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Meet Kevin Daniels

Meet Kevin Daniels 2017-11-13T21:06:10+00:00

Meet Kevin

An entrepreneur must often rely on such human qualities as courage, faith, intelligence, imagination, and perseverance to actualize success. Kevin Daniels possesses these qualities and more. His succession story is not only instructive to others that wish to grow their business through acquisitions, but inspirational to anyone trying to accomplish almost anything of difficulty. Upon meeting Kevin, one might get the impression that he is just a regular guy. However, when you spend some time with him, you become aware of his intelligence, determination, considerable knowledge, and empathetic nature. He will tell you that if you are driven toward your goals and are partnered with people who support you, good things will come.

Kevin, who holds a Bachelor of Science in Electrical Engineering and a Masters in Business Administration and Finance, owned and ran a number of unrelated businesses in the St. Louis, Missouri area. Since his heart was in finance, in 2007 he decided to focus on Tribute Financial and begin liquidating the unrelated businesses. For his new financial offices, he selected a cost effective but worn-out, run-down building that had been a nightclub owned by rock and roll singer Chuck Berry. Renovating the building proved to be a feat, resulting in Kevin obtaining a temporary stone mason and general contractor’s license for ninety days. After completion, Tribute Financial was born and headed straight into the great recession of 2008 complete with a new mortgage and one part-time assistant.

So in 2008, he took a contrarian approach and decided to expand when many of his peers were taking a step back. It seemed as though nearly every financial firm was downsizing in this difficult environment. Now in his 40’s and in the middle of a recession, Kevin knew that that he could not rely on referrals and prospecting, the formula that had brought him success thus far. Looking back, Kevin says “I was just a little guy, always concerned that Investacorp would drop me because I was so small, but Investacorp is in the business of helping advisors.” Something had to change, so he began to focus on acquisition in addition to organic growth. He believed larger offices had economies of scale, better service, and more access to technology. Investacorp’s CEO, Patrick Farrell had much admiration for Kevin’s “no big deal” approach so when the plan for acquisitions was discussed, Patrick‘s team began looking for other Investacorp branch offices that were likely to be sold or closed.

ACQUISITION #1

Investacorp had an advisor in the Florida area that was looking to sell their practice, and they suggested Kevin give him a call. After the initial contact was made, there seemed to be mutual interest, but no follow up. Eventually, the owner’s wife contacted Kevin and apologized for not responding to his calls, explaining that her husband had just passed away. Kevin told her he did not want to be insensitive at such a tragic time, and to get back to him whenever she was ready. The woman told him that this was exactly the time to discuss it as she needed to sell the business immediately. Typically when an advisor passes away, the assets disappear almost immediately, but Kevin managed to retain about 30% of the company’s clientele. With the support and advice of Investacorp’s Patrick Farrell, and lnvestacorp’s Director of Financial Planning and Due Diligence, Curt Knapp, Kevin turned this challenging acquisition into a modest success.

ACQUISITION #2

Now having some familiarity with acquisitions, and the strong opinion that it provided a dramatic path for growth, Kevin eagerly looked for other companies to acquire. Investacorp once again connected him with an office in Kentucky that was looking to sell. It was a pure commission business, which usually has high rates of attrition under new management. This particular seller was too ill to play a role in the transition process, so Kevin met clients on his own. Without the retiring advisor’s active involvement, meeting clients was similar to cold calling. Over time Kevin retained approximately 60% of the clients and he knew that his learning curve was improving. Once again, he quickly adapted and made this acquisition a successful venture.

ACQUISITION #3

By 2009, Kevin had assessed five practices for possible acquisition and secured two with modest success. He was now a firm believer in the value of growth by acquisition. Burke Esposito & Associates, a highly regarded and sizable firm, was looking to sell. It was located in Wallingford, Connecticut (1100 miles from St. Louis) and Mark Esposito, the owner, was looking to provide continuity with a Connecticut-based firm. Paramount for Mark was proper treatment of his employees and clients. When you are in Mark’s presence discussing his list of priorities, you realize this is not just a polite thing to say; instead it is at the very heart of his business career. A number of offices, not part of the Investacorp network, were interested in Burke Esposito, but there was a fear that they may force clients into models that focused on probability above all or not retain the current staff.

