Using the “robust network of industry professionals” he has developed in nearly a decade with Charles Schwab, Dave DeVoe left his role as managing director of strategic business development to launch his own firm, DeVoe and Company.  

DeVoe and Company was officially open for business on November 21. The following day, DeVoe traveled from his office in San Francisco to meet with his first client, Concert Global, in San Diego.  Of course, this client didn’t come to him overnight – DeVoe told PLANADVISER that he had been exploring launching his own firm for several years and looked into it in greater detail over the last six months.  

What is it that DeVoe is offering? “It’s more than just help with mergers and acquisitions,” he said. “I take a step back from the transaction and talk to the adviser about their goals. Then you can make the transaction much more strategic. It’s not just about growing – you can add your future successor or add a new service or capability, or expand your geographic footprint – there are a variety of things you can do, and perhaps a single transaction can achieve multiple goals.” DeVoe thinks his background in business gives him a more strategic perspective.     

His first client is a good example, he said. Concert Global, with $2 billion assets under management (AUM) in wealth and capital management, is looking at acquiring two registered investment advisers (RIAs), one with $120 million AUM, the other with $220 million AUM.  One RIA is a hybrid adviser. “Bringing this RIA on would not just be bringing in new assets,” he said, “but it would also be adding a new platform, to bring on more and more advisers that use the hybrid model of fee-based and commission services. The other firm has strong money management capabilities and can help Concert provide stronger services to its clients.”

DeVoe said it was eight years ago that he wrote the business case for Schwab to create a suite of services for their adviser clients to help with M&A and succession planning.  Since then, there has been a steady increase in M&A activity with a record-setting 70 deals made in 2010 (see “2010 Record Year for RIA M&A”). He expects there to be another seven to ten years of increase in M&A activity, largely drive by structural changes to the industry (such as the aging demographic of many financial advisers, with the average age being 54).

What also drove DeVoe to launch his own firm is that while 20-40% of advisers say they have a succession plan in place, DeVoe doubts they are all comprehensive enough.

“My goal is to help the adviser community not just with M&A, but to create robust succession plans that help mitigate potential disasters. The proverbial ‘bus’ can hit a principal and create a disaster for all parties involved. Not just affecting the clients, but the staff, the heirs – we want to avoid distressed sales or situations,” he said.

In addition to working with Concert Global, DeVoe said he’s currently just trying to keep up with the people that have contacted him.  He plans to scale up his firm as necessary – right now it’s just himself and some administrative support. He’s also contracted with an investment banker that works with him on a project basis. If he sees a substantial increase in demand, he may be adding to his team early in 2012.

DeVoe sees a “pent up supply of firms” that are in the market for his type of services; and not just other RIAs, but consolidators or banks as well (see “Private Equity Showing Increased Interest in RIA Model”). Simply put, Devoe says he “thought it was the right time.”