The real reason advice mergers fail

Tangelo

Advisely Partner

9 days ago

Mergers and acquisitions in the financial advice sector are on the rise – and for good reason.

Scale brings efficiency, broader capability, and resilience in a changing regulatory and economic landscape. But while the strategic logic of merging is often sound, the execution is where many practices stumble.

The reality is that most advice businesses are built around relationships, culture and deeply embedded ways of working. These elements don’t show up in a financial model, but they’re often the reason a merger either thrives or quietly unravels.

Beyond the balance sheet

Legal and financial due diligence are essential, of course, but they’re only part of the picture. What’s often overlooked is “merge readiness”: the ability of two businesses to integrate not just their operations but their people, systems and values.

M&A failures rarely make headlines, but they’re felt deeply within businesses. Global research shows that 70% to 90% of M&A deals fail to achieve their intended goals, largely due to poor cultural alignment and lack of team integration.

Staff disengagement, cultural clashes, duplicated systems, and client dissatisfaction are common symptoms of poor integration. These issues don’t just slow growth; they erode trust and momentum.

Without a clear transition plan, even the most strategic merger can become a drain on leadership capacity. And when compliance frameworks and workflows aren’t aligned, the risk of regulatory missteps increases – along with operational inefficiencies.

Successful mergers require alignment across three key dimensions:

Culture: do the teams share similar values, leadership styles and client philosophies?
Process and compliance: Are workflows compatible? Can compliance frameworks be harmonised without disruption? How do we make policies consistent?
Capacity: Do leaders have the bandwidth to manage change while continuing to run the business?

Without clarity in these areas, even well-intentioned mergers can lead to disengagement, inefficiencies and client attrition.

A smarter way to merge

Forward-thinking advice businesses are beginning to treat M&A as a transformation, not just a transaction. This means investing in pre-merger assessments, transition planning and post-merger integration – with the same rigour applied to financial modelling.

Some innovative approaches include:

Cultural mapping: Using diagnostic tools to assess cultural compatibility before the deal is signed.
Digital twin planning: Creating a virtual model of the merged business to simulate workflows, client journeys and compliance processes.
Leadership capacity audits: Evaluating whether key leaders have the time, tools and support to lead through change.

These strategies unlock the full potential of the merger by ensuring it’s built on a foundation of alignment and readiness.

Help is at hand

For those advice businesses considering a merger, support is available. Zestt Consulting and Tangelo Advice Consulting offer a collaborative framework designed to address the human and operational sides of integration.

Zestt focuses on people, culture and change management, helping teams navigate the emotional and behavioural shifts that come with M&A.
Tangelo brings expertise in systems, compliance and process alignment, ensuring the merged business is scalable, efficient and future-fit.

The “fit to merge" framework

Our approach starts with a discovery workshop – helping businesses assess their readiness and identify critical gaps. From there, we offer customised transition planning, including IT and HR integration, client engagement strategies and ongoing support.

We don't focus on avoiding problems; the approach is all about unlocking the full potential of your merger and lifting energy, capability and long-term value.