WEBVTT - Dave Welling on What Financial Services Should Look Like 0:00:02.200 --> 0:00:06.800 This is Master's in Business with very Ridholts on Bloomberg Radio. 0:00:07.200 --> 0:00:09.640 This weekend. On the podcast, I have a special guest. 0:00:10.080 --> 0:00:12.799 His name is Dave Welling and he is the CEO 0:00:12.960 --> 0:00:16.919 of Mercer Advisors. Dave is a fascinating guy who has 0:00:17.120 --> 0:00:23.120 really a very interesting career path through everything from consulting 0:00:23.160 --> 0:00:27.680 to private equity to technology all the way into the 0:00:27.720 --> 0:00:32.600 financial services business. He brings a very different perspective to 0:00:32.680 --> 0:00:36.599 that industry. He never was an advisor, but he has 0:00:36.640 --> 0:00:40.800 worked in and around financial services his whole career, and 0:00:40.800 --> 0:00:44.280 and that really gives him a unique perspective. He has 0:00:44.360 --> 0:00:49.360 done quite an amazing job building Mercer from a seven 0:00:49.760 --> 0:00:53.040 or nine billion dollar shop to a twenty one plus 0:00:53.080 --> 0:00:56.400 billion dollar shop, one of the fastest growing firms in 0:00:56.440 --> 0:01:00.520 the industry. Um I forgot to mention and during our 0:01:00.560 --> 0:01:05.720 conversation that he was named CEO of the Year by 0:01:05.720 --> 0:01:09.840 one of the financial magazines. He comes to us with 0:01:10.240 --> 0:01:16.320 just a very straightforward, honest perspective about what the financial 0:01:16.319 --> 0:01:19.520 services should be doing to both take care of its 0:01:19.600 --> 0:01:23.160 clients and employees, but as well as being a force 0:01:23.680 --> 0:01:26.520 for good in the world. I found this to be 0:01:26.800 --> 0:01:30.759 a fascinating conversation, and I expect you will also with 0:01:30.800 --> 0:01:35.319 no further ado. My conversation with Mercer Advisors Dave Wellen 0:01:36.640 --> 0:01:41.240 vis is Masters in Business with Barry Ridholts on Bloomberg Radio. 0:01:41.720 --> 0:01:44.959 My special guest this week is Dave Welling. He is 0:01:45.080 --> 0:01:49.120 the CEO of Mercer Advisors, a Denver based r i 0:01:49.200 --> 0:01:52.720 A with four hundred employees and over twenty one billion 0:01:52.760 --> 0:01:58.400 dollars in assets under management. Dave Welling, Welcome to Bloomberg. 0:01:58.600 --> 0:02:00.880 Barry is great to be here, looking forward to it. 0:02:01.200 --> 0:02:04.440 So you have a really interesting job history that I 0:02:04.520 --> 0:02:07.200 want to discuss before we start getting into the details 0:02:07.240 --> 0:02:10.360 of Welling. You were at Adventance, you were Black Diamond, 0:02:10.440 --> 0:02:13.240 Charles Schwab Banning Company. Tell us a little bit about 0:02:13.280 --> 0:02:16.760 your career path. Sure, so, yeah, I think as you're 0:02:16.760 --> 0:02:19.920 getting that very um maybe not the traditional head of 0:02:19.919 --> 0:02:22.679 an advisory firm because I didn't start as an advisor, 0:02:22.800 --> 0:02:24.840 but I spent close to the last thirty years of 0:02:24.919 --> 0:02:28.280 my life supporting, enabling, and as I call it, clearing 0:02:28.280 --> 0:02:31.480 the path for advisors. So I was very, very fortunate 0:02:31.600 --> 0:02:35.240 back in the mid nineties to join Charles Schwab in 0:02:35.320 --> 0:02:38.200 a really unique role and opportunity. I joined as a 0:02:38.919 --> 0:02:41.440 chief of staff, which was a completely made up job 0:02:41.520 --> 0:02:44.280 for one of the vice chairman running the advisor business 0:02:44.320 --> 0:02:46.960 and the Floral wind Cave business. Actually had a chance 0:02:47.000 --> 0:02:50.200 to review with Chuck as part of the job. So boy, 0:02:50.520 --> 0:02:52.840 you know, talk about lucky is a way to enter 0:02:52.840 --> 0:02:55.280 this industry and do it the right way and learn 0:02:55.320 --> 0:02:57.600 the right principles. You know, had a had a chance 0:02:57.639 --> 0:03:00.200 to work down the hall from Chuck and learned from him. 0:03:00.200 --> 0:03:04.640 But that was that. And prior to that, I had 0:03:04.680 --> 0:03:08.040 some experiences, but they were in management consulting, and