Tastykake was a family-owned baking company and a Philadelphia institution. One Philadelphia resident when interviewed by a local TV station in 2011, when it became well known the company was in poor financial straits, said, that Tastykake going out of business would be "like life without music".

Growing up in Philly and the surrounding region, everyone had their favorite such as the butterscotch Krimpet, chocolate Kandy Kakes, lemon or blueberry pies, etc. Tastykake had a cult following initially in Philly and then many other areas of the US, until the baking company was acquired by Flower Foods in 2011 and then our Tastykakes never seemed to taste the same. Once no longer family-owned but rather 100% owned by a large food conglomerate many in Philly believe the recipe changed, the size of the krimpets are smaller, and the common refrain is Tastykakes are now "half the size and twice the price".

So what does Tastykakes have to do with RIA/wealth advisory business minority stakes? Actually quite a bit and many parallels, pitfalls as well as opportunities to avoid having your business and, potentially your clientele going the way of the original Tastykake.

Many RIA and wealth advisory firms have been 100% acquired by aggregators, roll up firms, private equity firms, and/or merged into significantly larger organisations. And not unlike Tastykake, the acquired and/or merged firms "recipes" have changed (e.g. proprietary money management is pushed, limited access to alternative investments/real estate offerings, mandates to use the new firm's CRM, slimmer offering of financial planning tools, in house attorneys versus outsourced estate planning experts, etc). Management and ownership has changed. Support and service is reduced or curtailed. Economics have worsened in the form of decreased profit sharing, gross payouts being reduced while expenses have stayed the same or risen. Compliance policy has changed or worse yet become more onerous.

So how do you monetise your business, perhaps take some of your proverbial chips off the table, without giving up control while continuing to grow your business as well its enterprise value? The answer in many scenarios is sell a "minority stake", only a portion of your business and/or revenue, say 5%-25%, while continuing to retain majority ownership.

As you may be aware, there are a number of options within the "minority stake" space such as independent broker-dealers, enterprise groups, private equity firms, RIAs and roll-up platforms. As an independent RIA/financial adviser consultant, the minority equity partner I prefer, in the appropriate scenario, is the family office. One preference stems from my personal experience and familiarity with family offices from my time as a Chief Market Strategist who was involved in founding a de novo single family office and co-managing the same for approximately 5 years.

However, outside of my personal preference, every wealth advisory business, RIA, wealth management entrepreneur needs to at least consider the following reason(s) to contemplate a family office as your minority equity stake partner:

1. Offers support and capital to grow your business while allowing you the freedom/autonomy to maintain the independence that has contributed to your success vs more restrictive governance with PE/aggregator investor
2. Patient and flexible capital vs PE (more restrictive and less growth)
3. Strategic growth partnership with an organisation that has a track record of building successful businesses while working with you to unlock value and new levels of growth
4. Financial strength for further growth and monetisation (eg, financing tuck-ins and acquisitions), expanding services, or adding operational capacity as well as efficiency
5. Access to exclusive investment opportunities, "club" deals and family office concierge services

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