“Deal advocacy offers an alternative to either negotiating directly with a buyer or hiring a traditional sell-side advisor, emphasizing the necessity of this cultural match. In deal advocacy, our approach focuses on identifying and matching the right buyer, which is essential”
Allen Darby,
Alaris Acquisitions
“Alaris added significant value by focusing on this cultural connection, ensuring that Kurt, Gina, and their team not only completed a fair and beneficial transaction but also positioned themselves well for future success as part of Dakota”
Bryan Keller,
Dakota Wealth Management
In Partnership with
Deal advocacy: Redefining M&A in wealth management with Alaris Acquisitions
Beyond the highest bid: how Alaris advocates for cultural fit and strategic partnerships in mergers and acquisitions
Read on
Allen Darby
Alaris Acquisitions
Kurt Durrwachter
Dakota Wealth
Bryan Keller
Dakota Wealth
Christopher Lee
MFAA head credit adviser, Finsure Finance and Insurance
Industry experts
USING A financial auction to find the highest bidder for your wealth management firm is easy. What’s tougher, and arguably more economically beneficial in the long run, is ensuring a cultural fit. Yet, many advisors in wealth management transactions prioritize securing the highest financial offer for sellers, rather than aligning them with the right partners.
The traditional M&A route often uses a financial auction, where buyers are encouraged to bid with minimal interaction with the seller, potentially leading to mismatches in company culture and values. Alaris Acquisitions disrupts this model by prioritizing “cultural fit” through understanding and aligning the core values and operations of the buying and selling firms from the outset.
In a recent session hosted by Greg Greenberg, the spotlight was on Alaris Acquisitions and its innovative deal advocacy process. With key insights from Allen Darby, CEO of Alaris Acquisitions, along with firsthand accounts from Kurt Durrwachter, historical CEO of the selling company, Ledge Wealth Management, and Bryan Keller, chief strategic officer of the acquiring firm, Dakota Wealth Management, involved in a notable successful transaction, this discussion unveiled the unique strategies that differentiate Alaris from traditional M&A processes.
One can hope to achieve a cultural match between buyers and sellers only if you know the buyer. This model requires the sell-side advisor to delve into understanding the buyer’s model –analyzing their history, team, and mandatory alignment points such as client experience, investment platform, and technology stack. This comprehensive understanding is crucial for a seller to assess whether they would be content at the buyer’s firm. Capturing and cataloging all this buyer data is a significant challenge, but their years of experience have equipped them for this task. Alaris has conducted this analysis for its 67 buyers in its network.
Rather than conducting a traditional financial auction, their approach of deal advocacy allows them to conduct a cultural auction. They guide sellers through an educational phase,
Darby, drawing from his extensive experience in the wealth management industry and previous ownership of an RIA, shared how Alaris assists owners in navigating the complex M&A terrain. Alaris’ deal advocacy approach centers around finding an ideal partnership rather than just facilitating a transaction. This process emphasizes cultural compatibility and strategic alignment over mere financial transactions.
Darby says, “As M&A advisors, our role involves helping sellers find an ideal partner. We use the term ‘partner’ deliberately because, in most acquisitions, sellers like Kurt and his business partner, Gina, aren’t looking to exit the business. The quality of life after the transaction is paramount. This is based on the reality that, if you ask Bryan, Kurt, or any other buyer or seller, the most critical aspect of the deal is achieving the right cultural fit.
“Deal advocacy offers an alternative to either negotiating directly with a buyer or hiring a traditional sell-side advisor, emphasizing the necessity of this cultural match. In deal advocacy, our approach focuses on identifying and matching the right buyer, which is essential. We deliver value to sellers primarily through education about the market, explaining the basic models, and providing an overview of potential buyers and what they offer. There’s also a significant emphasis on helping sellers organize their data in a way that is appealing to buyers.”
organizing data, which culminates in their buyer discovery meeting. Here, they present their findings on how the structural realities of their business and partnership preferences align with potential firms.
Alaris uses a technology called the Lens Application, which algorithmically identifies matches between sellers and buyers, providing a more objective basis for compatibility. This process ensures that only culturally aligned buyers are invited to participate, fostering a better match. There’s little reason to invite firms that do not match culturally to bid on the practice.
Durrwachter emphasized the emotional and strategic challenges of selling a business he and his partners had built over many years. His decision to engage with Alaris was driven by the desire for a partner who could understand and respect the legacy and culture of his firm, rather than just the financials.
