Neil Simon’s “The Odd Couple” asks the question: “Can two divorced men share an apartment without driving each other crazy?” In a similar vein: Can two FAs competing in the same market merge practices without cramping each other’s style?
For years, independent advisors Barbara Archer and Carol Rogers were strong competitors in St. Louis, Missouri. Now they’ve combined forces to form HighTower St. Louis, they told ThinkAdvisor in an interview. Assets under management: approximately $750 million.
The two met 15 years ago at a conference for successful FAs and were simpatico from the start. Over time, the friendly competitors shared business ideas even as they vied for clients in the same city.
Both Barron’s multi-top-listers, the advisors are far from an Odd Couple. Each had her own practice for decades that focused on high-net-worth and ultra-high net worth individuals and business professionals — and both had a thirst to grow, which chiefly drove the merger. They likely face challenges in their new venture; but that doesn’t faze this fearless duo, who, separately, have flown airplanes and parachuted out of them.
Rogers, 68, started out at E.F. Hutton, where she rose to become a member of Chairman’s Council. After 10 years at the firm, in 1986 she went independent to found the predecessor to Rogers & Co. Wealth Management. LPL was her broker-dealer for 17 years.
Archer, 62, formed Archer Wealth Management in 1983, specializing in serving high-net-worth families and executives. Her BD for about 20 years was NFP. Prior to entering financial services, she was a reliability engineer with General Motors and Ralston Purina.
The merger became effective in April, and the HighTower St. Louis team of 12 is serving four generations of more than 700 families and individuals in 42 states and six countries.
In a phone interview, the two advisors discussed why they merged, why they chose HighTower and what their expectations are for the combined firm. Here are highlights from our conversation:
THINKADVISOR: You’re both strong, independent women and were competitors. You each had individual practices for decades. What’s the biggest challenge about merging businesses?
CAROL ROGERS: Who’s in charge.
BARBARA ARCHER: We’re breaking up responsibilities and are co-managing partners. That can work for or against us, But [it helps that] we’ve known each other for so long.
CR: We’re working with a business consultant who’s a psychologist and discussing how we work together and what our strengths and challenges are. He did the same with both our teams. We’ll work with him ongoing. We’re doing this so that we understand one other and to help us work as one team.
Why do you feel you need that help?
CR: It’s a critical part of merging two teams because Barbara and I are a little territorial about the way we do business and how we treat our clients. But the culture of the two teams is so identical that it’s heartwarming. The merger will work only if we build a truly combined practice and make sure there’s continuity of clients and teams. We’re serving each other’s clients and have a system that lets us pull up our notes on all of them.
BA: Our cultures are similar in that they were team-driven, client-service focused and technologically forward. And they offered detailed planning advice and sophisticated investment strategies. [But] there were some cultural differences. From my standpoint, these were [people’s] jobs. And now, those [including Carol’s and mine] may change somewhat.
How do you two complement each other?
CR: Barbara is more business-detailed, which I find extraordinarily attractive. She has a lot more energy than I. She spends more time at the office. But now [with the merger] she won’t spend as much time. I’m also buying her a book called “Relax.”
BA: We’ll see if I’m trainable in that regard! Carol is a terrific creative mind on ways to serve our clients and engage new clients. Carol is nicer. I’m the P&L gal. I won’t let her near paperwork!
How do you adjust to joining HighTower because both of you were independents for so long?
BA: HighTower allows us to continue to be independent. We get to be “intrapreneurs” instead of entrepreneurs.
Does HighTower have equity in your practice?
BA: They have some equity in [us], and [we] have some equity in them. HighTower is advisor-owned, which is why [all the FAs] are very collaborative.
How is your compensation structured under the merger?
CR: We’ll maintain each of our P&Ls as it exists today for the next four years. But any new clients immediately become our combined clients.
BA: It’s a one-team approach. We’re not holding these businesses that we built for the past 30-plus years close to our vests. And we’ll train any new young advisors that this is a team concept.
Ms. Archer joined HighTower in August of last year, but the merger with didn’t take place till this April. Please explain.
CR: This [merger] has been a collective, planned effort. The decision was to do this simultaneously; and I was already in the process [of selecting a BD], which was a very time-consuming process.
BA: Carol knew I was searching for a new home and would say, “Tell me who you love.”
CR: But I was looking at HighTower from an independent side. HighTower allows people to join them independently or an on equity basis. When I found that Barbara was joining on the equity side, I came to a screeching halt and completely changed my approach. Barbara just got her toe in the water a little faster. Our teams said to us, if you’re both looking at the same firm and have talked about this forever, let’s do it.”
BA: I hired an investment banker to make sure I was with the right [BD] for growth strategy. Carol didn’t use an investment banker. She did it on her own, so it took her a little longer.
