Fit Above Everything Else - M&A Playbook

The biggest mistake that I see people make–the single biggest mistake–when they are in pursuit of an offering that we have on the open market, is they position themselves as a great practice, they don't position themselves as a great fit. Really not understanding what fit is and just thinking I can afford this practice and I'm 50 miles from it. And while those things can be important, there are other things that are critical in what fit is and what goes into us finding the perfect fit.

There are BD and custodial relationships that need to kind of have some synergy. Capacity is a huge issue. I see people confusing the ability to afford a practice with the ability to absorb a practice. If you're a sole prop that has 500 households, I know you can afford the practice for sale. But how are you gonna absorb the other 250 households that the seller is selling? Personality, cultural fit–especially in Sell & Stay. Is this somebody that you're compatible with investment philosophy, revenue stream, all those different kinds of things? You could be the greatest practice in the world and if a seller is asking for, say, at least one female CFP on staff and you don't have a female CFP on staff, you're not a good fit.

It doesn't matter how much money you have what you can afford, what your offer is, if you're not a fit you're not a fit. And offering more money is only relevant if you are a fit. We are looking for the best fit period. Doesn't matter where they come from, doesn't matter who they are, it matters that they're the best fit.

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