Transforming Financial Planning: Lessons from a Near-Death Experience

How the $9B Merger of Financial Firms is Reshaping Wealth Management

Update Merger of Minds: The Birth of a $9B RIA in PittsburghIn a remarkable shift within the financial advisory landscape, BilkeyKatz Investment Consultants, an institutionally oriented advisory firm, is merging with wealth management provider Oakmont Capital Management to form a new entity valued at $9 billion. While the merging of firms is not an uncommon phenomenon in the financial services sector, this particular consolidation showcases a strategic alignment focused on enhancing service capabilities for a diverse clientele base.BilkeyKatz, which has a strong foundation in managing institutional assets typically ranging from $20 million to $1 billion, will continue to operate under its established name. Partner and head of consulting services, Patrick Fisher, emphasized that the merger will not change the visible identity for clients but will rather strengthen the entity’s offering significantly.The Strategy Behind the MergerThe conversation that culminated in this merger began during a casual lunch between Fisher and Oakmont's founder, John Koteski. Acknowledging the rising operational costs of software and database management, they identified a combined entity as a means to streamline expenses while simultaneously enhancing their service capacity. This insight into the operational challenges facing financial advisors today illustrates a broader trend in the industry where efficiency and diversified services are paramount.“The merger reflects our joint commitment to fiduciary responsibility and objective investment strategies,” Koteski remarked, indicating an alignment not just in operational efficiency but also in corporate philosophy. A focus on tailored investment solutions positions the new firm favorably within a competitive market, where personalized service can differentiate them from others.What It Means for ClientsThe merger will expand BilkeyKatz's capabilities significantly, allowing it to offer discretionary investment management services and adopt an Outsourced Chief Investment Officer (OCIO) model. This transition marks a significant departure from the traditional non-discretionary consulting model that has dominated for years. As Fisher noted, “It opens us up to some growth.” The projected client base expansion is exciting, encompassing not just families but also institutions, foundations, endowments, and corporate retirement plans.This notable merger also showcases a growing trend among financial advisory firms—a shift towards more comprehensive service offerings that meet the evolving needs of clients. For wealth managers, this trend signals a potential re-evaluation of strategies toward more holistic approaches in wealth and investment management.Long-term Vision for the New EntityFounded in 2002 by Terry Bilkey and Jerry Katz, BilkeyKatz has always maintained an employee-owned structure. With the impending merger set for completion on October 1st, Fisher expressed a strong commitment to preserving this model, reinforcing the firm's core values while facilitating a platform for growth.The merger between BilkeyKatz and Oakmont serves as a crucial reminder of the importance of adaptability and innovation in the wealth management sphere. As costs rise and client expectations shift, firms must be willing to explore new models while remaining true to their foundational values—a critical balancing act in an increasingly complex financial landscape.