Diversified’s Mergers and Acquisitions
Over the past year and a half or so you’ve all sat witness to Diversified opening new offices through a few mergers and acquisitions. I know we try to communicate all this exciting news as best we can. That said, as the President of Diversified, I thought it is prudent to share a little more about our intent as I’m sure questions swirl around in your head.
Early on this journey, we swore to you we would always stay completely transparent in our partnership. We see our relationship with one another as one part friendship and one part partnership. Being that is the case I want to always stay true to our word as continually you put your trust and faith in us, we must do the same with those most important to us.
In understanding the purpose, I feel it is most prudent to first understand where we’ve been, and what our vision has become.
In 2010, when I began here, we were a company of 6 that was a trailblazer in the financial planning arena. Our predecessor, Frank Levy, was an early adopter and believer in basing a financial planning relationship on, well, financial planning. This created the backbone of our company well before my arrival. From that point on we started growing at a pretty rapid rate organically. David, Kyle, and I swore we would keep this foundational bedrock as we grew Diversified.
As Frank retired, and we took on the direction of Diversified, there were a few key principles we promised ourselves to never waiver from. First, client communication would always be at the forefront of everything we do. We are nothing without our clients and owe them to always remain transparent and communicative in good times and bad. Next, not only did we want great client communication, but in addition, we wanted the experience of our beloved clients to be second to none. We felt these are two things we can always control and owe to everyone we are honored to work with.
Finally, as we began to grow and outgrow our current office location, it was apparent to us what needed to be built. We wanted to have a company in the image of what we would want if we were clients. The best way we saw that happening is by striving to be that one-stop-shop and deliver everything we can under one roof. Our clients’ lives are busy and hectic, if we can help coordinate and deliver everything they need to live their best lives, man, that would be a win. So off we went on our journey, which brings us to the present day.
When we first made the decision, thanks greatly in part to our CEO Mike Fisher who is tasked with making our dreams a reality, to go down this growth through mergers and acquisitions it was a scary one. That said it was obvious that we would only do a deal if it was a win, win, win, win. A win for the other company, a win for our company, a win for our clients, and a win for their clients. Let me take a moment to break down each one of these.
A win for other companies–
Deals are like snowflakes in that no two are alike. Our first venture down this lane was with Irv and the gang at RZ Wealth in Wayne, PA. This was a great opportunity for them. For Irv the owner, it allowed him the infrastructure to offload a lot of the work that was preventing him from living his best life. He was working nonstop and it was not healthy. It provided him the ability to focus on what he most enjoyed in this business while having a quality of life.
For the rest of the staff, it gave them built-in infrastructure so they can grow their lives and careers while putting all their focus into being the best advisors they can be. Throughout the lengthy getting-to-know-you process that we take with each seller, we get a feel for if that company, and their staff, would be a good fit for our own core values, and how they may fit into our own company picture. We strongly believe in having the right people in the right seats, and we want to make sure that if we do bring on another company with their staff, they each find the right seat at the table at Diversified.
For Alabama, it was a very similar win for the staff, with the seller Jeanne being able to have peace of mind, as she transitioned into her retirement years, that her clients would be with a firm that can tend to their needs and have similar values and convictions as she did. Again, a win for them! In both these situations it has been a great win for them, and hopefully more to follow in the coming months.
A win for other company’s clients–
I hate saying other companies’ clients, as we are now all one big family. That said it gives some context so let’s roll with it. The win for our new clients is continued core values and an increase in value. Since we tend to be a larger company than those we do deals with, we get to bring in the infrastructure they need. We have clearly defined departments dedicated to each part of their clients’ lives (marketing, operations, investing, etc).
In addition, we have a tax firm, and insurance firm and are continually trying to build that client-centric company. Simply put, we have resources that others don’t. We hope if you fall into this category, you have already started to experience some of these benefits.
A win for us–
There are a few key wins for us here at Diversified. For starters, we only do deals with fantastic people whom we feel are thought leaders in the industry. This may start to shed some light on why places like Alabama made so much sense to us. You see the world is shrinking and if we feel there is a deal to be had that can help us be better, with great people, show us where to sign. In both deals we’ve done; the owners and employees have already helped us tremendously in our vision and resources.
The other key win for us besides great people is other resources for our vision. Taking the revenue of two, three, four, five, etc companies and combining them allows us to cut out overlap in expenses. Thus, we can grow faster, with more revenue to invest right back into our company and vision. This is how we were able to buy two accounting firms, and have a few other tricks up our sleeve in the near term. Essentially, it speeds up our ability to make due on our promise of delivering what I believe is the best value in the industry.
A win for our existing clients–
We see no real downside for our existing clients. These M&A deals are critical in our ability to bring to market what we truly feel is the best experience in the marketplace in a timely manner. Since we began this journey, we’ve already added critical resources to our investment team, operations team, and marketing team (with more exciting hires planned). Hopefully, you’ve already seen the increase in value in these areas and we have only just begun.
On top of that, as I mentioned before, it has been a huge catalyst in our ability to add these additional services to our clients, like taxes. The beauty to all this is our clients get the same attention they always had, with simply more resources. I WANT TO STRESS THAT THESE DEALS DO NOT AFFECT ONE BIT WHO YOUR ADVISOR IS OR THEIR ABILITY TO GIVE YOU THE ATTENTION YOU NEED. DAVID, KYLE, and I haven’t taken on one new relationship due to any deals we have done.
What’s the downside?
I got asked this question by one of my favorite clients and friends the other day. It was a great question and gave me pause as I wanted to give a thoughtful answer. As I thought it through here was my response. The downside is we are growing quickly and forging ahead into uncharted territory. What we envision building there is no roadmap for and will come with some growing pains. We can stay the status quo, which I refuse to do as delivering anything but the best is unacceptable to me. Or we can innovate and stay cutting edge. In doing so, there will certainly be learning curves, mistakes, and growing pains.
For instance, we know this tax year wasn’t completely as smooth as we would have liked it. That said, all I can ask is to stay patient, as I and the rest of our leadership team will not rest until we get it 100% right. So that is the downside of being along this journey with us. Our hearts and intention are in the right place, that said we will break a few eggs to make an omelet so please bear with us. We are not doing these things selfishly, as it is quite the contrary. We appreciate not only your patience but also your feedback as it is for you, we do these things.
I am truly humbled by our growth and firmly believe it is because of the key principles mentioned above. There is the upside and the downside to innovation and growth as we see it. I assure you we never take any of it or you for granted no matter how big or small we get on this journey. We will stay resolute in our vision to always put the focus on the client’s value, experience, and communication. It is for you not for us we do these things as I simply can’t rest until I know we’ve delivered on this promise.
Thanks, from the bottom of our hearts for putting your faith in us, you will not regret it! Stay wealthy, healthy, and happy.
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