David DeVoe, Schwab's RIA M&A chief, leaves to start his own shop

Brooke’s Note: If the chief financial officer of company leaves his position, it’s a bad sign. But when the executive at Schwab with his finger on the pulse of M&A for RIAs leaves — to do RIA M&A — there seems to be hope that the long, long, long awaited merger boom may finally arrive.

David DeVoe left Schwab two weeks ago and has launched an M&A consulting business.

The managing director of strategic business development at Charles Schwab Advisor Services left the San Francisco-based RIA custodian two weeks ago after being fully present at Schwab IMPACT 2011 and heading up a well-attended session. See: RIAs reveal their M&A war stories with 200 Schwab IMPACT attendees.

Hands on

The departure of DeVoe, 44, comes after nine years with Schwab — eight of them as its chief of RIA M&A and succession planning. Though he liked his position, he had grown antsy about taking a more hands-on role with deals.

“For good reasons, Schwab wants to stay out of the transactions but the opportunity to engage actively throughout the entirety of the deal is really compelling,” DeVoe says.

Schwab mostly provides consulting, matching, educational and research services to RIA principals looking to buy or sell practices.

Schwab Spokeswoman Susan Forman says he company wishes DeVoe well in his new venture and she says it’s possible her company could still do business with him. DeVoe’s boss, Nick Georgis will absorb DeVoe’s duties on an interim basis but also possibly for the long haul, Forman adds.

Aggressive scaling

DeVoe has started his new practice, DeVoe & Co. Inc, largely as solo practitioner with a desk in downtown San Francisco and he’s relying on his own capital rather than relying on any outside investors. His humble start is not any indication of his ambitions. “I have plans to scale this — hopefully pretty aggressively.” He is not the first to start an M&A shop. See: Jefferies & Co. deletes the Putnam Lovell brand but three former bankers are betting on an M&A resurgence in wealth management.

DeVoe sees tremendous opportunity in the industry considering that 70 deals were done in 2010 and that more are expected this year. He believes that the market for selling firms with assets of $2 billion and more is pretty locked up by firms like Silver Lane and Berkshire Capital. See: M&A market reaching a new normal based on RIA-driven deals, say competing reports from Pershing, Schwab.

“There’s a growing opportunity south of that,” DeVoe says. The big difference from even a few years ago is that big firms are gaining sophistication as buyers proactively make deals as a means of growth.

Starting out in retail

DeVoe hits the ground running with a buyer with about $2 billion of assets that is currently working on two deals to acquire frims with about $100 and $130 million of AUM.

DeVoe considered joining an existing firm but wanted the control to do things in his own way. He has contracted with an investment banker that he believess will allow him to scale his business without increasing overhead.

DeVoe got his MBA from Cornell University and he also had a brief career as an entrepreneur during his time as an undergraduate at the University of California at Berkeley. It was a clothing company that sold baggy surf pants and shirts to surf shops. Before the company ran its course, it had sold $70,000 of goods and counted Nordstrom’s among its clients.

See: Fidelity races to develop M&A program ahead of looming merger boom.