How Mergers & Acquisitions Can Cause Turnover in Wealth Management Firms (& How To Prevent It)
Mergers and acquisitions (M&As) are a constant in the wealth management industry. Firms are merging at an increasing pace as they seek to grow, meet regulatory requirements, and plan for the future.
But while M&As promise growth and efficiency, they often come at a hidden cost - culture loss.
When two firms merge, their processes, client bases, and structures may align on paper, but integrating their people and values is a much greater challenge. And when culture is neglected, employees feel disconnected, leading to increased turnover.
The Cultural Impact of M&As
In theory, an acquisition should create a stronger, more resilient business. But in reality, many fail to consider the emotional and cultural shifts employees experience. Here’s what typically happens:
A Sudden Shift in Identity
Employees often join a firm because of its leadership, mission, or ethos. When that firm is acquired, its unique culture can disappear overnight, leaving employees unsure of where they fit.
Communication Breakdown
M&As are often led by financial and operational teams, with little involvement from those managing people and culture. When employees are left in the dark about changes to policies, reporting lines, or job security, uncertainty leads to disengagement.
Conflicting Expectations
A clash between old and new ways of working is inevitable. Whether it’s different approaches to client service, management styles, or work-life balance, friction arises when teams feel forced to abandon the practices they value.
Weakening of Trust
If employees feel that promises made during the acquisition—whether about autonomy, flexibility, or career progression—aren’t upheld, trust in leadership declines. And when trust is lost, so is talent.
How Firms Can Preserve Culture and Retain Talent
Culture isn’t something that can be “fixed” after a merger; it has to be proactively protected throughout the process. Here’s how firms can do it:
1. Prioritise Communication from Day One
Uncertainty breeds disengagement. Leaders must be transparent about why the deal is happening, how it will impact employees, and what steps are being taken to align cultures. A clear, consistent message is key.
2. Identify Cultural Differences Early
Rather than assuming two firms will naturally blend, companies should be intentional about how they can uphold the company culture throughout this change. Understanding areas of similarity, as well as difference, helps create a realistic integration plan.
3. Retain and Empower Key People
Acquisitions often trigger a talent drain, with employees leaving due to uncertainty. Identifying cultural ambassadors - leaders and long-standing team members who embody the best aspects of both firms - can help maintain stability.
4. Be Flexible, Not Forceful
A rigid "one-size-fits-all" approach rarely works. Instead of enforcing a single way of working, firms should find ways to integrate best practices from both sides.
5. Support Employees Through Change
Mergers can be an unsettling time, and many employees will question their future within the firm. Providing structured onboarding, mentoring, and career development opportunities reassures employees that they still have a place—and a future—within the organisation.
Final Thoughts
Culture isn’t just a “nice to have”—it’s the glue that holds an organisation together. And when M&As fail to prioritise culture, they risk losing the very people who made the firm successful in the first place.
For wealth management firms navigating a merger, the lesson is clear: financial and operational integration alone isn’t enough. To retain talent and ensure long-term success, companies must invest in protecting and evolving their culture.
- Written by Dan Butler
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