He details, “We went down some long, bumpy roads, with some firms that we thought would be great. However, it became evident that these firms were not suitable acquirers. The realization hit us that we were novices in selling, just as they were in buying. While we managed to find some good cultural fits, advancing the rest of the deal to completion proved exceedingly difficult.
“Exhausted from these efforts, my partner Gina and I reached a point where we could no longer endure another year of negotiations with a single firm. Disenchanted with the auction process and seeking a very specific type of company – one that would allow us to convert equity from our firm into the new entity to foster growth without sacrificing all our gains – we felt overwhelmed.
“After exploring various options and interviewing numerous traditional investment banks, we discovered Alaris. A call with Allen from Alaris quickly revealed that they were fundamentally different, offering a fresh perspective and approach.”
On the buyer side, Keller appreciates the transparency and pace of the Alaris process. When Darby and his team were introduced to Dakota Wealth Management, they quickly became enamored with the disruptive model he presented, which was much needed in their space. It allows them to quickly ascertain who and what they are dealing with from the buy side of things.
In the process Alaris ensures a thorough educational phase where sellers like Durrwachter could deeply understand potential buyers.
“The biggest surprise was how much Allen emphasized their depth of knowledge about the buyers, and he shared that insight with me too,” Durrwachter says. “Initially, I thought, ‘Okay, great, they know the buyers,’ assuming other advisors
knew just as much. But as we got deeper into the process, the extent of their knowledge was truly surprising. They really knew everyone on their list, which brought a sense of comfort.
“To Bryan’s point, this depth helped us speed things up, which was exactly what we needed. We weren't under a strict deadline to sell, but we were exhausted from the process. It was reassuring to go through a process where Allen could answer every question I had.
“He didn’t need to call the firm to check on whether they would let us manage our own money our way, whether we could roll equity, what their structure was, how long their involvement would be, if there was private equity involvement, if they had an internal CIO, or what their technology stack was like. They just knew it all. When we narrowed it down and went through Alaris’ process, which has even gotten better, and they sent us decks on firms like Dakota, it all came together.”
Keller finds there’s an eagerness in the industry to make the transaction happen. However, he points out, “The group at Ledge is still early in their careers, which made the transaction secondary to their future prospects over the next five, 10, or 15 years. The significance of their long-term goals far outweighed the immediate transactional details. If Kurt and Gina had chosen the wrong representative, they might have secured the same financial outcome but with a less favorable long-term impact, which is crucial for where they envision themselves several years down the line.
“Alaris added significant value by focusing on this cultural connection, ensuring that Kurt, Gina, and their team not only completed a fair and beneficial transaction but also positioned themselves well for future success as part of Dakota. Looking forward a decade, Kurt will likely reflect
more on what they achieved post-transaction rather than the transaction itself. The merger with Dakota is just one step in a larger journey, not the focal point.”
With Alaris, a favorable deal combines optimal economic valuation, the best cultural fit, and the best post-acquisition quality of life. These three factors together create what they consider the best deal.
Darby believes the industry should adopt this approach because it serves both parties well. Even though Alaris represents sellers, they advocate for a great outcome for buyers as well, aiming for ideal outcomes for both parties. Achieving this requires an incredible amount of work. Understanding the buyers doesn’t happen overnight; it takes about 30 to 50 hours with each one to delve into the nuances of who they are, what they are looking for, and what their advisor value proposition is.
Darby advocates for a shift toward an approach that values cultural fit as much as financial figures.
Alaris Acquisitions is a boutique M&A advisory firm that specializes in the wealth management industry. Today we are a team of 14 professionals with substantial expertise in assisting sellers (RIAs from $200 million in assets under management [AUM] to $10 billion in AUM) find “partners” – the buyers who best align to the needs and objectives of the owners, team, and clients of the seller. Our two founders, Allen Darby and Jacqueline Martinez, have a well-established reputation in the industry for getting the cultural fit right without sacrificing the monetary aspects of the transaction.
Find out more
As the CEO of Alaris Acquisitions, Allen Darby helps owners of wealth management firms navigate the complex and competitive landscape of mergers and acquisitions. Darby has spent his entire career in the wealth management industry. Most notably he owned his own RIA for 20+ years, where he served high-net-worth and ultra-high-net-worth families, as his RIA provided investment advice, financial planning, and estate tax assistance. He has a deep understanding of the challenges and opportunities that RIAs face, and how to create win-win scenarios for both buyers and sellers.
