How to Double the Size of an Investment Firm in a Pandemic

(Bloomberg Opinion) -- Doubling the size of an investment advisory firm is hard even without a pandemic. But Dave Welling, the chief executive officer of Mercer Advisors and this week’s guest on the Masters in Business podcast, did it. Welling explains how the firm, which has been around for 35 years, began to grow through acquisitions four years ago and kept it up last year.  The Denver-based registered investment advisor has 450 employees and manages more than $21 billion.

Welling’s nontraditional career path, which included experience in consulting, private equity and technology, has given him a unique perspective on the financial services business. He explains the process the firm uses to identify, fund and negotiate acquisitions, with part of the secret being the focus on succession planning for small firm owners. Welling notes that deal structures have evolved due to plentiful private-equity capital in an era of very low interest rates. Private investors in RIAs get a steady cash flow, effectively creating a high yielding investment.

We discuss his joining Charles Schwab Corp. in 1997 instead of Inc. Welling didn’t believe the Seattle start up represented the best career path for him, and he has never regretted the decision. We also discuss the lack of diversity in the financial services industry, which Welling describes as “male, pale and stale.” He explains a Mercer Advisor women’s initiative called InvestHERs, which is designed to promote diversity in the advisor industry.

A list of his favorite books are here; A transcript of our conversation is available here.

You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here.

Be sure to check out our Masters in Business next week with Sébastien Page, the head of T. Rowe Price Group’s Multi-Asset Division, which manages about $363.5 billion. The firm has about $1.31 trillion in overall assets under management.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Barry Ritholtz is a Bloomberg Opinion columnist. He is chairman and chief investment officer of Ritholtz Wealth Management, and was previously chief market strategist at Maxim Group. He is the author of “Bailout Nation.”

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