Fidelity Institutional Wealth Services, a division of Fidelity Investments, has launched a service to assist RIAs to execute mergers and acquisitions (M&A). The platform includes education regarding M&A strategies, connections to firms that are looking to purchase or be acquired, as well as access to financing. "While many RIAs are interested in M&A, the pace of deals has not been commensurate with the interest we've seen from advisors," said David Canter, executive vice president and head of practice management and consulting at Fidelity Institutional Wealth Services. "We believe that is largely due to the lack of organizational focus, tools and third-party support needed to facilitate M&A -- so we've designed a program that combines those factors with the financing needed to implement a deal." Fidelity has entered into a strategic alliance with Live Oak Bank provide to provide financing of up to $5 million for firm purchases as well as for internal succession plans and breakaways. The consolidation of the industry helps firms achieve scale, which can significantly reduce costs, according to Cerulli research. Firms with access to capital, either via private equity or a banking relationship, are leading the transactions in the industry.
"We believe that to be high-performing, a firm needs to continually re-evaluate its existing business model against its goals to stay competitive," Canter says. "This offering was built to address the understanding that many high-performing firms evolve and are looking to build their businesses through M&A. Our goal is to help firm leaders craft and execute strategic M&A programs -- from planning to financing a deal -- and ensure they're using a "one plus one equals three" model, where firms become stronger through M&A." The program will offer M&A workshops for RIAs, as well as a third-party owned and operated website that matches financial advisors who want to buy, sell, merge or join practices.