Alaris Acquisitions
Allen Darby
Kurt Durrwachter, a seasoned professional with over 24 years of experience in the financial industry, is the managing director and senior wealth advisor leading Dakota’s Sartell, Minnesota, office. Kurt brings a wealth of experience managing teams and cultivating client relationships. Kurt’s entrepreneurial spirit led him to launch Ledge Wealth Management in 2010 with 40 clients and $12 million in assets. Over the course of 13 years, he successfully steered the firm to merge with Dakota, bringing in over $400 million in assets for more than 300 families and servicing over 2,000 plan participants, including managing more than $200 million in retirement plan assets.
Dakota Wealth
Kurt Durrwachter
Bryan Keller joined Dakota Wealth as a founding partner in 2018. His role is focused on Dakota’s merger & acquisition efforts, investment policy, portfolio management, custodian and trading platforms, and ensuring a superior client experience. Keller’s professional career started with Kobren Insight Management, a $1 billion AUM investment advisor, where he worked directly under the firm’s chief investment officer, helping to analyze and review manager and fund selection, and contribute to key investment policy decisions.
Dakota Wealth
Bryan Keller
Bryan Keller joined Dakota Wealth as a founding partner in 2018. His role is focused on Dakota’s merger & acquisition efforts, investment policy, portfolio management, custodian and trading platforms, and ensuring a superior client experience. Keller’s professional career started with Kobren Insight Management, a $1 billion AUM investment advisor, where he worked directly under the firm’s chief investment officer, helping to analyze and review manager and fund selection, and contribute to key investment policy decisions.
Dakota Wealth
Bryan Keller
“Deal advocacy offers an alternative to either negotiating directly with a buyer or hiring a traditional sell-side advisor, emphasizing the necessity of this cultural match. In deal advocacy, our approach focuses on identifying and matching the right buyer, which is essential”
ALLEN DARBY,
ALARIS ACQUISITIONS
“Alaris added significant value by focusing on this cultural connection, ensuring that Kurt, Gina, and their team not only completed a fair and beneficial transaction but also positioned themselves well for future success as part of Dakota”
BRYAN KELLER,
DAKOTA WEALTH MANAGEMEN
“Initially, I thought, ‘Okay, great, they know the buyers,’ assuming other advisors knew just as much. But as we got deeper into the process, the extent of their knowledge was truly surprising. They really knew everyone on their list, which brought a sense of comfort”
KURT DURRWACHTER,
Dakota Wealth
In Partnership with
Deal advocacy: Redefining M&A in wealth management with Alaris Acquisitions
Beyond the highest bid: how Alaris advocates for cultural fit and strategic partnerships in mergers and acquisitions
Read on
Christopher Lee
MFAA head credit adviser, Finsure Finance and Insurance
Bryan Keller
Dakota Wealth
Kurt Durrwachter
Dakota Wealth
Allen Darby
Alaris Acquisitions
Industry experts
USING A financial auction to find the highest bidder for your wealth management firm is easy. What’s tougher, and arguably more economically beneficial in the long run, is ensuring a cultural fit. Yet, many advisors in wealth management transactions prioritize securing the highest financial offer for sellers, rather than aligning them with the right partners.
The traditional M&A route often uses a financial auction, where buyers are encouraged to bid with minimal interaction with the seller, potentially leading to mismatches in company culture and values. Alaris Acquisitions disrupts this model by prioritizing “cultural fit” through understanding and aligning the core values and operations of the buying and selling firms from the outset.
In a recent session hosted by Greg Greenberg, the spotlight was on Alaris Acquisitions and its innovative deal advocacy process. With key insights from Allen Darby, CEO of Alaris Acquisitions, along with firsthand accounts from Kurt Durrwachter, historical CEO of the selling company, Ledge Wealth Management, and Bryan Keller, chief strategic officer of the acquiring firm, Dakota Wealth Management, involved in a notable successful transaction, this discussion unveiled the unique strategies that differentiate Alaris from traditional M&A processes.
One can hope to achieve a cultural match between buyers and sellers only if you know the buyer. This model requires the sell-side advisor to delve into understanding the buyer’s model –analyzing their history, team, and mandatory alignment points such as client experience, investment platform, and technology stack. This comprehensive understanding is crucial for a seller to assess whether they would be content at the buyer’s firm. Capturing and cataloging all this buyer data is a significant challenge, but their years of experience have equipped them for this task. Alaris has conducted this analysis for its 67 buyers in its network.