like 0:03:08.080 --> 0:03:10.680 a lot of management consultants, I dabbled in a lot 0:03:10.720 --> 0:03:13.800 of industries. I worked in telco, I worked in consumer products, 0:03:13.840 --> 0:03:18.240 I worked in technology, I worked in across the board, 0:03:18.240 --> 0:03:22.160 actually worked in the private equity consulting practice of Baning Company, 0:03:22.360 --> 0:03:25.000 And well, that was an awesome experience and a great 0:03:25.040 --> 0:03:28.959 foundation for learning business and role. I found myself really 0:03:28.960 --> 0:03:32.480 longing to find an industry that had a real purpose 0:03:33.040 --> 0:03:35.040 and to find a company in a place in that 0:03:35.200 --> 0:03:38.440 industry where you could really innovate, and Schwab became that 0:03:38.480 --> 0:03:40.560 place for me at the beginning of my career. Obviously, 0:03:40.880 --> 0:03:43.320 US had some other stops along the way, and I'm 0:03:43.320 --> 0:03:45.720 sure we'll get to talk about those, But really lucky, 0:03:45.800 --> 0:03:48.920 I spent twelve years a SUAB through the growth and 0:03:48.960 --> 0:03:53.440 evolution of that business and to find the independent advisor industry, 0:03:54.080 --> 0:03:55.640 and I just fell in love with it. You know, 0:03:55.720 --> 0:03:59.520 there's there's challenges, there's market turbulences, but we we all 0:03:59.600 --> 0:04:02.440 have this compass, which is the client and doing the 0:04:02.560 --> 0:04:05.920 right thing for them. So it's been been very, very 0:04:06.000 --> 0:04:08.360 very good to me over the years. So you you 0:04:08.440 --> 0:04:12.320 had gone from Bain to Schwab, and after twelve years 0:04:12.360 --> 0:04:15.320 of Schwab you left to go to Black Diamond, which 0:04:15.360 --> 0:04:21.080 seems to be like a much more technologically focused, less 0:04:21.120 --> 0:04:25.520 straight up wealth management company than Schwab. What was that 0:04:25.560 --> 0:04:29.200 transition like? And did I mistake that it sounds like 0:04:29.320 --> 0:04:34.240 they're two very different companies in a similar field. Well, yeah, 0:04:34.360 --> 0:04:36.920 The Black Diamond, for those that don't know, is a 0:04:37.000 --> 0:04:41.320 technology provider, most notably in web based cloud based development, 0:04:41.440 --> 0:04:45.480 providing reporting two advisers to help them tell their stories, 0:04:45.839 --> 0:04:49.560 whether they were managing portfolios or providing a broader wealth 0:04:49.600 --> 0:04:53.960 management offering like Mercery Advisors does. And I gets similar 0:04:54.000 --> 0:04:57.800 to the story about financial services I wasn't an engineer either, right, 0:04:57.839 --> 0:05:00.279 I wasn't didn't grow up as a developer. I just 0:05:00.320 --> 0:05:04.040 really understood the space and understood what advisors did. And 0:05:04.200 --> 0:05:07.880 that was two thousand nine, so heels of the financial crisis, 0:05:07.920 --> 0:05:11.360 I decided it was the right time to leave SWAB, 0:05:11.640 --> 0:05:14.039 picked my family up from the San Francisco Bay Area 0:05:14.080 --> 0:05:18.160 and joined a technology company in northeastern Florida. All of 0:05:18.200 --> 0:05:20.960 my friends in the Bay area thought I was completely 0:05:21.080 --> 0:05:24.880 nuts for leaving the safety and security of a big company. 0:05:24.920 --> 0:05:27.440 Even despite the difficulties we were having, I was. I 0:05:27.480 --> 0:05:29.960 was doing very well there. I was continuing to grow 0:05:30.000 --> 0:05:33.080 and get be given more responsibilities. But I had this 0:05:33.120 --> 0:05:35.240 idea that I wanted to get involved in technology. I 0:05:35.279 --> 0:05:38.840 really felt like today, but especially at that time in 0:05:38.880 --> 0:05:41.360 two thousand nine, the technology was going to be part 0:05:41.360 --> 0:05:44.520 of solving the challenges that are industry based and the 0:05:44.560 --> 0:05:48.440 consumers were clamoring for. So I had this this meta 0:05:48.480 --> 0:05:51.880 investment pieces, if you will, that technology was going to 0:05:52.040 --> 0:05:54.400 move from the back office to the front office, as 0:05:54.400 --> 0:05:57.640 we talked about in advisory firms, and help advisors run 0:05:57.680 --> 0:06:01.279 their businesses more efficiently with more scale, ill and more consistency. 