PLANADVISER - July/August 2021 - 40

growing your practice / Q&A
Dick Darian
CEO of Wise Rhino Group talks M&As
IT MAY SEEM counterintuitive, says Dick
Darian, CEO of Wise Rhino Group, a retirement
adviser mergers and acquisitions (M&A)
advisory firm, but many of the practices with
the highest revenue, best margins and strongest
capabilities and brands are also the ones
that have gone to market to seek partners.
Wise Rhino Group, whose offices are in
Charleston, South Carolina, and Lake Tahoe,
Nevada, has represented more than 60 sellside
and buy-side retirement firms in its
first three years. In the process, Darian has
found " it's actually the firms that are the most
successful and resilient-that could survive
and thrive as independents-that are merging
their businesses. " In a recent conversation
with PLANADVISER Managing Editor Judy
Faust Hartnett, he shared more insights into
today's industry consolidation.
PLANADVISER: What are the key considerations
for a retirement plan practice when
it's evaluating whether to pursue a merger or
acquisition?
Dick Darian: The first step for retirement advisory
firm leadership is prioritizing the " business
side of their firm, " beginning with building
a process for clarifying the best strategic alignment
for the firm partners, staff and clients.
We've found that often the challenge here is
helping talented retirement advisory entrepreneurs
understand that the evolving broader
marketplace may require a change to the very
approach that has led to their success.
The next step is to identify the different
go-forward options or paths-status quo,
merger, acquisition, sale to a partner-and
work toward " predicting the future " by using
available data and insights, and project where
each path will lead the firm in key areas such
as culture, practice and financial.
If a firm decides to seek a partner, we
suggest that it focus on the " table stakes " that
best align partners, staff and clients with
regard to leadership, vision and commitment
to the business. This includes growth engine
capabilities; operating company and practitioner
platforms; participant engagement;
industry, plan sponsor and participant brand;
potential for partner and staff role-expansion;
and proven post-merger integration experience.
Under each of these criteria, there are many
important questions that need to be answered.
For example,
the monetization of the plan
participant will be critical to the revenue
growth component for most retirement advisory
firms in the not too distant future. It's
important to go deep with a potential partner
to gain an understanding of that firm's commitment
in this area and, importantly, its progress
regarding platform technology and participant
services, as well as wealth advisory.
PA: Do you have a sense of what the acquired
companies' experience has been?
Darian: We conduct formal post-acquisition
surveys with our clients after one year and
then after three years post close. The results
reflect that most partner-acquirers have met
the expectations of the advisory firm sellers.
One of the most positive areas is client
growth, especially within the insurance
brokerage firm vertical where the benefits
and property and casualty cross-selling has
been highly successful.
On the registered investment adviser
[RIA]- acquirer side, we've seen significant
positives in terms of helping to build a bridge
from the acquired firm's retirement business
through advice and/or managed accounts
to engage the participant toward broader
wealth advisory services.
PA: What have the challenges been for the
acquired firms?
Darian: Before merging with a larger partner,
most retirement advisory firm entrepreneurs
have run their own independent business
for many years, with no reporting responsibility.
There is certainly a change when you
now have a " boss " again. However, most of
the acquiring firms do not micromanage the
day-to-day activities of each office. They have
bought the business to assist with strong
growth, so the attitude is " Keep doing what
you're doing, " and " How can we help? "
On the practice support side, it very much
remains a work in progress for the acquiring
firms building out the necessary scaled platforms
to engage and monetize plan participants
as to advice, managed accounts and
wealth advisory.
" ... most
partneracquirers
have
met the
expectations
of the
advisory
firm sellers. "
40 | planadviser.com July-August 2021
http://www.planadviser.com
PLANADVISER - July/August 2021

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