Rather than conducting a traditional financial auction, their approach of deal advocacy allows them to conduct a cultural auction. They guide sellers through an educational phase, organizing data, which culminates in their buyer discovery meeting. Here, they present their findings on how the structural realities of their business and partnership preferences align with potential firms.
Alaris uses a technology called the Lens Application, which algorithmically identifies matches between sellers and buyers, providing a more objective basis for compatibility. This process ensures that only culturally aligned buyers are invited to participate, fostering a better match. There’s little reason to invite firms that do not match culturally to bid on the practice.
In January, MPA held a roundtable discussion with four customer-owned banks: Heritage Bank, Beyond Bank, Teachers Mutual Bank Limited and Bank Australia. We were also joined by two brokers who use mutual banks for their clients’ business: Christopher Lee and David Merison.
As brokers such as these struggle with the greater scrutiny that has following the royal commission, customer-owned banks are stepping up to the plate, providing a service that highlights the value of human interaction. With questions around living expenses forcing a heavier workload on brokers, this personal touch can be vital.
During the roundtable, which took place at Otto restaurant in Sydney, the group discussed the unique value proposition that customer-owned banks offer, particularly with the lack of shareholders they have to cater for. While other
“The value proposition that mutual banks provide is getting some more attention,” he said. “We’ve known for a long time that the customer satisfaction that members get through mutual organisations is very high compared to the major banks. I think we’ve struggled to convert that into member growth, but more recently, with it being so front of mind with customers, it’s definitely starting to grow.”
Growth in the sector is giving the mutual banks their “time to shine”, said Beyond Bank head of third party Darren McLeod, adding that they had worked hard over the last two years on selling their proposition.
Referring to the previous year’s roundtable, when the catchphrase of the day was that the customer-owned banking sector was the industry’s “best-kept secret”, McLeod said, “I think that secret is finally getting out.”
“I don’t think we’re doing anything different,” he added. “We’re doing what we’ve always done, but there’s more customer uptake because the market’s in a place where people are now looking, and they’re willing to try it.”
Agreeing that the royal commission had had an effect on consumers heading to the mutual banks, Mark Middleton, head of third party at Teachers Mutual, said there was a growing groundswell. Not only were borrowers looking for alternative options but aggregators were adding more choice to their panels, he said.
Offering a different perspective, Middleton said consumers were becoming more aware of responsible lending and social responsibilities and asking about things like climate change. Teachers Mutual is not only carbon neutral but gives back around 6.8% of its net profits to community grants and other projects.
“It’s particularly topical right now, with the bushfires happening around the country, that people will start looking for who is doing things to make a difference, not just for this generation but future generations,” Middleton said.
“I think we’ve been actually ahead of the curve; no one’s been really aware of it, but the last 12 months it’s become more prevalent.”
Middleton also talked about the wider recognition the sector was receiving, as reflected in its high NPS scores.
“From all the mutuals around the table here, clearly when customers are being recommended by brokers to come to us, they’re voting with their feet,” he said.
McLeod agreed that a lot of the growth was coming out of the third party space.
“We’ve all been working hard in the broker space over the last couple of years as more brokers use customer-owned banks,” he said. “I think the growth is definitely in the broker channel and the work all of us have been doing in the business. The growth we’re talking about is definitely coming from brokers.”
Brokers have also been an important factor for Bank Australia. Senior relationship manager Fernando Lemos said the bank had been bolstering its support around the third party distribution space. He added that it was not only about diversification of products but also diversification of lenders, and this helped brokers cater for a wider client base.
“I think brokers are really starting to become aware of what we’re about and what we stand for,” Lemos said.
“There’s a marketing edge as well: they can go out there and promote themselves. They’re not just a line to a particular organisation; they can look after certain types of clients.”
Agreeing, McLeod added that the extra regulation, such as the caps on interest-only lending, had also had an effect on the sector.
“We all had to slow down for the caps,” he said. “But when it opened up, the brokers who used four lenders were now using a lot more, so it really gave us a chance because we’re in that larger group. So it’s really opened up the market, because it was so confusing in terms of who was doing what – who’s doing construction, who’s doing interest-only, who’s doing investment – so it’s opened up the market and it gives us a shot at getting the business."
One of two brokers joining the roundtable, David Merison from Vault Plus Mortgage and Finance Consultancy said the demographic of people looking to borrow money wanted choice, rather than relying on those who came straight out of the banks and were simply agents for those lender
“We’ve got to hold ourselves open and come up with some innovative solutions, and that means introducing some lenders they wouldn’t always think of,” he said.