0:06:01.760 --> 0:06:04.400 But also give the consumer what they were demanding, which 0:06:04.520 --> 0:06:08.599 was more transparency. At that time, I think, as you 0:06:08.640 --> 0:06:11.800 know and might might even remember, it was very dynamic time. 0:06:11.839 --> 0:06:14.640 Consumers wanted to know how they were doing, where they were, 0:06:15.200 --> 0:06:18.240 and what Black Diamond did was on a daily basis 0:06:18.279 --> 0:06:20.840 cheap plus one or next day was able to tell 0:06:21.040 --> 0:06:24.080 clients at a very granular level how they were doing, uh, 0:06:24.279 --> 0:06:26.960 not just pulling up the last quarterly performance report which 0:06:26.960 --> 0:06:28.960 could have been two and a half or three months old, 0:06:29.279 --> 0:06:32.320 given timing of how those those report out, and be 0:06:32.320 --> 0:06:35.599 able to tell folks very dynamically. So it was a 0:06:35.640 --> 0:06:38.839 great opportunity and a risk, if you will, on on 0:06:38.839 --> 0:06:42.279 one level, but probably the best career decision I ever made. 0:06:42.320 --> 0:06:45.960 You know, we all faced these opportunities and these these 0:06:46.120 --> 0:06:49.080 roads that we that we meet in our careers, and 0:06:49.800 --> 0:06:51.720 that was an opportunity for me to try my hand 0:06:51.760 --> 0:06:55.039 at something that was much much more entrepreneurial. It was 0:06:55.160 --> 0:06:58.120 very small when I joined. There's twenty employees, less than 0:06:58.160 --> 0:07:02.120 two million annual revenues, a good product, but certainly not 0:07:02.200 --> 0:07:06.360 a big business. So pretty big difference from from a 0:07:06.360 --> 0:07:08.560 big company with a lot of resources to drop into 0:07:08.600 --> 0:07:11.880 an environment that was still trying to break through, still 0:07:11.920 --> 0:07:15.160 try to to get known and develop its footing. And yeah, 0:07:15.200 --> 0:07:17.280 well I've left that part of my career behind. It 0:07:17.360 --> 0:07:20.320 was over three years ago when I left that team. 0:07:20.360 --> 0:07:23.920 There's now more than five people in Northeastern Florida. It's 0:07:23.960 --> 0:07:26.920 one of the best companies to work for Northeastern Florida. 0:07:27.000 --> 0:07:29.760 So you very proud of that part of my career heritage. 0:07:29.760 --> 0:07:32.840 It didn't start that way. Um, but nothing like being 0:07:32.840 --> 0:07:35.520 thrown into an entrepreneurial situation to figure out whether you've 0:07:35.640 --> 0:07:39.080 you've got the goods to be able to to bootstrap 0:07:39.160 --> 0:07:42.080 and do things yourself rather than rely on big, big 0:07:42.120 --> 0:07:44.400 teams to do things for you. So let's talk about 0:07:44.440 --> 0:07:48.680 the next entrepreneurial opportunity. Not too long ago, you end 0:07:48.840 --> 0:07:53.120 up at Mercer Advisors. What was the transition like becoming 0:07:53.120 --> 0:07:56.640 a CEO of a wealth management firm when you were 0:07:56.640 --> 0:08:01.480 previously working in what really is a technology company. The 0:08:01.600 --> 0:08:05.000 transition was was quick and it was a change. I 0:08:05.400 --> 0:08:09.520 finished work at Black Diamond. At Black Diamond had, over 0:08:09.560 --> 0:08:12.880 the years, had been acquired by Advent Software, which then 0:08:12.920 --> 0:08:15.520 in turn had been acquired by SS and C Technology. 0:08:15.600 --> 0:08:18.320 So I had gone from this small entrepreneurial company who 0:08:18.440 --> 0:08:21.880 actually was running Advent, which is a international company with 0:08:21.960 --> 0:08:25.240 offices all over the world as a division of S 0:08:25.280 --> 0:08:28.240 S and c UM. You know, we're four million annual revenues, 0:08:28.480 --> 0:08:31.840 you know, thousands of employees. Was with co leader of 0:08:31.920 --> 0:08:34.760 that business. But I was longing again to get back 0:08:34.760 --> 0:08:36.959 to something that was a little bit more entrepreneurial and 0:08:37.000 --> 0:08:39.840 a little bit closer to home