Neil Simon's "The Odd Couple" asks the question: "Can two divorced men share an apartment without driving each other crazy?" In a similar vein: Can two FAs competing in the same market merge practices without cramping each other's style?
For years, independent advisors Barbara Archer and Carol Rogers were strong competitors in St. Louis, Missouri. Now they've combined forces to form HighTower St. Louis, they told ThinkAdvisor in an interview. Assets under management: approximately $750 million.
The two met 15 years ago at a conference for successful FAs and were simpatico from the start. Over time, the friendly competitors shared business ideas even as they vied for clients in the same city.
Both Barron's multi-top-listers, the advisors are far from an Odd Couple. Each had her own practice for decades that focused on high-net-worth and ultra-high net worth individuals and business professionals — and both had a thirst to grow, which chiefly drove the merger. They likely face challenges in their new venture; but that doesn't faze this fearless duo, who, separately, have flown airplanes and parachuted out of them.
Rogers, 68, started out at E.F. Hutton, where she rose to become a member of Chairman's Council. After 10 years at the firm, in 1986 she went independent to found the predecessor to Rogers & Co. Wealth Management. LPL was her broker-dealer for 17 years.
Archer, 62, formed Archer Wealth Management in 1983, specializing in serving high-net-worth families and executives. Her BD for about 20 years was NFP. Prior to entering financial services, she was a reliability engineer with General Motors and Ralston Purina.
The merger became effective in April, and the HighTower St. Louis team of 12 is serving four generations of more than 700 families and individuals in 42 states and six countries.
In a phone interview, the two advisors discussed why they merged, why they chose HighTower and what their expectations are for the combined firm. Here are highlights from our conversation:
THINKADVISOR: You're both strong, independent women and were competitors. You each had individual practices for decades. What's the biggest challenge about merging businesses?
CAROL ROGERS: Who's in charge.
Who is?
BARBARA ARCHER: We're breaking up responsibilities and are co-managing partners. That can work for or against us, But [it helps that] we've known each other for so long.
CR: We're working with a business consultant who's a psychologist and discussing how we work together and what our strengths and challenges are. He did the same with both our teams. We'll work with him ongoing. We're doing this so that we understand one other and to help us work as one team.
Why do you feel you need that help?
CR: It's a critical part of merging two teams because Barbara and I are a little territorial about the way we do business and how we treat our clients. But the culture of the two teams is so identical that it's heartwarming. The merger will work only if we build a truly combined practice and make sure there's continuity of clients and teams. We're serving each other's clients and have a system that lets us pull up our notes on all of them.
BA: Our cultures are similar in that they were team-driven, client-service focused and technologically forward. And they offered detailed planning advice and sophisticated investment strategies. [But] there were some cultural differences. From my standpoint, these were [people's] jobs. And now, those [including Carol's and mine] may change somewhat.
How do you two complement each other?
CR: Barbara is more business-detailed, which I find extraordinarily attractive. She has a lot more energy than I. She spends more time at the office. But now [with the merger] she won't spend as much time. I'm also buying her a book called "Relax."
BA: We'll see if I'm trainable in that regard! Carol is a terrific creative mind on ways to serve our clients and engage new clients. Carol is nicer. I'm the P&L gal. I won't let her near paperwork!
How do you adjust to joining HighTower because both of you were independents for so long?
BA: HighTower allows us to continue to be independent. We get to be "intrapreneurs" instead of entrepreneurs.
Does HighTower have equity in your practice?
BA: They have some equity in [us], and [we] have some equity in them. HighTower is advisor-owned, which is why [all the FAs] are very collaborative.
How is your compensation structured under the merger?
CR: We'll maintain each of our P&Ls as it exists today for the next four years. But any new clients immediately become our combined clients.
BA: It's a one-team approach. We're not holding these businesses that we built for the past 30-plus years close to our vests. And we'll train any new young advisors that this is a team concept.
Ms. Archer joined HighTower in August of last year, but the merger with didn't take place till this April. Please explain.
CR: This [merger] has been a collective, planned effort. The decision was to do this simultaneously; and I was already in the process [of selecting a BD], which was a very time-consuming process.
BA: Carol knew I was searching for a new home and would say, "Tell me who you love."
CR: But I was looking at HighTower from an independent side. HighTower allows people to join them independently or an on equity basis. When I found that Barbara was joining on the equity side, I came to a screeching halt and completely changed my approach. Barbara just got her toe in the water a little faster. Our teams said to us, if you're both looking at the same firm and have talked about this forever, let's do it."
BA: I hired an investment banker to make sure I was with the right [BD] for growth strategy. Carol didn't use an investment banker. She did it on her own, so it took her a little longer.
Describe your due diligence.
