M&A Evolving in the RIA Industry


Recorded at the BNY Mellon | Pershing INSITE 2022.  Media Center Powered by:

Advisorpedia interviewed Jim Dickson, CEO & Founder of Sanctuary Wealth, at BNY Mellon | Pershing INSITE in June, 2022.

Related: How Pershing X is Going to Help Advisors

Resources: Integrated Partners | Flyer Financial Technologies | Sanctuary Wealth


SPEAKERS: Shannon Rosic, Jim Dickson

Shannon Rosic  00:05

M&A continues to evolve in the RA industry. I'm joined by Jim Dickson to learn more. Jim, welcome.

Jim Dickson  00:13

Thanks, Shannon. It's great to be with you. Absolutely. So

Shannon Rosic  00:15

Obviously a broad topic M&A. So let's break it down a little bit. . .

How have you seen this space evolve?

Jim Dickson  00:23

You know, I think it's evolving as both buyers and sellers get more educated and as it gets more mature as an industry, but I think the real evolution is the baby boomers right? At the end of the day, there's more and more people that are appointed, they want to sell their practice, and they want to move on in their lives. And so I think, you know, while the market is a little turbulent, and you're seeing some crazy things going on, you're actually seeing that accelerate the pace of some of the m&a. So that's sort of surprised me, but it's, it seems to be picking up.

Shannon Rosic  00:48

I want to look at the rest of the year and maybe into 2023. How do you see maybe the space shifting? Or What trends are you following there?

Jim Dickson  00:56

So let's put ourselves in the buyers shoes for a minute. And I think the buyer is looking for quality, right? And the seller is saying to themselves for the first time, hey, we had this bull market for 12 years, things were pretty good. And now the markets going down? Do I want to sell now and beat the market going down? Or do I want to wait it out. And so I think there's a little bit of tug of war going on between sellers in their mind right now. But what we're seeing over the last, let's call it 3060 90 days is more and more people that are testing the waters. And so I think 2022 is going to be strong. But I think 2023 is going to be a record year really.

Shannon Rosic  01:29

What's ultimately driving that beyond just kind of the market volatility that we're seeing now.

Jim Dickson  01:34

Well, I think you know, and I don't mean this to be disrespectful to any advisor. But it's been easier, not easy. The business is never easy. It's been easier. You know, every time you sit down with a client did a client review, it was good news, right. And so now that's starting to change a little bit, you'll have to have some hard conversations, you have to work a little bit harder. And I think some people are just doing a good long look inside and saying, you know, I want to travel, I want to do things that I thought about doing in retirement. So I think it's a retirement play. I really do. And so I think people are starting to say, Okay, this, this process takes a little while. Let's get it started. Let's start having conversations. And so we're seeing more activity, which usually leads to more m&a and more deal flow.

Shannon Rosic  02:11

And how is Sanctuary? Well, specifically helping advisors navigate through the M&A landscape?

Jim Dickson  02:16

You know, we've got a team of advisors all over the United States, right? I think we're in 24 states now. And so we're able to put in front of them a plethora of teams to say, what's the right fit, because one thing about advisors is they love their clients, and they care about him, right? And so if they're going to retire, they're going to pass them on, they want to pass them on to somebody who's not only good, but thinks looks and treats the clients like they do. And so I think what Sanctuary is able to do is give them a wide swath of options to say, hey, look, is this the right fit for your client? Are they going to treat them like you always have? And I think from a seller's perspective, they really like that.

Shannon Rosic  02:49

And what is an advisors biggest challenge when it comes to M&A? You know, but they're just thinking about getting started, it can be kind of overwhelming.

Jim Dickson  02:56

It's very overwhelming. And I think, honestly, you need a partner to help walk you through it. Because it's complex, right? And you're doing things you've never really talked about or thought about. It's also incredibly emotional. And I think people forget that, right. This is your life's work that you're monetizing. And so as you think about that, sometimes emotions can get in the way. And so you know, what we see is slow down, have a trusted partner, and and sort of build a plan, right? That way, when any deal kind of gets a little rocky, and they all do. You know, you can sort of get back to this, this this calm place and, and work through that plan and make sure it's right for you. And, you know, the other thing I would just say is don't be in a hurry. You know, it's not about getting it fast. It's about getting it right. And I say that because right now, with the turbulence in the market, I see people rushing, I gotta get this done. I gotta beat the market. The market to go up and down as it always has, you know, find the right partner, find the right deal. And make sure you're comfortable with who you're either going to work with for a while or who you're selling your business to.

Shannon Rosic  03:50

Well, that is fantastic advice, Jim. Really appreciate your insight.

Jim Dickson  03:53

My pleasure. Thanks for having me.

Shannon Rosic  03:54

Absolutely. For Advisorpedia. I'm Shannon Rosic.