Showing posts from November, 2012

Same As It Ever Was?

Now that the dust has settled on the Luminous sale, it’s worth wading through all of the hype and surprising professional jealously to analyze the merits of the transaction.
When you consider the poor track record of banks making wealth management acquisitions, it would be too easy to conclude that another dumb bank has just bought another wealth advisory firm built by "smart" Wall Street pros.
In the late 1980s, Bank of America bought Charles Schwab & Co. and then sold it back to the founder for pennies on the dollar.  In 2000, State Street made the same mistake.  It bought Bel Air Investment Advisors and sold it back to the founders, again for pennies on the dollar.

This Time May Be Different
Why didn’t those investments succeed?
Previous transactions failed because the acquired firm was not a strategic fit. Equally as important, the bank wasn’t fully committed to integrating the firm into its macro business plan.  The new wealth management firm was just too small to m…