in terms of focusing 0:08:39.840 --> 0:08:42.480 on the advisor business. But I finished work at six 0:08:42.520 --> 0:08:45.680 pm on a Friday, uh six am the next morning, 0:08:45.840 --> 0:08:48.680 I was on a plane, and then Sunday night I 0:08:48.720 --> 0:08:51.440 had dinner with Dave Barton, who was the CEO of 0:08:51.480 --> 0:08:54.559 Mercer for eight years prior to me joining. And the 0:08:54.640 --> 0:08:58.640 juncture where Mercer was at the time was growing very 0:08:58.720 --> 0:09:02.520 quickly organic way, but also had it had an opportunity 0:09:02.520 --> 0:09:06.520 and interest to to go through some acquisitions and acquire 0:09:06.640 --> 0:09:09.679 smaller practices of financial planners all over the country who 0:09:09.679 --> 0:09:13.280 were looking for that solution. Dave went left, meaning Dave 0:09:13.360 --> 0:09:16.640 jumped into a vice chairman role and started focusing on 0:09:16.720 --> 0:09:19.320 mergers and acquisitions, and that created an opportunity for me 0:09:19.360 --> 0:09:22.680 to join the organization and help lead the next chapter. 0:09:22.880 --> 0:09:27.320 So very different, very different business. Probably the biggest different 0:09:27.440 --> 0:09:31.760 structurally isn't what you'd think. Um, it's not technology versus 0:09:31.760 --> 0:09:36.280 wealth management. It's people largely all in one place with 0:09:36.360 --> 0:09:38.960 a sales teams right around the country, which is technology 0:09:39.040 --> 0:09:42.280 to Mercer. And we're about four dred and fifty employees 0:09:42.280 --> 0:09:45.320 today spread across forty five offices or so i'd like 0:09:45.320 --> 0:09:47.679 to say, forty five leases that we're paying for in 0:09:47.720 --> 0:09:50.000 different parts of the country. So it's very different to 0:09:50.120 --> 0:09:53.000 lead a culture that's spread as thin as we are 0:09:53.400 --> 0:09:56.440 and lead it as one team. So uh different, different 0:09:56.480 --> 0:09:59.000 transition in that respect to figure out how to land 0:09:59.040 --> 0:10:01.920 and earn the trust of the team and to leave 0:10:01.960 --> 0:10:05.520 the organization when we're so dispersed, at least at least 0:10:05.520 --> 0:10:09.199 physically dispersed. So I want to get to the issue 0:10:09.440 --> 0:10:13.120 of growing through mergers and acquisitions, but before we go there, 0:10:13.720 --> 0:10:18.160 I have to stick with two questions about your transition 0:10:18.200 --> 0:10:21.280 to being CEO. The first one is how does an 0:10:21.320 --> 0:10:26.480 outsider come into a relatively small, privately held company as 0:10:26.520 --> 0:10:30.400 a CEO. That sounds like it's a big challenge. Tell 0:10:30.480 --> 0:10:33.640 us a little bit about that transition. So the history 0:10:33.640 --> 0:10:36.400 of Mercer is actually pretty unique and you know, my 0:10:36.480 --> 0:10:39.680 position as CEO comes in after a long history of 0:10:39.720 --> 0:10:44.719 ownership transition, leadership transition. So Kendrick Mercer, the founder of 0:10:44.760 --> 0:10:48.839 the business, founded Mercer in We were one of the first, 0:10:49.000 --> 0:10:52.640 the only financial planning firms in the country. Kendrick, you're 0:10:52.760 --> 0:10:55.800 very unique guy, passionate about financial planning, but had a 0:10:55.800 --> 0:10:58.400 lot of other life interests. Made a decision to bring 0:10:58.400 --> 0:11:04.200 in a partner group early early nineties, brought on five partners. 0:11:04.720 --> 0:11:07.559 Dave Barton, who I mentioned earlier, was one of those partners. 0:11:08.080 --> 0:11:10.560 In two thousand and three we brought in our first CEO. 0:11:10.800 --> 0:11:13.640 So I'm not the first CEO of the business, but 0:11:13.760 --> 0:11:16.480 for a kind of transition of CEO as if you will. 0:11:17.040 --> 0:11:19.880 And the interesting thing about Mercer when you look at 0:11:19.920 --> 0:11:22.880 what's happening in our industry is we made this transition 0:11:22.960 --> 0:11:26.360 from a single founder to a partnership, a partnership to 0:11:26.679 --> 0:11:31.760 a CEO mandate to outside capital investments in private private equity. 