Firm acquisitions are not rare. According to ECHELON Partners, there were a record 354 RIA mergers and acquisitions in the United States in 2023. That number has grown nearly every year for the past decade. If you haven't experienced one yet as a client, there's a reasonable chance you will.
The question most clients ask first is whether they have a choice. The answer is yes. Your accounts are yours. You can leave at any time. The more useful question is whether you should.
That answer depends on three things: whether your advisor is staying, whether the acquiring firm's approach matches what you valued about your relationship, and whether the terms of your engagement are changing.
Your Advisor's Status Is the First Thing to Check
Most firm acquisitions don't immediately remove advisors from client relationships. But not all advisors stay. Some were planning to retire anyway and sold their practice as part of an exit. Others disagree with the acquiring firm's culture or approach and leave within 12 to 18 months.
Find out directly. Ask your advisor: "Are you staying? For how long? And what does your role look like after the transition?" A clear, direct answer means the advisor has thought it through. Vagueness often means they're still figuring it out.
If your advisor is leaving, the calculus changes significantly. You're not experiencing a transition. You're effectively being assigned to a new advisor. Whether that new advisor is right for you requires its own evaluation.
What Changes After an Acquisition
Not all acquisitions change what clients experience. Some are entirely transparent. Others shift the fee structure, the investment philosophy, the service model, or the technology platform. Here's what to evaluate:
Fees. Are your current fees locked in? For how long? Acquisitions sometimes result in fee restructuring after a transition period. Ask specifically whether your current fee agreement is being honored and for what term.
Investment approach. Some acquiring firms have model portfolios or preferred investment strategies they transition clients into. If you chose your advisor partly because of a specific investment philosophy, find out whether that philosophy continues or whether your portfolio is being repositioned.
Service model. Who's your primary contact? Is that changing? Are review frequencies or planning deliverables changing?
Technology. Client portals, reporting formats, and account access tools often change in acquisitions. This is lower-stakes compared to the others, but worth knowing.
Jeff Judge at Chesapeake Financial Planners doesn't sugarcoat this: "Staying with a firm after an acquisition isn't a foregone conclusion. It depends on whether the acquiring firm has a compatible approach to the one you had. If the culture and investment philosophy shifted, it's worth asking questions before you assume continuity."
The Indicators That You Should Consider Leaving
Staying is often the path of least resistance. But these are signals that a transition might serve your interests:
Your advisor is leaving and you don't have a pre-existing relationship with the assigned replacement.
Your fee structure is increasing materially in the first year after the acquisition.
The acquiring firm uses a model-driven investment approach and your previous advisor used a customized one, and that customization was important to your plan.
You're experiencing decreased service responsiveness or shorter review meetings.
You have concerns about the acquiring firm's regulatory history. Check FINRA BrokerCheck for any complaints or regulatory actions.
The Indicators That Staying Makes Sense
Your advisor is staying, with the same role and the same approach to managing your relationship.
The acquiring firm is larger and offers services you didn't previously have access to, like estate planning coordination, tax advisory support, or institutional investment options.
The fee structure is unchanged or clearly benefits you through scale or service expansion.
The transition was handled transparently, with direct communication to you before the close.
What the R.U.D.D.E.R. Method™ Means for Acquired Clients
At Chesapeake Financial Planners, when clients come to us after another firm's acquisition didn't meet their expectations, we start with what actually happened. Not what they were promised. What their plan says, what their accounts look like, and what the gap is between where they are and where they wanted to be. The R.U.D.D.E.R. Method™ is built around that kind of specific, situational assessment.
If you're evaluating a transition, schedule a no-obligation conversation with Jeff. You don't have to commit to anything in that meeting.
Question-Answer Pairs
Q: Do I have to accept the new firm after an acquisition?
A: No. Your accounts are portable. You can move them to another advisor or custodian at any time. Some products like variable annuities or illiquid alternatives may have surrender charges or restricted transferability, but your advisory relationship is always your choice.
Q: Will my financial plan be honored after an acquisition?
A: The plan document transfers with your account, but whether the new advisor follows it depends on how well the transition was managed. Ask specifically what the new advisor has been given and reviewed before your first meeting with them.
Q: Can I take my advisor with me if they leave the acquired firm?
A: Yes, with some restrictions. Advisors are subject to non-solicitation agreements that vary in scope. Your advisor cannot solicit you to follow them. But you can proactively ask where they're going and make your own decision to move.
Q: What should I do first when I hear my firm is being acquired?
A: Request a meeting with your current advisor before the close. Ask the specific questions above. Get answers in writing where possible. Then evaluate based on the actual answers, not the acquisition announcement.
The information provided is for educational purposes only and should not be construed as investment advice. Investment strategies should be tailored to individual circumstances, risk tolerance, and goals. Past performance doesn't guarantee future results. Consult with qualified financial professionals regarding your specific situation.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Great Valley Advisor Group, a registered investment advisor and separate entity from LPL Financial.
Chesapeake Financial Planners | 2402 Scotlon Ct, Forest Hill, MD 21050 | (410) 652-7868 | www.chesapeakefp.com
