Airline Pilot Focused Dallas RIAs Unite; Smith Anglin Financial Merges with Rhoads Lucca Capital Management

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Dallas RIA to RIA deal creates regional firm with core focus on creating a “one-stop shop” for commercial airline pilot clientele, creating a half-billion AUM RIA for Smith Anglin in the Dallas market, a major airline hub. The search for a buyer took over a year due to the specific criteria outlined by seller; this is Smith Anglin’s first deal, and Advice Dynamics Partners managed the transaction, in its 5th year helping advisors find the right match.

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It’s really high stakes match-making, and when so much rests upon the right outcome, we are prepared to work for however long it takes to get it right - David Selig

Smith Anglin Financial, LLC, a Dallas RIA managing $357M in AUM at last ADV filing (Oct 2012) has merged with Rhoads Lucca Capital Management in a succession planning-centric deal that brings the combined AUM of the RIA to about $500M. Smith Anglin was selected out of a group of 10 regional and national RIAs including 3 well known consolidators, and highlights the growing trend of RIA to RIA deals.

The transaction took over a year to complete due to the very specific criteria the selling firm, Rhoads Lucca, had in selecting a partner, and was managed by M&A advisor David Selig, CEO of Advice Dynamics Partners, now in its 5th year of helping financial advisors navigate the increasingly complex and crowded landscape of potential buyers.

“I cannot stress enough how important it was to us to find the right fit for our practice – important for our clients, for our employees and for ourselves.” Says John Rhoads, Partner at Rhoads Lucca. “We outlined a set of criteria that was challenging to put it mildly and frankly the choice we made in the end would have appealed to me even if I planned on remaining with the business for another 10 years vs. retiring in one.”

The criteria for proceeding with this particular deal included finding a fit for Rhoads Lucca’s traditional RIA active and retired pilot clients as well as for the pilot 401(k) Autopilot® accounts managed by the firm. Smith Anglin’s tax planning proficiencies were also a very appealing element for the seller.

David Lucca adds: “Our custodian was fantastic in terms of helping to source potential suitors, but that’s not even half the battle – you need help with the discussions, the options, the negotiations – and David Selig was indispensable to this process.”

Selig comments, “In the independent channel today there exist choices for advisors as never before – and this trend shows no signs of slowing down. Advisors must be empowered to review every choice, and to understand all of their options, from the large model national RIAs to the smaller but equally viable regional RIAs.”

Among some of the other key considerations of the deal were the retention of all Rhoads Lucca employees, the different succession objectives of the sellers, as well as the understanding of the niche airline pilot market and aviation industry as a whole. Rhoads Lucca also stressed that the buyer have M&A experience under its belt – a deal point they notably waived for Smith Anglin, for whom this is the first acquisition.

Steve Anglin, CPA, Managing Partner of Smith Anglin, adds: “We are proud to welcome John Rhoads, David Lucca and their team aboard as our partners, and we have a tremendous amount of respect for the business they’ve built serving commercial pilots. The fact that we were the final choice for them among many well qualified competitors is a great honor.”

The combined firms help commercial pilots from Southwest, United, Delta, USAirways/American and FedEx, among others, to navigate their retirement and pre-retirement. While Dallas based, they serve clients in 45 states. Both firms deploy a defensively oriented investment strategy for clients, another reason the union appealed to both.

Advice Dynamics Partners, which brokered the transaction, believes that there are certain core truths about every independent advisory space transaction, and that they are as follows:

  •     No deal is simple, and each side must be treated with great care
  •     There must be a dedicated focus to find a match that is a strategic, financial, and cultural fit
  •     No matter how specialized the firm, you can be marketable
  •     There is a buyer for every seller – and accomplishing the right deal takes time

Anglin adds: “What we learned in going through this process was that it is one thing to state that you are ready to acquire, or to execute a succession plan, thereby triggering a wave of potential unions, and quite another to have a true veteran guide you through it every step of the way – you don’t want to wing it when it comes to these things.”

Selig concludes: “Ultimately it boils down to people – the financials are important, but you need to find the right compatibility at a human level. It’s really high stakes match-making, and when so much rests upon the right outcome, we are prepared to work for however long it takes to get it right.”

This is Smith Anglin’s first deal and it will be opportunistic about others.

About Smith Anglin

Smith Anglin focuses on strategies and investment platforms that are designed to help clients make the most of their life’s work. The firm operates as true partners, providing conservative, straightforward advice as well as insight at crucial times throughout clients’ lives. Founded in 1967 as a traditional accounting firm specializing in tax planning, Smith Anglin are experts in compensation and retirement programs, with 20+ years of experience in providing planning and financial advice. The firm offers free tax planning services, free customized financial analysis with multiple alternate scenarios for every prospective client, a survivorship assistance program as well as proactive, personalized client contact on a monthly, quarterly and annual basis.

About Advice Dynamics Partners

Advice Dynamics Partners is a full-service mergers & acquisitions consultancy serving middle market financial advisory firms seeking to sell, to merge, or to grow through acquisition. Our clients benefit from our collective experience and strength in strategic consulting, private equity, succession planning, and in managing complex transactions. On the Web at:

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Jason Lahita
FiComm Partners, LLC
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