Finsure Finance and Insurance broker Christopher Lee said his primary objective was to put the largest amount of money in his client’s pocket rather than the bank’s pocket, and the mutuals offered a cheaper alternative, as well as a more diverse product range.
Not just that but Lee simply enjoys dealing with the mutuals more.
Keller finds there’s an eagerness in the industry to make the transaction happen. However, he points out, “The group at Ledge is still early in their careers, which made the transaction secondary to their future prospects over the next five, 10, or 15 years. The significance of their long-term goals far outweighed the immediate transactional details. If Kurt and Gina had chosen the wrong representative, they might have secured the same financial outcome but with a less favorable long-term impact, which is crucial for where they envision themselves several years down the line.
“Alaris added significant value by focusing on this cultural connection, ensuring that Kurt, Gina, and their team not only completed a fair and beneficial transaction but also positioned themselves well for future success as part of Dakota. Looking forward a decade, Kurt will likely reflect
more on what they achieved post-transaction rather than the transaction itself. The merger with Dakota is just one step in a larger journey, not the focal point.”
With Alaris, a favorable deal combines optimal economic valuation, the best cultural fit, and the best post-acquisition quality of life. These three factors together create what they consider the best deal.
Darby believes the industry should adopt this approach because it serves both parties well. Even though Alaris represents sellers, they advocate for a great outcome for buyers as well, aiming for ideal outcomes for both parties. Achieving this requires an incredible amount of work. Understanding the buyers doesn’t happen overnight; it takes about 30 to 50 hours with each one to delve into the nuances of who they are, what they are looking for, and what their advisor value proposition is.
Darby advocates for a shift toward an approach that values cultural fit as much as financial figures.
Alaris Acquisitions is a boutique M&A advisory firm that specializes in the wealth management industry. Today we are a team of 14 professionals with substantial expertise in assisting sellers (RIAs from $200 million in assets under management [AUM] to $10 billion in AUM) find “partners” – the buyers who best align to the needs and objectives of the owners, team, and clients of the seller. Our two founders, Allen Darby and Jacqueline Martinez, have a well-established reputation in the industry for getting the cultural fit right without sacrificing the monetary aspects of the transaction.
Find out more
As the CEO of Alaris Acquisitions, Allen Darby helps owners of wealth management firms navigate the complex and competitive landscape of mergers and acquisitions. Darby has spent his entire career in the wealth management industry. Most notably he owned his own RIA for 20+ years, where he served high-net-worth and ultra-high-net-worth families, as his RIA provided investment advice, financial planning, and estate tax assistance. He has a deep understanding of the challenges and opportunities that RIAs face, and how to create win-win scenarios for both buyers and sellers.
Alaris Acquisitions
Allen Darby
Kurt Durrwachter, a seasoned professional with over 24 years of experience in the financial industry, is the managing director and senior wealth advisor leading Dakota’s Sartell, Minnesota, office. Kurt brings a wealth of experience managing teams and cultivating client relationships. Kurt’s entrepreneurial spirit led him to launch Ledge Wealth Management in 2010 with 40 clients and $12 million in assets. Over the course of 13 years, he successfully steered the firm to merge with Dakota, bringing in over $400 million in assets for more than 300 families and servicing over 2,000 plan participants, including managing more than $200 million in retirement plan assets.
Dakota Wealth
Kurt Durrwachter
Bryan Keller joined Dakota Wealth as a founding partner in 2018. His role is focused on Dakota’s merger & acquisition efforts, investment policy, portfolio management, custodian and trading platforms, and ensuring a superior client experience. Keller’s professional career started with Kobren Insight Management, a $1 billion AUM investment advisor, where he worked directly under the firm’s chief investment officer, helping to analyze and review manager and fund selection, and contribute to key investment policy decisions.