0:11:31.880 --> 0:11:34.880 So when we talk about mergers and acquisition, Mercer has 0:11:34.920 --> 0:11:38.400 been down a lot of these paths. Um We've evaluated 0:11:38.400 --> 0:11:41.160 the options and decisions at different junctures of our history. 0:11:41.960 --> 0:11:44.240 Because we've been around for so long we've made those 0:11:44.280 --> 0:11:47.880 decisions over the years. So my entry is CEO. Came 0:11:47.920 --> 0:11:50.280 into a business that was used to having a CEO, 0:11:51.120 --> 0:11:53.520 also had a lot of outside capital, and as I'm 0:11:53.559 --> 0:11:56.439 sure you know, really important part of the CEO is 0:11:56.480 --> 0:11:59.120 not just leading the business, but managed the investor base 0:11:59.200 --> 0:12:02.440 as well of keeping them confident and comfortable and to 0:12:02.440 --> 0:12:05.240 be able to pass pass the business forward. What was 0:12:05.280 --> 0:12:08.920 tricky for me at the time of entering the business 0:12:08.960 --> 0:12:13.000 and was to get the team to know me. So 0:12:13.040 --> 0:12:16.280 the very first thing that I did was certainly not 0:12:16.320 --> 0:12:20.200 sitting headquarters and try and do planning. I got on 0:12:20.240 --> 0:12:22.839 a plane. At that time, we certainly could do that, 0:12:22.840 --> 0:12:25.320 it's much unfortunately we can't do it now. And I 0:12:25.360 --> 0:12:28.080 went to visit every single office. UM sat with the 0:12:28.080 --> 0:12:31.160 team's talk to them about what was working, what was 0:12:31.200 --> 0:12:33.559 not working, what they thought we should do to move forward. 0:12:33.960 --> 0:12:37.000 The best thing I ever did because it both connected 0:12:37.040 --> 0:12:39.960 me to the culture and team and inversely helped the 0:12:39.960 --> 0:12:42.800 team understand who I was and where I was coming from. 0:12:42.880 --> 0:12:48.559 Very interesting. So in the firm was under ten billion dollars. 0:12:48.600 --> 0:12:53.600 Today you're over billion dollars. That's not that long a 0:12:53.640 --> 0:12:58.360 time to more than Dublin size. Was that your vision 0:12:58.480 --> 0:13:02.920 from day one to begin acquiring other advisory shops. How 0:13:02.920 --> 0:13:05.920 did this approach come about? Yeah, I guess it was 0:13:05.960 --> 0:13:09.240 certainly part of our most recent history. But the vision 0:13:09.240 --> 0:13:12.240 and purpose of the organization is to help clients and 0:13:12.360 --> 0:13:15.480 help them on their path the economic freedom. So, as 0:13:15.520 --> 0:13:18.120 we talked about a little earlier, the firm has been 0:13:18.160 --> 0:13:22.120 around thirty five years and we've only been doing acquisitions 0:13:22.120 --> 0:13:25.320 over the last four. What what had happened over the 0:13:25.360 --> 0:13:29.240 first thirty plus years is the business had grown to 0:13:29.320 --> 0:13:31.920 be a national firm. We had eighteen offices all around 0:13:31.920 --> 0:13:35.160 the country. We're about six billion at that time prior 0:13:35.240 --> 0:13:38.760 to doing our first acquisition, and we had gone through 0:13:38.800 --> 0:13:42.240 the work and figured out that working as eighteen different 0:13:42.280 --> 0:13:46.360 teams wasn't going to work. We had a centralized investment team, 0:13:46.440 --> 0:13:49.840 a common client experience. We had built our state planning 0:13:49.880 --> 0:13:53.360 team and tax team. We had built the set of 0:13:53.440 --> 0:13:56.360 services that we provide our clients, and had built a 0:13:56.400 --> 0:14:01.040 culture of working together despite being because we separated across 0:14:01.080 --> 0:14:04.640 those eighteen offices, and what we found was there was 0:14:04.679 --> 0:14:07.880 both interest in an opportunity for other firms who were 0:14:07.920 --> 0:14:11.560 like minded to join us. To get access to that 0:14:11.640 --> 0:14:15.040 set of services and capabilities. And you know, in this 0:14:15.160 --> 0:14:18.080 this industry, there's a lot of great professionals out there, 0:14:18.080 --> 0:14:21.040 a lot of great independent investment advisors out there who 0:14:21.080 --> 0:14:24.640 work as true fiduciaries that they have small practices. It's 0:14:24.640 --> 0:14:28.520 a very fragmented interest industry, and some of those principles 0:14:28.640 --> 0:14:32.320 that were at one time entrepreneurs had evolved from entrepreneurs 0:14:32.360 --> 0:14:35.760 to starting to think about their retirement and they were 0:14:35.840 --> 0:14:39.320 looking for a place to put their practice, put their business, 0:14:39.960 --> 0:14:43.640 put their clients in the hands of a firm that 0:14:44.400 --> 0:14:48.000 had shared interests, shared beliefs, and the shared value system. 