M&A Talk with Leading RIA Aggregators and Integrators: David Canter of Bluespring Wealth Partners

President of one of the nation’s premier RIA firms and musician, David Canter, is focused on positioning Bluespring Wealth Partners as one of the premiere acquirers in the industry. He is very hands-on with operations, including overseeing day-to-day operations and identifying new areas of opportunity and growth. David has worked in multiple aspects of the RIA space, previously serving as Executive Vice President and Head of the RIA segment for Fidelity Clearing & Custody Solutions and now serving as President of Bluespring Wealth Partners.

Although David has been in the RIA space for years, as most stories go, working in the RIA space wasn’t his life-long passion. He had his sights set on the entertainment industry – training at one point as an actor – and loves music and playing his guitar. Breaking into the entertainment industry is complex; beyond acting as an extra, he found that the work just wasn’t there. He quickly had to realize that there were other avenues he could take in terms of this career, while still keeping the arts as a deeply held passion.

Once he made the decision to focus himself elsewhere, David was drawn to law. The lure of the courtroom was undeniable to David, and he went on to pursue a Juris Doctorate from the University of Baltimore. He loved the courtroom and trial work, and currently holds his FINRA Series 24 license, and is a California State Bar member

THE BLUESPRING ATTRACTION

David has done it all in the industry, but what attracted him to Bluespring Wealth Partners after nearly three decades in the RIA space is simple: He wanted a new challenge. For David, Bluespring Wealth Partners wasn’t just a challenge, but a fitting piece to the next chapter in his career. It allows him to be entrepreneurial, but simultaneously intrapreneurial. This balance allows David many freedoms he wouldn’t otherwise have, and a chance to build the company into something new. It is now a 29-firm platform spanning 16 states – and growing. The firm will do 9 acquisitions by the end of 2022, but not just for the sake of doing acquisitions. Their acquisition plan is focused on solving the problems of their “partner firms”, as they call their network of firms.

AN INFORMED CHOICE

In the RIA space, there are many choices an advisor can make just to get to the starting line. David believes in choice, and not merely having the choice, but having an informed choice. David understands that Bluespring Wealth Partners isn’t going to be the perfect choice for everyone, however, he wants the DealQuest listeners to know what Bluespring does. 

Bluespring Wealth Partners can be best described as a practice management consultancy at its core that happens to be in the strategic M&A space. It is the responsibility of practice management consultants to assist offices and firms with improving efficiency within their workplace and in their business operations. That’s the bulk of Bluespring Wealth Partners’ approach: Addressing problems their acquired “partner firms” have and establishing problem-solving efficiency via the network of firms under Bluespring.

ONE SIZE DOES NOT FIT ALL

Two of the most commonly used words in the RIA space are “aggregator” and “integrator”. Some firms operate as either pure aggregators or pure integrators, however, there are more firms that pick elements of each model to formulate the specific model that is best for them. There is a reason all these models exist, and that’s simply because no singular model works for every firm, entrepreneur, client, or investor.

Again, choice plays a vital role in the decision of which model is best for any advisor and under which model Bluespring operates. The choices in the marketplace that David layout are:

• Choice 1: Do nothing. Keep on plowing forward as you always have, and hopefully, fulfilling your career.
• Choice 2: De-risk. For example: A firm has a retiring partner, so to pull some capital, they find a minority interest capital partner that is not going to take control, but merely provides some capital.
• Choice 3: Find a pure capital partner. For example: They buy 50%+, and you obtain a capital partner that’s not going to provide other shared services or support aside from the capital.
• Choice 4: Entrepreneurial model (on the aggregator side of the spectrum) . Keep your brand and the acquiring company will take at minimum 51% interest in your firm and build a flexible deal structure. By doing this, the focus is preserving the entrepreneurial model and providing various services to help propel your firm forward into growth within the network of acquired firms.
• Choice 5: Subsume into another brand (more commonly known as the integration model). You become the larger brand, forgoing your independent brand identity for the growth of the whole institution. The larger firm will guide the smaller acquired firms in their business activities and take over all the services other than, having the advisors continue to look after their clients.
• Choice 6: Internal succession to a G2. David notes that in their initial research for founding Bluespring, they found that founders mostly prefer this route; however, the biggest obstacle is finding the capital. G2s would say they would like to pay out of cash flow, but ultimately, it’s the entrepreneur taking the risk and it’s their cash flow that will fund that transition.
• Choice 7: A combination of all of the above. Choosing the aspects of all the available models to build a Frankenstein model that works best for your goals, your future, and what you want to do with your firm.

These seven choices on how to proceed to allow a firm to formulate how they will move forward with their M&A deals. Bluespring Wealth Partners primarily functions as Choice 4, the Entrepreneurial Model, while recognizing the benefits of all models, opting to borrow practices from other models to give their entrepreneurs the best of all worlds, and allowing over half of their firms to be standalone RIAs.

• Keep their brand (For example: Capital Planning, A Bluespring Wealth Partner)
• Keep their own ADV
• Keep their client experience
• Bluespring provides capital
• Take the defensive tasks off the advisors' plate ( HR, benefits, financial implementation and reporting, procurement, etc.)

THE VALUE BLUESPRING BRINGS

David affirms they do not take about 90% of opportunities that cross their path. Bluespring is very transparent with those opportunities as to why they pass. By being particular in the opportunities they take, Bluespring has built an elite and strong network of firms offering immense value to the firms that Bluespring acquires.

One attribute of Bluespring’s consultancy is that even when they pass on an opportunity, they’re offering their advice and consultation to these firms to help them better grow, irrespective of whether Bluespring chooses to bring them into their network or not. Bluespring’s consulting really begins long before they even decide to enter into a transaction.

If Bluespring does go forward with a transaction, there’s a lot of due diligence they do by way of taking a consultative approach to how they’re going to do business together, and how they’re going to structure transactions so the right benefits, incentives, and synergies can be found.

Once a firm enters their network, they provide an array of resources to help their community network grow:

• A business consulting group
• Marketing assessments
• Large technology infrastructure
• An M&A team to help with sub-acquisitions
• Access to capital, backed by two private equity firms -- majority-owned by Warburg Pincus, and Oak Hill Capital
• A training program for G2s: The G2 Successor Academy, a simulated 2-year course wherein G2s are educated and trained through guest lecturers, peer study, etc.

CHOOSING WHAT WORKS FOR YOUR SUCCESS

There is a reason why there are so many various models and combinations of models. At the end of the day, choosing your model is about you and your goals. With Bluespring, David ultimately wants to operate as a culture-driven community. Allowing their acquisitions to remain primarily autonomous, while gaining the support of Bluespring and their resources.

There is no one superior model, however, each firm will always believe they’ve found the key to making a successful business. That is true in a lot of ways because success is very abstract; they are successful because their model works for them, not because they have the superior model.

Reviewing choices, building a model for their needs and goals, and understanding what opportunities should be taken and those that shouldn’t, are all keys to making Bluespring’s model work successfully. They will be some of the keys to helping build your success, as well.

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For my full discussion with David Canter, and more on the topic:
Listen to the Full DealQuest Podcast Episode Here

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FOR MORE ON DAVID CANTER AND BLUESPRING WEALTH PARTNERS:
https://www.bluespringwealth.com/advisor/why-bluespring

Corey Kupfer is an expert strategist, negotiator, and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author, and professional speaker. He is deeply passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.

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