Merger proved to be her passport to semiretirement in the Caribbean

Adviser Sarah Barnhill is one step closer to her dream retirement on the white sand beaches of St. Croix in the U.S. Virgin Islands. Last year, she merged her Greenville, S.C.-based practice with the Asheville, N.C.-based practice of fellow LPL Financial LLC adviser Doug English in anticipation of spending most of her time in the Virgin Islands. “I have nothing pressing me to [retire], but I have a house in the Caribbean and I wanted to figure out how to spend more time down there,” said Ms. Barnhill, 61. “I wasn't sure I wanted to leave the business right away.” Ms. Barnhill, who had about 150 family relationships and assets in the neighborhood of $45 million, put the merger in motion after mentioning to a senior vice president at LPL that she wanted to sell the practice in a slow exit. She asked him to be on the lookout for a good match. Six months later, Mr. English approached Ms. Barnhill at the suggestion of that LPL executive. She said she “liked his ethics and honesty foremost.” It took two years of meeting over lunches and dinners before the two signed an agreement. The deal came out to 1.8 times commission revenue, according to Mr. English. “I had people courting me for the practice, but I was looking for someone who was a good fit, and that took two years to work out,” Ms. Barnhill said. “It was very much like marriage with a long engagement.” Bringing the two practices together came with its own set of obstacles. Most of Ms. Barnhill's clients had brokerage accounts, and each was unique, Mr. English said, yet her practice was slowly migrating toward a fee-based model. The two advisers joined forces in moving the accounts from the brokerage side to the advisory side. The transition, however gradual, has been an adjustment for both sets of clients. Many of Ms. Barnhill's clients are over 60, and Mr. English has been working to get them up to speed on virtual and electronic communication — especially since she's now working two and a half to three days a week in a small office in St. Croix. Some still prefer to speak with her directly.

CATERING TO CLIENTS

Indeed, even Mr. English, who has bought a number of practices from other advisers, notes that successful integration depends on catering to the clients and their preferences. “Some might be tech-driven, versus pen-and-paper; some might want to be referred to as "Mr. and Mrs.,' and others are friends,” he said. “These are details we've learned through multiple acquisitions; the clients judge new advisers at the most basic level, versus the old adviser and their internal expectations.” Ms. Barnhill's decision to taper off her participation in the practice has helped ease her investors into the transition because clients regard her and Mr. English as partners. Meanwhile, day-to-day management of the accounts is no longer a pressing concern for Ms. Barnhill, which shortens her work week and allows her to nurture client relationships, even from afar. “The outcome I'm seeking to design is a practice that's efficient and takes care of the parts that are difficult, including the technology and managing the portfolio, so retiring advisers can reduce their hours but not eliminate them,” Mr. English said. Ms. Barnhill agrees. “If we're having fun and doing well by the clients, then there's no need to fully retire, and I can work with them easily from [St. Croix],” she said. dmercado@investmentnews.com