0:14:48.200 --> 0:14:51.720 So it was this coming together of Mercer having an 0:14:51.720 --> 0:14:56.400 appetite to grow and ability to grow, a desire to grow, 0:14:56.440 --> 0:15:00.120 but also huge, huge demand from firms that were it's 0:15:00.160 --> 0:15:03.640 like Mercer, We've acquired businesses that, while there are a 0:15:03.640 --> 0:15:06.520 lot smaller, have also been around for thirty years and 0:15:06.600 --> 0:15:09.160 some of the first the only financial planning firms in 0:15:09.160 --> 0:15:13.800 the country. And what's different about acquisitions in in our 0:15:13.840 --> 0:15:16.960 industry and our space and in this context is those 0:15:16.960 --> 0:15:20.440 sellers are looking for much more than a transaction and 0:15:20.520 --> 0:15:23.680 evaluation of their business. That's what I saw on technology. 0:15:23.920 --> 0:15:26.360 You see it all the time when Amazon biased companies 0:15:26.440 --> 0:15:29.560 or Google buas companies. You know they're buying the technology 0:15:29.400 --> 0:15:33.640 they want the engineers. But it's very different than this industry. Uh. 0:15:33.760 --> 0:15:36.080 These are for people who set out on their own, 0:15:36.080 --> 0:15:38.120 have been running their own business for twenty years. It's 0:15:38.120 --> 0:15:41.200 it's their life's work, and they're not going to put 0:15:41.280 --> 0:15:44.720 their clients into a bad investment. And they're not going 0:15:44.760 --> 0:15:48.040 to put their clients into a situation where the firm 0:15:48.160 --> 0:15:51.040 that's that's taking over the business and becoming their sucception 0:15:51.120 --> 0:15:54.480 plan for them doesn't share the same values and beliefs 0:15:54.480 --> 0:15:58.360 and systems. So I think what is really propelled our 0:15:58.680 --> 0:16:03.080 our acquisitions strategy is a combination of two things. One, 0:16:03.400 --> 0:16:05.520 we've done quite a few of them. By the time 0:16:05.560 --> 0:16:08.040 we finished this year, we will have done over forty 0:16:08.080 --> 0:16:12.359 acquisitions in four years, so over ten a year on average. 0:16:12.840 --> 0:16:16.080 And the second is all those firms believing their clients 0:16:16.120 --> 0:16:18.960 are going to be better served after easy example, and 0:16:19.000 --> 0:16:21.360 I think we might talk about this later. We have 0:16:21.440 --> 0:16:24.400 a dedicated a state planning team and a dedicated tax team. 0:16:24.560 --> 0:16:27.160 Not just g p a s and lawyers who are 0:16:27.200 --> 0:16:30.120 practicing advisors. You have dedicated teams that all they do 0:16:30.160 --> 0:16:32.320 is put together a state plans for clients, and those 0:16:32.360 --> 0:16:36.960 are often huge uptick services for for clients in this context, 0:16:36.960 --> 0:16:39.280 so the sellers see, hey, this is not just good 0:16:39.280 --> 0:16:40.920 for me, this is going to be a good solution 0:16:40.960 --> 0:16:43.880 for my clients. So I want to discuss the various 0:16:43.880 --> 0:16:48.400 wealth management services mercer offers in a few minutes. Let's 0:16:48.520 --> 0:16:52.640 focus now on the merger and acquisition process. You guys 0:16:52.640 --> 0:16:56.000 have completed forty in four years. That that's quite a 0:16:56.120 --> 0:17:00.280 robust number. Tell us a little bit about your pro says, 0:17:00.320 --> 0:17:03.520 how do you find companies to acquire? Are you looking 0:17:03.560 --> 0:17:05.879 for them? Do they come to you? Give us a 0:17:05.880 --> 0:17:09.639 little uh, behind the scenes explanation as to what this 0:17:09.720 --> 0:17:14.600 process is like. Yeah, there's a there's obviously a courtship process. Right, 