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A roll-up exec talks about owning a roll-up and calls out his fellow entrepreneurs to focus on genuine distinctions

There are private-equity backed consolidators and RIA aggregators, and subspecies of each of those, but we can call them all roll-ups

Author Guest Columnist Matt Cooper November 13, 2012 at 4:32 AM
1 Comment
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Matt Cooper: I was aggressively criticized by the CEO of what I called a roll-up for describing his firm as a private-equity-backed consolidator/roll-up.

Neil Simon


Matt Cooper

Elmer Rich III

Elmer Rich III

November 15, 2012 — 6:47 PM

Very good piece and compliments to Riabiz for engaging with this topic. It is perhaps one of the most important topics in the country (world?) today — How will people’s life savings and wealth be transitioned inside of advisory firms?

Demographics is predictable and destiny.

1) Vast amounts of wealth are accumulating with investors and inside , mainly, DC plans. These are insti-individual accounts. That is long-term accounts that need institutional level advisory services but held by individual investors. ONLY advisors are set-up and available to handle these assets. Even inside a bank or large institutions some advisor will have to handle the account. Even with small accounts and automatic management some advisor-based kind fo service model will be used — if automated.

2) The number of advisors is increasingly shrinking due to aging of the majority of advisors. Who will service these growing sized and number of accounts in the future? BTW, the future is already here.

These are just two of the hard facts that the industry, as a whole, have to face and find solutions to.

Let’s propose this – the name calling is irrelevant and a distraction to problem-solving

1) Advisor support, organization and services will have to be consolidated. What’s the alternative?

2) The advisory business is very different from other verticals since it is so highly regulated and technical

3) Critical post-deal operational challenges have not been given the priority needed to succeed – for everyone. Post-deal operations needs to be a C-suite priority and set of expertise.

I’ll stop here. Finally, there is good research that acquisitions, and not organic growth, is the best way to grow. So acquisitions should be on everyone’s strategic planning agenda.

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