Newport Beach, CA
Financial Planning, Investment Management, Tax Services
Principals seeking succession solution, expanded resources
Michael Duckworth founded Duckworth Wealth Advisors in 1998 with a vision to provide holistic wealth management solutions to a small set of high net worth families. This vision served Duckworth well as the firm grew over the years to become a prominent wealth management boutique in Newport Beach, CA.
Along the way, Michael brought his daughter, Kara Duckworth, into the business who, along with two other long-time staff members, became minority owners in the enterprise. After a very successful career, Michael began to think about his own retirement and the overall succession planning for the firm.
- Kara Duckworth
The Duckworth team brought in an outside consultant to conduct a viability study for the many options available for the future of the firm, which the Duckworth team narrowed down to either completing an internal succession with financing through a third-party bank or merging with a larger firm that could bring additional resources and an enhanced client service experience.
For Kara, who was also fulfilling duties as a Chief Compliance Officer, and Liz deSousa, acting as Chief Technology Officer, if they went down the path of internal succession, they would then have to shoulder even more business management responsibilities, further limiting their time with clients. “At this point, we did a lot of soul searching for what we wanted not only for our clients, but also for our own careers,” Kara explains. “I was already doing the job of CCO and Liz deSousa was our CTO, which was taking us away from what we really enjoyed doing, which is working with our clients.”
“As we looked at our choices, we began to realize that the merger route with a larger, more resourced firm would take a lot of the administrative tasks off of our plates, freeing us up to continue working with clients and growing their net worth,” Kara said. “At the same time, we had the internal succession plan in place already, so we were evaluating our options from a position of strength.”
Kara then initiated a narrow search of potential merger candidates because in her words, “It had to be perfect. We would only do a merger if there was an ideal fit.” As part of this search, Kara was introduced to Mercer Advisors and another national independent RIA firm. “At this point, we did a very strong due diligence of both firms, listing the pros and cons of each,” Kara said.
Ultimately, for Kara and her team, Mercer Advisors was the clear winner based on the additional services they would have access to, including an Estate Planning team, a Tax Planning and Preparation team, along with a strong investment management and research capability. From Mercer Advisors’ point of view, it was about much more than adding assets. It was about adding senior talent who could not only serve the legacy Duckworth clients, but offering the deep expertise in forensic accounting that Duckworth provided which would also benefit Mercer Advisors’ expanded client base.
“We met all of the people at Mercer Advisors, not just the senior team, so we could see what it would be like to work with these folks every day,” Kara said. “And to our delight, every single person at Mercer Advisors was fantastic; there was not even one exception.”
From the transaction perspective, it was a relatively quick process, taking less than five months from start to finish. “Mercer Advisors is very experienced in doing these types of arrangements, so the process was smooth, professional, and there were no surprises,” Kara said.
On the client side, the transition went very smoothly. Because there was a cultural alignment and a similar service model, that tight match went a long way to reassuring clients that they would be well cared for at Mercer Advisors.
“At first, we were uncertain of what reaction we would get from our clients when we communicated the news that we were joining forces with Mercer Advisors,” Kara noted. “When we explained that they would have access to added resources, tax planning, a family office structure, more investment choices, along with financial planning and a client-first approach, they simply asked us one question: Are you happy with this partnership? We, of course, said, Yes! And that was all it took. Every single client came on board.”
Kara continues, “Even in advance of these conversations, we were starting to get questions from clients about the future of Duckworth and what were our plans when Michael retires. Mercer Advisors’ history, size, and strength went a long way to further cementing our client relationships.”
Looking forward, Kara is excited about the future with Mercer Advisors. “We will be able to grow faster with Mercer Advisors because with all of the administrative, compliance, technology, and back office support work off our plate, we are running so much more smoothly – it is a real pleasure to come into work every day.”
“It was a little bittersweet to lose the Duckworth name when we joined,” Kara said. “However, in doing the right thing for our clients, we found comfort in being part of Mercer Advisors and now, looking back, it seems like we’ve been here since the beginning.”
Kara’s advice for other advisors pondering these strategic decisions for the future of their businesses is to get started early. Time allows firms to evaluate options and avoid being forced into a fire sale or a partnership that doesn’t fit.
“Pay attention to the softer things, like the cultural comparisons and getting to know the people. These are going to be people you see every day, so spend the time and get to know them outside of the office setting. For our industry, this is probably one of the most important issues we are all facing, so make sure you get started now, obtain professional advice, and find the right partner. We did and couldn’t be happier!”
We help RIAs with growth, succession planning or exit strategies. We offer a myriad of solutions to help take care of and service existing clients. Speak with our Vice President of Business Development, William Perysian.