0:17:14.640 --> 0:17:17.200 There's there's a do we like them and do they 0:17:17.280 --> 0:17:19.920 like us? Process, which picks up on the common I 0:17:20.000 --> 0:17:23.560 may before and maybe we can come back what happens after, Right, 0:17:23.640 --> 0:17:28.920 it's the the consummation, the acquisition itself, the closing date. 0:17:29.040 --> 0:17:31.560 That's just a mile post on the building of a 0:17:31.560 --> 0:17:35.800 broader relationship. But focusing on on before that mile post, 0:17:36.880 --> 0:17:40.560 the more acquisitions we've done, the more people find their 0:17:40.600 --> 0:17:44.439 way to us because we have now become a known 0:17:44.480 --> 0:17:48.920 option that has a certain value proposition. Right, so we 0:17:48.920 --> 0:17:51.959 we are, as I call it, an integrator, not an aggregator. 0:17:52.440 --> 0:17:56.280 We're going to become one business, one integrated client experience. 0:17:56.920 --> 0:18:00.160 That's very appealing not just to our shareholders and from 0:18:00.160 --> 0:18:03.360 a business perspective, it's it's very relevant to the context 0:18:03.359 --> 0:18:06.040 of some of the situations where we find sellers that 0:18:06.080 --> 0:18:08.199 are looking for a succession plan or a place to 0:18:08.240 --> 0:18:12.840 transition their practice or their business. We're very active in 0:18:12.880 --> 0:18:16.840 the industry. My involvement in the industry for thirty plus years. 0:18:16.960 --> 0:18:20.160 I've probably been in a thousand different advice for offices 0:18:20.200 --> 0:18:23.720 around the country over the years, just physical offices. So 0:18:23.800 --> 0:18:28.400 those relationships are really helpful because we're not starting from scratch. 0:18:28.480 --> 0:18:31.720 There's some prior intersection. It may have been several years 0:18:32.119 --> 0:18:34.680 where firms that I've known, principles that I've known over 0:18:34.720 --> 0:18:37.520 the years, that I've had the fortune to build a 0:18:37.600 --> 0:18:40.800 relationship with and helping them build that business or just 0:18:40.880 --> 0:18:43.359 be on the be on the sidelines cheering for them. 0:18:43.720 --> 0:18:46.520 UM is very relevant to the meeting and greeting part 0:18:46.560 --> 0:18:50.320 of it. But once we kind of get the conversation going, UM, 0:18:50.359 --> 0:18:53.320 we believe in a really rich interface of dialogue between 0:18:53.359 --> 0:18:56.800 our firm and their firm. The best the best context 0:18:56.880 --> 0:18:59.679 is there's several people deep in our our firm and 0:18:59.720 --> 0:19:02.280 several people deep in theres who are talking to each other, 0:19:02.760 --> 0:19:07.080 not about the valuation of the transaction. That's probably less 0:19:07.080 --> 0:19:10.320 than five percent of the content. It's important, but it's 0:19:10.359 --> 0:19:14.440 relatively straightforward, UM, and a place to land on whether 0:19:14.440 --> 0:19:17.200 you're going to have a similar sense of what the 0:19:17.280 --> 0:19:19.879 value the business is. The most important part is how 0:19:19.880 --> 0:19:22.080 are we going to be better together than we were apart? 0:19:22.280 --> 0:19:24.480 What is this going to be like for clients? UM? 0:19:24.920 --> 0:19:27.920 What tools are in the tool chest both at mercer 0:19:28.320 --> 0:19:32.119 or in the business that we're acquiring. We've acquired several 0:19:32.160 --> 0:19:35.320 practices that have not just a wealth management firms that 0:19:35.400 --> 0:19:39.400 had dedicated accounting teams themselves, right, So that's been really 0:19:39.400 --> 0:19:42.639 appealing for us to build our tax business, build our 0:19:42.680 --> 0:19:45.399 expertise in our tax business, and for them to know 0:19:45.520 --> 0:19:48.280 the acquirer really believed in having that part of the business, 0:19:48.280 --> 0:19:51.760 because not everybody in our industry really wants that to 0:19:51.840 --> 0:19:54.639 be part of their core service. Offering, so uh that 0:19:54.840 --> 0:19:57.640 that's you know, the rich interface. So by the time 0:19:57.640 --> 0:19:59.920 we get to okay that we're going to do the 0:20:00.040 --> 0:20:04.720 