Dakota Wealth
Bryan Keller
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MFAA head credit adviser, Finsure Finance and Insurance
Christopher Lee
“Deal advocacy offers an alternative to either negotiating directly with a buyer or hiring a traditional sell-side advisor, emphasizing the necessity of this cultural match. In deal advocacy, our approach focuses on identifying and matching the right buyer, which is essential”
ALLEN DARBY,
ALARIS ACQUISITIONS
“Alaris added significant value by focusing on this cultural connection, ensuring that Kurt, Gina, and their team not only completed a fair and beneficial transaction but also positioned themselves well for future success as part of Dakota”
BRYAN KELLER,
DAKOTA WEALTH MANAGEMENT
“Initially, I thought, ‘Okay, great, they know the buyers,’ assuming other advisors knew just as much. But as we got deeper into the process, the extent of their knowledge was truly surprising. They really knew everyone on their list, which brought a sense of comfort”
KURT DURRWACHTER,
LEDGE WEALTH MANAGEMENT
In Partnership with
Deal advocacy: Redefining M&A in wealth management with Alaris Acquisitions
Beyond the highest bid: how Alaris advocates for cultural fit and strategic partnerships in mergers and acquisitions
Read on
Christopher Lee
MFAA head credit adviser, Finsure Finance and Insurance
Bryan Keller
Dakota Wealth
Kurt Durrwachter
Dakota Wealth
Allen Darby
Alaris Acquisitions
Industry experts
LAST YEAR financial auction to find the highest bidder for your wealth management firm is easy. What’s tougher, and arguably more economically beneficial in the long run, is ensuring a cultural fit. Yet, many advisors in wealth management transactions prioritize securing the highest financial offer for sellers, rather than aligning them with the right partners.
The traditional M&A route often uses a financial auction, where buyers are encouraged to bid with minimal interaction with the seller, potentially leading to mismatches in company culture and values. Alaris Acquisitions disrupts this model by prioritizing “cultural fit” through understanding and aligning the core values and operations of the buying and selling firms from the outset.
In a recent session hosted by Greg Greenberg, the spotlight was on Alaris Acquisitions and its innovative deal advocacy process. With key insights from Allen Darby, CEO of Alaris Acquisitions, along with firsthand accounts from Kurt Durrwachter, historical CEO of the selling company, Ledge Wealth Management, and Bryan Keller, chief strategic officer of the acquiring firm, Dakota Wealth Management, involved in a notable successful transaction, this discussion unveiled the unique strategies that differentiate Alaris from traditional M&A processes.
One can hope to achieve a cultural match between buyers and sellers only if you know the buyer. This model requires the sell-side advisor to delve into understanding the buyer’s model –analyzing their history, team, and mandatory alignment points such as client experience, investment platform, and technology stack. This comprehensive understanding is crucial for a seller to assess whether they would be content at the buyer’s firm. Capturing and cataloging all this buyer data is a significant challenge, but their years of experience have equipped them for this task. Alaris has conducted this analysis for its 67 buyers in its network.
The deal advocacy model
Rather than conducting a traditional financial auction, their approach of deal advocacy allows them to conduct a cultural auction. They guide sellers through an educational phase, organizing data, which culminates in their buyer discovery meeting. Here, they present their findings on how the structural realities of their business and partnership preferences align with potential firms.
Alaris uses a technology called the Lens Application, which algorithmically identifies matches between sellers and buyers, providing a more objective basis for compatibility. This process ensures that only culturally aligned buyers are invited to participate, fostering a better match. There’s little reason to invite firms that do not match culturally to bid on the practice.
In January, MPA held a roundtable discussion with four customer-owned banks: Heritage Bank, Beyond Bank, Teachers Mutual Bank Limited and Bank Australia. We were also joined by two brokers who use mutual banks for their clients’ business: Christopher Lee and David Merison.
As brokers such as these struggle with the greater scrutiny that has following the royal commission, customer-owned banks are stepping up to the plate, providing a service that highlights the value of human interaction. With questions around living expenses forcing a heavier workload on brokers, this personal touch can be vital.
During the roundtable, which took place at Otto restaurant in Sydney, the group discussed the unique value proposition that customer-owned banks offer, particularly with the lack of shareholders they have to cater for. While other
“The value proposition that mutual banks provide is getting some more attention,” he said. “We’ve known for a long time that the customer satisfaction that members get through mutual organisations is very high compared to the major banks. I think we’ve struggled to convert that into member growth, but more recently, with it being so front of mind with customers, it’s definitely starting to grow.”
Growth in the sector is giving the mutual banks their “time to shine”, said Beyond Bank head of third party Darren McLeod, adding that they had worked hard over the last two years on selling their proposition.
Referring to the previous year’s roundtable, when the catchphrase of the day was that the customer-owned banking sector was the industry’s “best-kept secret”, McLeod said, “I think that secret is finally getting out.”
“I don’t think we’re doing anything different,” he added. “We’re doing what we’ve always done, but there’s more customer uptake because the market’s in a place where people are now looking, and they’re willing to try it.”
Agreeing that the royal commission had had an effect on consumers heading to the mutual banks, Mark Middleton, head of third party at Teachers Mutual, said there was a growing groundswell. Not only were borrowers looking for alternative options but aggregators were adding more choice to their panels, he said.
