Unlocking Real Value Blog

AK In The News: Baird Ramps Up Northwest Exposure, Snags $10B Wealth Shop

I was asked to comment on an article in today’s Fundfire (a Financial Times Service) about Baird’s acquisition of Seattle-based B/D McAdams Wright Ragen (MWR). To me, the deal makes a great deal of sense. It extends Baird’s footprint in the Nortwest, and the employee owned boutique-firm seems to have a similar culture and operating philosophy.

But mergers are never easy – no matter how good the fit. There will inevitably be growing and consolidation pains; even the best merger partners experience some pain when they integrate operations, and any change is always traumatic on clients and in turn financial advisors. Having said that, the long-term gains from a successful merger do outweigh the pain. And in this case, I think the similarities in the firm’s cultures will keep the pain to a minimum – if they get the rest of the stuff right.

Contrast this to a merger between a B/D and a bank, or a regional B/D and a wirehouse, where in both cases the cultures are quite different and the odds of trouble in a merger are greater. The results of a merger are never perfect or easy to predict, but from what I can tell, I feel positive about this one.

To quote from the article: “”It seems like culturally the firms are a good fit – two regional players. This will help Baird increase its footprint in the Pacific Northwest. Baird has a reputation as a good regional firm and this step seems logical as they continue to expand,” says Andy Klausner, principal and founder of AK Advisory Partners. “Certainly the merger of two regional brokerage firms – from both a cultural and operational point of view – would be easier than the merging of a regional firm with either a bank or a larger brokerage firm. While Baird is larger and the acquirer, it is more a merger of equals than you see in many other mergers.””

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