this acquisition and they closed a we have mutual clarity 0:20:04.760 --> 0:20:07.679 on what we're trying to create together. We have a 0:20:07.800 --> 0:20:10.080 vision of how things are to come together at a 0:20:10.080 --> 0:20:12.960 pretty granular level. Um and you know, one of the 0:20:13.000 --> 0:20:15.040 things that we didn't touch on earlier in my experience 0:20:15.080 --> 0:20:17.640 when I was at Black Diamond. Black Diamond was bought 0:20:17.640 --> 0:20:20.199 by by Advent. Advent was a public company, it was 0:20:20.280 --> 0:20:24.200 bought by a se and given the scale of those transactions, 0:20:24.200 --> 0:20:26.920 but mostly employees found out about it on a random Tuesday, 0:20:27.280 --> 0:20:29.119 and then we were scrambling to figure out what the 0:20:29.160 --> 0:20:31.480 strategy was and how the pieces were going to sit together. 0:20:31.640 --> 0:20:34.960 We have an opportunity in the context of these acquisitions 0:20:34.960 --> 0:20:38.120 to do a lot of work up front to make 0:20:38.160 --> 0:20:42.080 sure that the uncertainty that that can be there in 0:20:42.119 --> 0:20:45.240 these transitions is really limited to the uncertainty for clients 0:20:45.240 --> 0:20:47.879 and uncertainty for employees, because we say, well, this is 0:20:47.880 --> 0:20:49.520 going to look like and this is how it's going 0:20:49.600 --> 0:20:53.560 to work. Huge opportunity and that that helps people feel 0:20:53.600 --> 0:20:56.840 really confident when when they make these decisions. So under 0:20:56.880 --> 0:20:59.720 normal circumstances, there's a lot of neat and great, there's 0:20:59.720 --> 0:21:02.960 a lot back and forth. But obviously these are not 0:21:03.119 --> 0:21:07.320 normal circumstances. How do you do these sorts of deals 0:21:07.359 --> 0:21:10.879 that require a little bit of staring each other in 0:21:10.960 --> 0:21:13.600 the eye and making sure everybody is comfortable with each 0:21:13.600 --> 0:21:17.520 other during a pandemic where we're kind of limited to 0:21:17.640 --> 0:21:20.760 zoom and not person in person meetings. What what's it 0:21:20.840 --> 0:21:24.080 been like this year? Yeah, there's no question it's a 0:21:24.080 --> 0:21:27.399 lot harder, right, Um, I think you know the the 0:21:27.520 --> 0:21:31.040 uptick people look at the disadvantages, right, this is a 0:21:31.040 --> 0:21:33.800 at its core, this is a kneecapped to kneecap business. 0:21:33.880 --> 0:21:38.199 That's how advisors build their relationships with clients, particularly at 0:21:38.240 --> 0:21:41.679 the beginning, and this bond of trust that needs to 0:21:41.720 --> 0:21:45.080 form over an extended period of time of delivering value 0:21:45.520 --> 0:21:48.439 is just as true in this context of acquisitions as 0:21:48.480 --> 0:21:51.119 it is in the context of an advisor working with 0:21:51.119 --> 0:21:53.320 our clients. And I'm sure many of your listeners that 0:21:53.400 --> 0:21:57.280 will resonate with them. But what's been really interesting about 0:21:57.640 --> 0:22:01.320 using zoom in the technology, It's actually enabled us to 0:22:01.440 --> 0:22:05.560 have a much quicker cadence and to have more people 0:22:05.760 --> 0:22:08.880 from the firms are requiring be engaged in the process, 0:22:08.920 --> 0:22:12.040 and more people engaged on the Mercer team. We just 0:22:12.080 --> 0:22:16.400 did a call yesterday morning that went three hours with 0:22:16.400 --> 0:22:18.239 with the firm that's going to be joining us at 0:22:18.240 --> 0:22:20.960 the end of the year, and we had eight people 0:22:21.200 --> 0:22:24.080 from the Mercer team coming in in different time segments 0:22:24.119 --> 0:22:27.440 talking about how they're the employee benefits are gonna work, 0:22:27.480 --> 0:22:29.399 how the investment mapping is going to work, how our 0:22:29.520 --> 0:22:32.159 state planning team is going to work. That would have 0:22:32.200 --> 0:22:35.680 been hard for us to do in a different context 0:22:35.800 --> 0:22:38.919 to fly eight people from Mercer across the country, get 0:22:38.960 --> 0:22:40.920 all their employees in our one room and do that 0:22:41.359 --> 0:22:43.919