Illustration: Michael Glenwood Gibbs/theispot.com

Upon the recent anniversary of the 2019 combination of Sontag Advisory and Bronfman Rothschild into Wealthspire Advisors, it seemed right to reflect upon the lessons we learned as sellers that will continue to drive our success as buyers. At Bronfman Rothschild, we entered 2019 looking for like-minded firms to join us, but instead we ended up being the subject of an acquisition ourselves. In the process, we became better positioned to continue our legacy of smart growth through compatible acquisitions.

First, a bit of background. In March 2019, it was announced that Bronfman Rothschild was to be acquired by and consolidated with Sontag Advisory, a similarly sized firm and a wholly owned subsidiary of NFP Corp. The deal officially closed in May, and our two advisory firms fully integrated and rebranded as Wealthspire Advisors in October.

Accustomed to sitting on the buying side of the table, we didn’t expect to begin 2019 as a seller. But we did enter the conversation with an open mind and, as a result, we ended 2019 better positioned to execute on our inorganic growth strategy. More importantly, we learned some lessons as a seller that we believe will help us succeed in the future as a buyer.

Start With ‘Why’

In any transaction, it is important to have a strong understanding of “why,” or what you hope to accomplish. Long before we began our talks with Sontag Advisory, we had a clear profile as a buyer.

Critical to us was both cultural and business fit. Bronfman Rothschild was historically known for having a focus on full integration, which we believed allowed each of the firms to unlock the most value for their owners, employees and clients. Acquired firms would be able to grow their business at an increased rate by utilizing our fully integrated back office support system with its best-in-class solutions across multiple functions like marketing, investment operations and research, legal, compliance and risk management, technology, finance and accounting, talent management, and trust and estate services.

Answering the question, “Will this combination create value for our clients and our employees?” serves as our North Star. We recognized early that combining with Sontag and leveraging NFP’s scale and experience could enable us to develop capabilities our clients wanted and needed. It would also create meaningful opportunities for our employees to grow professionally over time.

For other firms considering a transaction, the “why” may be looking for a liquidity event, solving for succession issues, or reigniting the new business development engine. Whatever the circumstance, understanding your firm’s rationale is a critical first step.

Keep an Open Mind

Once you have a compelling answer to your “why” question, you can explore a possible transaction, ultimately proceeding to the next steps of talking about deal structure and price. But we found that for this exploration to result in any sort of viable deal, it’s imperative to come to the table with an open mind, free of preconceived notions about what terms must be included. Maintaining this openness in every possible way while staying closely tied to your own “North Star” will serve to keep you grounded by your own driving principles.

In our case, senior leaders from both Sontag Advisory and Bronfman Rothschild served in a common industry group. They got to know each other and learned about the commonality between firms.

Over time, as leaders from both firms continued to interact, similarities kept emerging. Though neither firm initially engaged with each other as a potential M&A prospect, all parties kept an open mind, and eventually leadership from both began sharing a belief that our combination would be better for both clients and employees.

At the same time, it became clear during this process that NFP was committed to maintaining ownership of Sontag Advisory, and that any combination would need to result in overall NFP ownership. Had we not been open to talking about a deal in which we weren’t the buyer, the discussions never would have progressed.

As it happens, NFP is a formidable financial services firm with over 5,000 employees and significant experience in our industry. In addition to Sontag, NFP also owns wealth management firms Lenox Advisors and DiMeo Schneider & Associates, as well as insurance brokerage, consulting, benefits and retirement businesses. NFP’s sophisticated technology and back office support would allow us to focus more fully on serving our clients and growing our business.

Maintain Flexibility on Deal Terms

Firms can spend a lot of time modeling out potential deal structures or focusing on “must have” components of a deal. We came to the table without a deal book or any preconceived ideas of how a deal might get done, reserving all discipline for our “why.” This actually led to the optimal deal structure falling into place.

While investment bankers or other advisors can give you a better understanding of process or market terms, they can’t necessarily help you with the most fundamental factor: Why am I doing a deal? If you can’t answer that, none of the industry frameworks will help you.

Don’t Skip Over Integration

As a buyer with deep expertise in integration, we never discount the value of that process during negotiations; the day a deal closes is not the end. Instead, we focus on a day much further down the road, when all clients will have a consistent experience and the value of our services will be understood equally across all relationships.

While we don’t believe in all advisors being exactly the same, we do want to ensure that every advisor has access to a dependable and consistent set of tools that will help them focus on what they do best, building relationships of trust with clients over a long period of time.

By fully integrating every firm into our culture and onto our platforms, we are able to unlock the most opportunity for advisors, employees and clients. One of our cultural beliefs say it best — we seek to create a flexible environment where scale and efficiency complement uniqueness.

That kind of integration takes time and hard work, and it doesn’t pan out for everyone. But for firms lacking investment in areas like technology or marketing, the scale that we bring can be transformative. Scale matters, but it can’t be achieved without paying attention to the deal “digestion” process that must occur after close.

You Don’t Always Have to Drive the Deal

How do all the interested parties come together? What is the genesis of the conversation that leads to a transaction where one plus one makes a lot more than two?

In the past, as the buyer we were always driving the deal. But in our most recent transaction, we were sitting across the table from the team at NFP, which offers a deep group of seasoned and knowledgeable dealmakers.

While we were clearly negotiating with them from a different side of the table, we did so with the knowledge that in the future they could end up being part of our inorganic growth team. It felt less like a radical shift and more like a continuing conversation.

We’ve learned that a consistent commitment and philosophy are important when growing and scaling an advisory business, and we also knew that our approach was consistent with the way NFP had scaled its other businesses. This knowledge helped us recognize why they were the right partner to help us achieve what we set out to do.

In our experience, some of the hardest deals to close are of two like-sized companies, because one firm always has to take the lead and acquire the other. But given Sontag’s backing by NFP, Bronfman being the seller was really the only way for the transaction to proceed. Had we been set on being the ones driving the deal, it would have been hard to move forward.

When trying to agree on an ownership structure, you need to have a plan that aligns with your acquisition strategy. We didn’t walk in thinking we would be sold, but we had a business strategy built around growth that we knew would include future transactions.

Working with the experienced dealmakers at NFP, we got to see what it would be like to have them behind us as we pursued our future growth plans. They brought excellent transaction capabilities, significant capital for growth, and an approach that would let us run our advisory business the way we thought best. For us, partnering with NFP meant committed long-term capital to support the ongoing development of our wealth management business.

By applying the lessons that we learned as a seller in 2019, we entered 2020 better positioned to succeed as a buyer. Our goal is to grow both organically and through acquisitions, all the while maintaining our strong client retention rate.

But we won’t grow just for growth’s sake; we will only grow if it makes sense for our clients and our employees. When we do, we will seek like-minded firms willing to collaborate and succeed together. We’ve invested in and built a strong narrative around the unified brand Wealthspire Advisors. We plan to use our scale to become more efficient, to create better outcomes, and embrace more opportunities to serve clients and have a lasting impact on their lives.


Mike LaMena is CEO of Wealthspire Advisors, having joined the firm in September 2017. Hoyt Stastney is General Counsel and head of M&A for the firm. He joined in 2016. Today Wealthspire has $10 billion under management.