What kind of relationship do you and your acquirer have?

When one firm buys another, it's often a testy situation.

For old-timers like yours truly, wealth management mergers and acquisitions can often result in a relationship like Liz Taylor and Richard Burton's: volatile and unworkable. For the youngsters, or those around 40 or below, deals in the end may wind up being like Angelina Jolie and Billy Bob Thornton: just plain weird.

There's been a steadily increasing pace of wealth management deals for a decade or more. With all this buying, what's become evident is how tricky it is for firms to make the right match.

There are many reasons for wealth management acquisitions to fall apart and ultimately not work. Broker-dealers or registered investment advisors often overpay, making the acquisition too expensive. Firms can be a poor business match or a bad cultural fit when acquired by another enterprise.

At times, management also doesn't understand the business it's buying. Tempted by offers from competitors, financial advisors may leave a firm that was just purchased for a different employer, leaving the buyer in the lurch.

In a moment, we'll discuss recent deals made by Avantax Inc., formerly Blucora Inc., which has 3,100 financial advisors who work with about $84 billion in client assets; many of those advisors have backgrounds working on clients' taxes and are CPAs. The company saw a spike in its share price over the summer after activist investor Engine Capital sent a letter to the Avantax board asking it to consider a strategic review of the firm, including a potential sale.

But first, let's take a look at this week's decision by the Goldman Sachs Group Inc. to dump the RIA business it paid $750 million for back in 2019, United Capital Financial Partners.

Goldman renamed the RIA Personal Financial Management, but the firm didn't work out to be a fit. The giant investment bank decided this year to refocus its efforts on working directly with the super-rich, those with tens or hundreds of millions of dollars in assets, as opposed to plain old millionaires, the sweet spot for most RIAs like United Capital.

The Goldman-United Capital deal was an Angelina-Billy Bob type relationship: a bit strange, with stuff under the surface that most likely will never see the light of day. (For example, how much is the new owner, Creative Planning, actually paying for the RIA?)

Which brings us to Avantax. The firm made two broker-dealer acquisitions, one in 2015 and the other four years later, spending a combined $760 million for the former HD Vest Financial Services Inc. and 1st Global Inc. Financial advisors who focus on taxes often are on the lower end of annual revenues when measured against the rest of industry, since their focus is taxes, rather than gathering client assets.

Avantax has been wheeling and dealing. Last year, it sold TaxAct, its software business, for $720 million, turning the company into a "pure play" independent broker-dealer and RIA wealth management company, it said at the time.

So Avantax has been buying and selling huge chunks of its business for eight years. As of Wednesday afternoon, the company's share price was $20.61 and it had a market capitalization of almost $758 million, or roughly the combined sticker price of the two tax-focused broker-dealers it bought in 2015 and 2019, not taking into account inflation.

Just think. If Avantax had used the $580 million it spent on HD Vest and invested around that time in the S&P 500 stock index, it would have more than doubled its money over the same period.

"As part of our multi-faceted, tax-focused business model, a number of factors influence our M&A strategy," CEO Chris Walters wrote in an email. "The acquisition of 1st Global in 2019 furthered our position in tax-focused wealth management."

He noted that the company was setting new highs in revenue; adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization; recruiting; the portion of assets in advisory; and net new assets.

"With our strong performance, we believe the outlook for the business is very positive," Walters added.

It would be premature to label Avantax and its deals a Liz and Dick match, or another kind of relationship, say an Oscar and Felix.

But investors have started nipping at its heels, always a sign that a company needs a good counselor to prepare for what's ahead. What kind of relationship will Avantax strike next?