Every week we speak with practice owners who thought their merger would be straightforward – and six months later, they’re dealing with staff walkouts, duplicated systems or silent boardroom battles.
The numbers stacked up. But the human and operational fit didn’t, and the deal is now worth less, not more.
The following three examples highlight the very real red flags that can derail advice practice mergers if they’re left unchecked.
Case one: the revolving door
A $3.5 million practice acquired a smaller boutique to build scale. Within six months, a senior adviser and practice manager had both resigned, citing “lack of clarity” and “different ways of working.”
The larger practice assumed the smaller team would simply slot into existing roles and systems. Instead, SOA turnaround time slowed to over 90 days, client handovers kept being pushed back and service levels dropped.
Their clients noticed, too – referrals dried up and retention slipped. Integration costs ballooned, far outweighing the projected revenue uplift.
Sound familiar? We’ve all seen this movie before and, spoiler alert, it’s not a rom com. It’s the one where your best adviser walks out halfway through the plot and the ending costs twice as much as you budgeted.
Case two: the tech tug-of-war
Two mid-sized practices merged, each with strong but different systems. Both insisted their CRM and process library was “non-negotiable.”
One team swore by Xplan with custom threads; the other refused to let go of their well-oiled Worksorted setup. Neither side would budge.
The result was three months of stalemates, duplicated efforts and data quality issues that left the team frustrated and inefficient. What should have been a capacity win became a costly bottleneck – worse, the inconsistent records created compliance risks the firm couldn’t ignore.
Case three: the culture clash
Two advice firms merged with the goal of creating one “high-performing” business. On paper, it made sense: profitable businesses, strong client bases and complementary services.
But culturally, they couldn’t have been further apart. One firm had a casual, family-style atmosphere – flexible hours, Friday drinks and lots of collaboration. The other ran on structure: strict start times, formal policies and a clear chain of command.
At first, both sides tried to adapt. But within months, friction set in. The “family” team felt micromanaged. The “structured” team felt the other group lacked discipline.
Jokes started in the office about “us vs them.” Staff stopped sharing ideas, silos were created and cross-team projects slowed to a crawl.
By the end of year one, staff turnover had spiked, client experience was inconsistent and the promise of “one strong team” had turned into two divided camps under one roof.
As one adviser told us, “It feels like we never really merged. We just share an office.”
Five red flags
So, what do these three cases tell us about merger risks? We can identify five red flags:
- Staff uncertainty: People don’t know if or how their role will change, their reporting lines or future prospects.
- Process paralysis: Two “non-negotiable” ways of doing things clash and slow everything down.
- System stalemate: Multiple CRMs, duplicated data, errors creeping in, clients getting mixed messages.
- Leadership disconnect: Owners present unity but disagree behind closed doors (or worse, in front of the team).
- Culture drift: One practice’s culture dominates, leaving the other team feeling disengaged and overlooked.
If you’re spotting even one of these red flags, your merger could already be on shaky ground.
These stories aren’t rare; they play out in advice practices every day. And by the time firms call us in to help, the costs are higher, the risks bigger and the fixes slower.
That’s exactly why Zestt Consulting and Tangelo Consulting created the Fit to Merge Assessment – a structured, practical review of your people, culture, systems and processes. It’s designed to spot the red flags early so you can align your team, streamline your systems, and protect the value of your deal.
If you’re planning a merger or acquisition, don’t leave the fit to chance. The Fit to Merge Assessment helps you anticipate risks and avoid the costly surprises.
The risk isn’t in the numbers – it’s in the fit.
Advisely Partner
Advisely Partner