Describe your due diligence.
BA: It included 21 different companies. I had 14 offers; and from those, I narrowed it down to three finalists.
CR: Two of those were my top choices too.
Why did you two want to merge in the first place?
CR: Long term, this was a piece of a succession plan for me and my team. I don’t plan to retire. I’m going to be here till I have drool on my desk. But I wanted to make certain that there’s an ongoing legacy for our clients and our team. I had built a diversified team of professionals with lots of credentials, but a company has to grow beyond the expertise.
BA: I wasn’t looking for a succession plan. I wasn’t exiting. I’m working till I can’t work anymore [too]. My attraction to merging with Carol, besides fun, friendship and shared creativity, was the possibility of enhancing our services and those of the unique members on our teams [though HighTower]. Together, we have even more interesting ways to engage, educate and enrich the lives of our clients and friends in the community. We’ll be eliminating redundant business processes as we progress and use that time to see and serve more families and businesses.
Why did you choose HighTower?
CR: I knew that [the firm] had to add greater depth to my firm and allow my clients to be OK for the next three or four generations, and for my team to stay intact. We were also looking for sophisticated levels of expertise outside our own office that our clients need. The other HighTower advisors with various specializations are happy to help in areas we don’t have depth in.
BA: I wanted to tie in with [a firm] that could increase our business and for growth strategy. I wanted a more sophisticated platform and a partner that could help me get to the next level. It was no use making a move unless my clients had something more and better, and that would make my team more efficient and excited. I wanted to help carry the team forward in a growth strategy and be able to serve more people and offer more services.
CR: One of the things that led us to decide on HighTower relates to the fiduciary standard. We’re not in opposition to it because Barbara and I have practiced it for 20 years or more. The future is based on a fiduciary responsibility. HighTower espoused that very same core belief and built their firm around it.
BA: The [Labor Department’s fiduciary] rule doesn’t have an impact on us like it does on the stockbrokers out there.
CR: But it has kind of offset impact because it’s going to be a level playing field for us. As fiduciaries, everyone will have to toe the line. But we’re not going to be at a disadvantage; we’re going to be at an advantage.
What are some of the goals and plans for the practice?
CR: The whole gist is that this is a planning firm that also either manages money or manages money managers. Our entire intention is to manage every aspect of our clients’ very complex financial lives. Our objective is to understand their goals.
Ms. Rogers, via your newsletter, you’ve told clients that the merger will lower their costs. How is that?
CR: There aren’t as many middle people. In any firm I’ve worked with, the broker-dealer took a piece of anything I did for clients. HighTower doesn’t do that. They charge Barbara and me a fee. Also, we chose to work with Fidelity, which has made some of the most stringent cost reductions that we get to pass directly to our clients.
What areas of specialization will you share with other HighTower advisors ?
BA: Practice management, technology engagement, the ability to work with corporate executives in executive benefit planning and with business owners that are planning exit strategies. I’m an accredited estate planner [AEP] working with families in generational wealth and legacy planning.
CR: We also have expertise in tax planning, sophisticated life planning, strategic money management, and philanthropy and family gifting [among other specialties].
What are some services you’re offering that are perhaps different from that of other practices?
BA: HighTower has a tremendous arsenal of investment bankers with whom we can work to bring to our market for closely held business owners. And with the number of assets that HighTower can bring to bear with managers, we’ve been able to get fairer costs.
CR: It’s pretty amazing: We’re working with some of the very same managers that we’ve worked with for years; but with HighTower’s negotiation skills, some of those internal costs are 30% and 40% less.
What are plans for the practice that you care to share with readers?
CR: More client events and educational workshops. We’ve done many of these before, but now we can deliver them at a higher level. For instance, we have a relationship with a CPA that works with closely held businesses whose owners are looking for opportunities to sell. So that’s [advantageous] for seminars on succession planning.
You had a business partner years ago, Ms. Rogers. How did that relationship differ from the one you have with Ms. Archer?
CR: When Tom Woolsey and I started a firm 41 years ago, it wasn’t anything other than sharing expenses. It wasn’t truly a team.
Ms. Archer, did you ever partner with anyone else?
BA: I had a minority interest partner 17 years ago.
For decades you called your practices by your respective last names. But the merged firm is called “HighTower St. Louis.” How come?
BA: We felt that by using the HighTower brand name, we’re coming together as equals. We’re leaving old names and baggage behind, and taking all the good stuff and merging that with HighTower St. Louis.
You’ve had a long relationship both as friends and friendly competitors. It seems unlikely, therefore, that there’ll be big surprises personality-wise. Is that so?
BA: Right. We know the good, the bad and the ugly!
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