Offering a different perspective, Middleton said consumers were becoming more aware of responsible lending and social responsibilities and asking about things like climate change. Teachers Mutual is not only carbon neutral but gives back around 6.8% of its net profits to community grants and other projects.
“It’s particularly topical right now, with the bushfires happening around the country, that people will start looking for who is doing things to make a difference, not just for this generation but future generations,” Middleton said.
“I think we’ve been actually ahead of the curve; no one’s been really aware of it, but the last 12 months it’s become more prevalent.”
Middleton also talked about the wider recognition the sector was receiving, as reflected in its high NPS scores.
“From all the mutuals around the table here, clearly when customers are being recommended by brokers to come to us, they’re voting with their feet,” he said.
McLeod agreed that a lot of the growth was coming out of the third party space.
“We’ve all been working hard in the broker space over the last couple of years as more brokers use customer-owned banks,” he said. “I think the growth is definitely in the broker channel and the work all of us have been doing in the business. The growth we’re talking about is definitely coming from brokers.”
Brokers have also been an important factor for Bank Australia. Senior relationship manager Fernando Lemos said the bank had been bolstering its support around the third party distribution space. He added that it was not only about diversification of products but also diversification of lenders, and this helped brokers cater for a wider client base.
“I think brokers are really starting to become aware of what we’re about and what we stand for,” Lemos said.
“There’s a marketing edge as well: they can go out there and promote themselves. They’re not just a line to a particular organisation; they can look after certain types of clients.”
Agreeing, McLeod added that the extra regulation, such as the caps on interest-only lending, had also had an effect on the sector.
“We all had to slow down for the caps,” he said. “But when it opened up, the brokers who used four lenders were now using a lot more, so it really gave us a chance because we’re in that larger group. So it’s really opened up the market, because it was so confusing in terms of who was doing what – who’s doing construction, who’s doing interest-only, who’s doing investment – so it’s opened up the market and it gives us a shot at getting the business."
One of two brokers joining the roundtable, David Merison from Vault Plus Mortgage and Finance Consultancy said the demographic of people looking to borrow money wanted choice, rather than relying on those who came straight out of the banks and were simply agents for those lender
“We’ve got to hold ourselves open and come up with some innovative solutions, and that means introducing some lenders they wouldn’t always think of,” he said.
Finsure Finance and Insurance broker Christopher Lee said his primary objective was to put the largest amount of money in his client’s pocket rather than the bank’s pocket, and the mutuals offered a cheaper alternative, as well as a more diverse product range.
Not just that but Lee simply enjoys dealing with the mutuals more.
Keller finds there’s an eagerness in the industry to make the transaction happen. However, he points out, “The group at Ledge is still early in their careers, which made the transaction secondary to their future prospects over the next five, 10, or 15 years. The significance of their long-term goals far outweighed the immediate transactional details. If Kurt and Gina had chosen the wrong representative, they might have secured the same financial outcome but with a less favorable long-term impact, which is crucial for where they envision themselves several years down the line.
Alaris Acquisitions is a boutique M&A advisory firm that specializes in the wealth management industry. Today we are a team of 14 professionals with substantial expertise in assisting sellers (RIAs from $200 million in assets under management [AUM] to $10 billion in AUM) find “partners” – the buyers who best align to the needs and objectives of the owners, team, and clients of the seller. Our two founders, Allen Darby and Jacqueline Martinez, have a well-established reputation in the industry for getting the cultural fit right without sacrificing the monetary aspects of the transaction.
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Kurt Durrwachter, a seasoned professional with over 24 years of experience in the financial industry, is the managing director and senior wealth advisor leading Dakota’s Sartell, Minnesota, office. Kurt brings a wealth of experience managing teams and cultivating client relationships. Kurt’s entrepreneurial spirit led him to launch Ledge Wealth Management in 2010 with 40 clients and $12 million in assets. Over the course of 13 years, he successfully steered the firm to merge with Dakota, bringing in over $400 million in assets for more than 300 families and servicing over 2,000 plan participants, including managing more than $200 million in retirement plan assets.
Dakota Wealth
Kurt Durrwachter
Bryan Keller joined Dakota Wealth as a founding partner in 2018. His role is focused on Dakota’s merger & acquisition efforts, investment policy, portfolio management, custodian and trading platforms, and ensuring a superior client experience. Keller’s professional career started with Kobren Insight Management, a $1 billion AUM investment advisor, where he worked directly under the firm’s chief investment officer, helping to analyze and review manager and fund selection, and contribute to key investment policy decisions.
