect you in the long term. That long-term approach is an important aspect of the evaluation process; an experienced consultant like Mindy can help you with that process.

Learn more about Diamond Consultants, Mindy Diamond, and RIA deals here.

Meet Mary Ann Buchanan

Mary Ann is the CEO and co-founder of RIA Match. This is a service that helps pair RIA firm and practice buyers and sellers. Her company has more than five thousand clients all over the nation. Mary Ann is experienced in connecting her clients with the right deal partners. She truly understands why the numbers don’t always tell the full story. Mary Ann helps her client firms look past the financial appeal of a deal in order to see the many other important key factors that need to be considered.

RIA Matchmaking

During our interview, I spoke with Mary Ann about the role culture plays in making a good match between deal partners. We discuss some of the deals Mary Ann has made in her own business that have helped RIA Match accelerate its growth. She also shares some surprising statistics about the RIA industry. We were able to discuss the work her company does for its clients in areas like succession planning, mergers and acquisitions. She is truly an expert in the art and science of matching the right deal partners.

Mary Ann also gave a fantastic checklist of considerations and data points that RIA Match examines. This is a phenomenal list to keep in mind when you’re looking for your own deals. Consider things like geographic location, number of clients, what technology is being used, and what sort of growth trajectory you are looking for. Each of these come into play as things potential deal partner may want to know about your organization. That means these are things that you should consider to help evaluate if a deal is the right one for you.

Learn more about RIA Match, Mary Ann Buchanon, and RIA deals here.

Corey Kupfer is an expert strategist, negotiator and dealmaker. He has more than 30 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author and professional speaker who is passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.

If you want to find out if you’re an authentic negotiator, take the Authentic Negotiating Success Quiz today!

Authentic Deal-Making

Evolving With the RIA Industry

From an early age, David Selig was exposed to financial advisory because his father was a thirty-five year veteran of the stock exchange. But, after a significant life event took place that essentially forced his father to retire on the spot, Selig was inspired to pave his own way and help others avoid falling into a similar fate with no succession plan.

Before his interview with Pershing in New Jersey, Selig truthfully didn’t know what an RIA was, but despite mispronouncing the term and pulling terminology out of thin air to sound well-read, he landed the job. As Selig began his journey, he became familiarized with the world of RIAs, its opportunities, and its challenges. The RIA industry is extremely fragmented and there is a lot of difficulty surrounding the fundamental concepts of expansion, succession and scale, but Selig learned to navigate them while acquiring valuable lessons to take into the next chapter.

The Formation of Advice Dynamics Partners

After Selig left Pershing, he ended up in a consulting role for one of the industry’s largest aggregators, and the nine-month project forced a shift in mindset that would lead Selig to entrepreneurship. He liked the aggregator’s business model and the work he was doing, but he was faced with a huge window of opportunity that he couldn’t ignore. Selig started to look at the aggregator as his first client instead of his employer and was hungry for more; eventually, Selig would found Advice Dynamics Partners, where he is currently CEO.

The Evolution of the RIA Industry

At Advice Dynamics Partners, Selig has been focused on M&A advisory and succession planning from day one, and is approaching the eleven-year mark with undeniable success. Part of the reason for that it ADP’s ability to evolve in alignment with the evolution of the RIA industry. The statistics surrounding companies that have a viable succession plan has not necessarily changed during Advice Dynamics Partners’ lifespan, but what has changed is the number of options those businesses have in forging a succession partnership. The options for monetizing a business has expanded far beyond the banks and NFPs to include things like private equity firms with short or mid-duration investment timelines. In addition to bespoke M&A advisory, ADP has a specialty in helping large wealth managers navigate the complexities of evaluating financial sponsors to find the right permanent capital partner.

The buyer landscape has also evolved and afforded RIAs more choices, but with more complexity comes more challenges. Nevertheless, ADP’s job is to help their clients navigate the different options so they can articulate their value and choose the best partner for their business; the industry may have evolved but ADP’s fundamental function has just been adapted to match the changes.

There are a lot more options for external succession nowadays, but internal succession is extremely high on the menu for most advisors and their clients. However, there is a major gap as approximately 80% of businesses would prefer an internal succession plan while only 20% have the ability to carry it out. In order for internal succession to work, businesses need to have certain things in place such as the ability for the parties involved to compromise. There is always a tension between buyers and sellers when it is an internal context and the price becomes an issue, but it is still a lot easier to finance now than it was before.

Doing Deals in the RIA Industry

Aside from succession, there are some exciting things happening in the deal space of the RIA industry. A lot of entrepreneurial firms with younger management teams are seeking an outside partner to buy them and help them achieve scale. These deals are more attractive now because it is no longer a binary choice. Outside partners can enable these firms to achieve succession, growth, and scale while helping them accomplish their long-term vision. There are at least fifteen options in the investor category, and ironically, it is a lot more common for investors to prefer a lower-risk minority stake nowadays. The industry has matured as a whole, and it has been mutually beneficial for both the management team and the partner because the management can run the business with financial backing that will help them reach the next level.

Listen to David Selig’s interview on the Fueling Deals podcast episode.

Corey Kupfer is an expert strategist, negotiator and dealmaker with more than 30 years of professional deal-making and negotiating experience. He is a successful entrepreneur, attorney, consultant, author and professional speaker. He is also the creator and host of the Fueling Deals Podcast.

If you want to find out if you’re an authentic negotiator, take the Authentic Negotiating Success Quiz today!