Accounting-Based Advisory Firms Team Up To Create $3 Billion Giant


Milwaukee firm Wipfli and North Dakota firm Eide Bailly are merging their operations to become one of the country's top-tier accounting concerns.


The merged entity will have 41 U.S. branches and 70,000 clients.


But the big news here is that those clients represent $3 billion in AUM. That's not much on a per-client basis -- maybe $45,000 per account -- but as you can see, these numbers do add up.


While building that kind of mass-market scale from scratch would be a nightmare for many high-touch advisors, this deal points out that it is possible with the right combination of organic growth and opportunistic M&A.


All in all, EB Wipfli is looking to squeeze $300 million in revenue out of its clients this year. That obviously isn't a pure fee-on-assets proposition, since it would translate to a management fee somewhere in the 10% range.


More likely, the firm is generating maybe $30 million a year from wealth management and the rest comes from completing tax returns and other services.


That's an important thing to keep in mind. Accounting is relatively independent of the ups and downs of the financial markets.  


That reliable cash helps these companies finance their M&A activities. 


Other types of advisory firm also cultivate annuitized revenue streams in the form of annual fees or trailing commissions, but EB Wipfli has that, too.


How can non-accounting-oriented advisors create a similar business proposition for themselves?

How can 

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