Mercer Hires M&A Exec for 'Next Chapter of Our Growth'

In an interview with ThinkAdvisor, Motheral explained how Mercer’s M&A work fits into the $70 billion RIA’s culture, recruiting efforts and growth plans.

Here are highlights of our conversation:

THINKADVISOR: Could you tell us why you decided to make a jump to Mercer?

TED MOTHERAL: I've been a private practice attorney in the M&A and financial advisory space for about 18 years. I’ve represented a lot of buyers and sellers, know a lot of the players and know the market very well.

The main reason I took this job is that Mercer's just an exceptional firm. They're the gold standard when it comes to registered investment advisors.

They also have an exceptional leadership team that’s young and dynamic. I thought it was a good opportunity for the next step in my career and probably an opportunity that doesn't come across anyone's table every day. I really love the team here and their strategy as it relates to M&A.

Most importantly, I love their culture and their family office services. They're really trying to create better value for their clients — better professional value for each financial advisor who's a fiduciary on their platform.

Mercer ticks a lot of boxes for me.

How does Mercer work on recruiting vs. M&As as part of its growth as an RIA?

Mercer does both and is also really focused on organic and inorganic growth.

The first value proposition we give is that we're going to give greater value to your clients. We have a family office base of products and services that most other firms do not have. That's the value we're going to create from an organic standpoint.

We say, “Hey, financial advisor, come onto the platform. We're not only going to help you grow your team and establish your generation two and your generation three and help them to grow, but we're [also] going to create more value for your clients. That is going to increase your organic growth naturally.”

For inorganic growth, we have a pipeline of M&A deals … and really those deals are, just like everything that we do here, based on culture. We want a good fiduciary advisor who fits with the culture of providing exceptional services to their clients under [our] umbrella.

That’s the long-winded answer of saying “yes,” we are actively looking at both organic and inorganic growth.

How does Mercer help advisory firms grow both organically and inorganically after it acquires them? 

[After a deal] we say: “How are we going to help you continue to grow your organic platform? How are we going to help you continue to grow your inorganic platform by combining with other financial advisory services firms?”

We want to make sure that your generation two and your generation three are growing their own respective practices from an organic standpoint.

One of the biggest things that’s a differentiation point for me, is that the deal isn't over when the deal is over. We really come in and integrate the team.

How are we gonna help you continue to grow? How are we gonna help everyone on your team and their careers to continue to progress? How are we gonna help your clients have greater value with our gamut of family office services?

It really is a three-dimensional process that’s more than just, “Hey, we're gonna acquire you, you get a big price, you get a big check and you just keep doing what you're doing.”

Along with helping advisory firms strike their own deals (at the local, regional and national levels), how else does Mercer support its advisors?

Mercer can work to facilitate not only an acquisition [made by] your firm, but we can make an acquisition ourselves, partner those firms and create a plan where you're capturing a lot of the organic growth within a [particular region].

As it relates to our partner firms, we're very transparent up front in the process and say, “This is how we see this going. This is how we would want to integrate you into our practice. This is how we would want to grow our practice.”

We have detailed plans [and ask], “How are you going to fit into our culture and our model? What is our short-term and long-term plan for your company?”

That is really attractive to me because it really drives up from the top: How do we make your clients better valued? How do we make your clients the best that we can? … How do we make you the best fiduciary financial advisor that we can?

That integration process is incredibly important across the board for the financial advisory services firms and groups that we acquire.

With great clients, with great teams, we're coming in there and not trying to create a better mousetrap.

We're saying, “Here are the additional ways through partnering with us that we can create more value and wealth for your clients. We can create best-in-class service and more career expansion for your advisors. And we can take you to the next level [through] a partnership with Mercer.”

How competitive is the M&A pipeline in the advisory business?

It's a competitive market right now. Everyone's looking to continue their inorganic growth, there are a lot of people looking to sell, and there are a lot of microeconomic parameters to that.

You have 60% of this industry set to retire in the next 10-12 years. So people are starting to think about their succession plans and say, “I want to take advantage of these high multiples."

We provide a lot of pluses where we are winning deals and we can win [more] deals. At the end of the day, there are the economics that we provide and really the services that we provide.

We provide the platform for the business growth to advisors and advisory groups. So it's a really exciting time to be in this space.

What’s next for you and your role at Mercer?

[With Martine Lellis], we want to … mine all of our contacts in the space and create a more robust department where we can handle our current pipeline and continue to increase that pipeline as well.

I'm really excited about the opportunity. I think Dave Barton, the initial head of M&A at Mercer, was a trailblazer. He did amazing things here.

Our CEO Dave Welling is a real visionary. Daniel Gourvitch, our president, and [others] are looking to create a young, dynamic team. That is going to be kind of the next chapter of our growth here at Mercer Advisors.