The Role of the Wealth Manager in the M&A Team

The Role of the Wealth Manager in the M&A Team

By George Walden

September 16, 2013

Selling your business is a life changing experience.  The business owner will shift from their net worth being tied up in their Company, to their net worth being cash. The business owner is making the transition from a business making them money to their money making them money.

Mergers and acquisitions is a team sport. In addition to the investment banker, deal attorney, and tax CPA, the wealth manager has a vital role in the process.

As we start the transformation of helping someone to exit their business, we have some very important questions to answer, to fully understand the goals of the business owner.

What’s your number?

One of the fundamentally important roles of the wealth manager is in helping the entrepreneur to determine how much money it takes to accomplish their goals. How much does it take to feel secure? The cash flow that the business generated has been funding a lifestyle that must now be replaced by other streams of cash flow. The business owner now has the chance to ensure the financial stability of their children or grandchildren. The owner has the opportunity to fund charitable enterprises.

All of this takes money.  It is important for the entrepreneur, as well as the M&A team to comprehend how much their goals will cost so everyone understands how much capital they will need out of a transaction to fund these goals.


When the wealth manager is brought into the deal from the beginning, there are often recommendations they can make regarding the legal structure of the business owners assets that can impact taxes and gifts. Each family is unique and each situation is different, but the wealth manager can help answer a few of the following questions:

  • Are there gifts to children or grandchildren?
  • Is it more efficient to gift stock in the company pre-sale or cash post-sale?
  • Is there a need for trusts or foundations to be set up prior to a transaction?

When these questions are contemplated before a transaction, it can have a significant impact on how much wealth the family keeps and how much it pays in taxes.


During the process of taking a company to market, the ultimate goal is to have multiple bids on the company. Each of these offers can vary widely in structure and form. We, as investment bankers, ensure the entrepreneur understands what the offers mean to them and work hard to effectively compare offers side by side.

There are many ways to get paid for your company. In addition to the sales price of your company, there are employment agreements, non-compete agreements, consulting contracts, earn outs, seller notes, just to name a few. This not only impacts how much you get paid, but when you get paid as well.

During the negotiation process, it is important to have a wealth manager that is able to measure the impact of these changes and ensure the offers under consideration still accomplish the entrepreneur’s goals.

Putting Money to Work

Exiting your company will likely be one of the largest financial transactions of a business owner’s life. Significant thought needs to enter into what and where that money gets invested, in order to accomplish a set goal. Working with a wealth manager that listens and structures their assets uniquely for the needs of the entrepreneur’s individual situation is imperative. This is not the time for a good salesman….rather it is time for a serious, thoughtful, long term plan for the business person that includes flexibility as life and the economy changes.

How and where to put the proceeds of a sale to work is not a decision that should be made post-closing. The plan needs to be in place and that money needs to go to work immediately. Making these decisions up front brings about a more deliberate decision. It also takes this issue off the table so the business owner can focus on the sales transaction itself.


Utilizing a wealth manager as part of our M&A team on the front end can shorten the sales time, help the business owner stay focused, and result in an increase in the probability of success.

The wealth manager is not a role typically considered when forming an M&A team. We bring them into the process very early and find them to be an integral part of our ability to maximize the outcome of the sale of a business for families.

Posted by George Walden.

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