Dakota Wealth
Bryan Keller
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MFAA head credit adviser, Finsure Finance and Insurance
Christopher Lee
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As the CEO of Alaris Acquisitions, Allen Darby helps owners of wealth management firms navigate the complex and competitive landscape of mergers and acquisitions. Darby has spent his entire career in the wealth management industry. Most notably he owned his own RIA for 20+ years, where he served high-net-worth and ultra-high-net-worth families, as his RIA provided investment advice, financial planning, and estate tax assistance. He has a deep understanding of the challenges and opportunities that RIAs face, and how to create win-win scenarios for both buyers and sellers.
Alaris Acquisitions
Allen Darby
A fresh perspective on M&A
Published May 30, 2024
The deal advocacy model
Ledge Wealth Management’s experience
The strategic benefit for buyers like Dakota Wealth Management
“Initially, I thought, ‘Okay, great, they know the buyers,’ assuming other advisors knew just as much. But as we got deeper into the process, the extent of their knowledge was truly surprising. They really knew everyone on their list, which brought a sense of comfort”
Kurt Durrwachter,
Ledge Wealth Management
A call for industry change
WOMEN ADVISORS
DIVERSITY
RETIREMENT
FINTECH
TOPICS
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Comparing sell-side advisor approaches
Focus on valuation mechanics and deal structure
Prioritizes removal of P&L expenses to artificially inflate EBITDA. No awareness of buyer service and practice management model
Shotgun-style email blast to a broad spectrum of buyers with zero emphasis or awareness of alignment between the parties
Competitive auction with any buyer regardless of cultural alignment. Belief is having multiple buyers regardless of fit will increase the price
Focus on broad M&A landscape, multi-buyer models, valuation, and deal structure
Prioritizes identification of business realities that may impact attractiveness to culturally suitable buyers. Realistic P&L assumptions based on awareness of buyer-client service model
Uses in-depth knowledge of buyer universe and models to select buyers who have a high degree of match with seller partnership preferences, autonomy, and growth profile
Invites only cultural fits to the bid process. The belief is that culturally aligned buyers will be more aggressive on price
Minimal guidance
Full support and guidance until closing
Blind “FINANCIAL
auction”
Curated “cultural invitation”
A fresh perspective on M&A
The deal advocacy model
Ledge Wealth Management’s experience
“To Bryan’s point, this depth helped us speed things up, which was exactly what we needed. We weren't under a strict deadline to sell, but we were exhausted from the process. It was reassuring to go through a process where Allen could answer every question I had.
“He didn’t need to call the firm to check on whether they would let us manage our own money our way, whether we could roll equity, what their structure was, how long their involvement would be, if there was private equity involvement, if they had an internal CIO, or what their technology stack was like. They just knew it all. When we narrowed it down and went through Alaris’ process, which has even gotten better, and they sent us decks on firms like Dakota, it all came together.”
The strategic benefit for buyers like Dakota Wealth Management
Education
for seller
Blind “FINANCIAL auction”
Data organization
Buyer identification and matching
Deal
negotiation
Post LOI workflow
WOMEN ADVISORS
DIVERSITY
RETIREMENT
FINTECH
TOPICS
NEWS
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WOMEN ADVISORS
DIVERSITY
RETIREMENT
FINTECH
TOPICS
NEWS
A fresh perspective on M&A
The deal advocacy model
Ledge Wealth Management’s experience
The strategic benefit for buyers like Dakota Wealth Management
“Alaris added significant value by focusing on this cultural connection, ensuring that Kurt, Gina, and their team not only completed a fair and beneficial transaction but also positioned themselves well for future success as part of Dakota. Looking forward a decade, Kurt will likely reflect
more on what they achieved post-transaction rather than the transaction itself. The merger with Dakota is just one step in a larger journey, not the focal point.”
With Alaris, a favorable deal combines optimal economic valuation, the best cultural fit, and the best post-acquisition quality of life. These three factors together create what they consider the best deal.
Darby believes the industry should adopt this approach because it serves both parties well. Even though Alaris represents sellers, they advocate for a great outcome for buyers as well, aiming for ideal outcomes for both parties. Achieving this requires an incredible amount of work. Understanding the buyers doesn’t happen overnight; it takes about 30 to 50 hours with each one to delve into the nuances of who they are, what they are looking for, and what their advisor value proposition is.
Darby advocates for a shift toward an approach that values cultural fit as much as financial figures.
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