If you want to get a view into what is driving the RIA industry, then all you have to do is hang out
for a few days at the SS&C Deliver
Conference, which was held earlier this
fall in steamy Orlando, Florida. SS&C
is a global behemoth of financial technology, having grown rapidly through
acquisitions, most notably of the popular Black Diamond and Advent Software
portfolio management systems — used
by thousands of RIAs on a daily basis to
run their businesses.
Accordingly, SS&C attracts a diverse
group of advisors, vendors, executives
and industry experts all focused on
how to leverage technology to enhance
the client experience that advisors
deliver, as well as drive operational
efficiencies, productivity and scale so
that RIAs can continue on their impressive growth curves.
Particularly as RIAs are fueling their
growth through inorganic channels,
such as mergers and acquisitions, the
conference featured a seminal panel dis-
cussion on the state of the market, valu-
ations, deal structures and strategies to
become “better buyers.”
Providing some compelling statistics
that show the direction of deal-mak-
ing, Francine Miltenberger, managing
director for DeVoe &Co., demonstrated
that the industry is on pace for a record
number of deals, as advisor demo-
graphics are driving consolidation.
Aging advisors create both a challenge
and an opportunity in the industry,
particularly for the thorny topic of suc-
cession planning.
“At the lower end of the market,
smaller advisors do not have anyone
internally that they can sell the business
to, while at the top end of the market,
valuations are so high that the next gen-
eration of advisor simply can’t afford to
buy out the founders,” she noted.
This situation is creating powerful
momentum for the external sale of busi-
nesses, in which retiring founders pass
the baton to new owners, and is lead-
ing to record deal volumes and high
valuations in what everyone agrees is “a
seller’s market.”
This frenzied pace is being led by
RIAs acquiring each other, as 55% of
recent buyers of RIAs have been other
RIAs, and over half of RIAs now expect
to make an acquisition in the next few
years.
Agreeing with this assessment, Jim
Kacic, CFO for MAI Capital, is positioning his firm to capitalize on these
transitions by becoming an active buyer.
Kacic’s advice to the crowd on how to
become a buyer of choice was: have a
compelling value proposition for transi-
tioning advisors, understand the nuanc-
es of due diligence and stay disciplined
by not paying too much.
Rounding out the panel was Jill Young,
executive director of LourdMurray, an
RIA in Beverly Hills, California. Young’s
back-office focus is particularly impor-
tant for post-deal integrations.
Currently, she is managing a couple
of transactions, which she says brings
added complexity if they involve different tech systems. “The work really
begins once the documents are signed,”
she said, adding that she is leveraging
her Black Diamond system to onboard
the firms they acquire.
REDESIGNING THE BUSINESS
Other compelling sessions were led
by the Black Diamond team, including
Bjorn Widerstedt, VP, Product Strategy
and Design. Widerstedt is known for
his thought-provoking sessions, and he
delivered again this year with his hour
INDUSTRY INSIGHTS
By Tim Welsh
Technology, M&A in Focus at SS&C Event
The annual conference showcased advice on dealmaking, keeping up with
the latest trends, meeting client expectations and improving brain power.
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Patrick Sharp (right), former Chicago Blackhawk star, Stanley Cup winner and Olympic gold
medal champ, was interviewed by SS&C Chairman & CEO Bill Stone at the event.