Kevin and Mark were acquainted with each other from conferences and industry meetings, and Patrick Farrell knew that they held similar values and ethics. Patrick decided to set up a meeting between the two parties. Mark was in blessedly good health as was his company. Burke Esposito still wanted a Connecticut buyer, as the belief was held that it would be more acceptable and comforting for clients. Kevin was from Missouri and thus, was a risk due to the distance. However, Patrick Farrell, had not only witnessed, but was instrumental to Kevin’s successes. He was aware that many of Kevin’s “no big deal” virtues were, in fact, a very big deal and Kevin could bring to bear his track record of creating improbable successes in distant locations.

As Mark stated, “The more I got to know Kevin the more I liked him, and the more confidence I had in him.” Mark was still concerned about Kevin wanting to acquire a business larger than his own and headquartered so far away. It was a risky proposition, but Mark felt Kevin was authentic. Mark had numerous reassuring calls about his character and capabilities from Patrick Farrell, Richard Lampen, Ladenburg Thalmann Financial Services Inc.’s CEO, and Philip Blancato, President of Ladenburg’s Asset Management division. They believed that if anyone could make this a success, these two men were capable.

For this acquisition, Kevin did a full year of due diligence prior to a contract. He never hired a CPA. Instead, he ran each analysis himself. There were perhaps twenty meetings between Mark and Kevin. Negotiations commenced and broke down completely more than once. Both men wanted to keep any Burke Esposito employees that wanted to stay, which was another strong consideration for Kevin. Additionally, they agreed to keep Mark on for a full two years after the sale.

Mark brought in an attorney at this point, but believes he over-complicated the process and nearly killed the deal as did several other stumbling points along the way. There were many people that said Kevin was risking too much and the current economic environment would end both companies. Looking for a neutral opinion, eventually Kevin picked up the phone and called a renowned economist. He was able to speak with him directly to get unbiased and clear advice. He was instructed to ”press on with your plan”. Finally taking a bold step, he agreed to move his wife, six children and two dogs from Missouri to Connecticut. However, just days before they were ready for contracts, the negotiations completely broke down and the process ended. The decision was made not to proceed with the acquisition. After more than a year’s work, all seemed to be lost. Then in a pivotal moment, minutes later, Kevin picked up the phone

THE INTEGRATION OF A NEW PRESIDENT INTO AN OLD BUSINESS

When it comes to integrating two businesses and unique personalities, Kevin prefers a slow and calculated method. So, when it came time to infuse a new personality to the Presidential spot, the consensus was to keep everything the same. The phone greeting remained the same as did the office furniture. In the beginning it looked, and acted like the old company in every detail. The name of the company did not bear that of the new owner. The focus on “A share” mutual funds remained the same. Investacorp continued to be the broker-dealer and Fidelity, the clearing firm. As mentioned, all of Burke Esposito employees remained in place, including the former owner. Kevin even preferred that Mark keep his master office, while he took the intern office. Kevin’s business cards did not bear a title as his priority was that Burke Esposito’s clients feel absolutely secure and comfortable with the transition. Kevin gradually made changes. He applied his keen ability at cost cutting in every area. They transitioned into a paperless office with better technology which also reduced costs. Both Mark and Kevin believe that the business is now a combination of the best attributes of both Tribute Financial and Burke Esposito.

THE RESULTS

Tribute Financial is now steaming forward with new purpose and there have now been many changes. The succession process has been an unmitigated success. Both the St. Louis office and the New England office are growing from client referrals and continue to become more cost effective and thus more profitable. Both locations are completely renovated and have new life. Now with approximately 350 million in assets, Tribute Financial is more committed to the acquisition process than ever, and mindful of the next opportunity. Kevin believes they have only just begun.