Larry McManus built LFM Wealth Management with a clear niche: serving high-tech and pharmaceutical employees in North Carolina’s Research Triangle Park. “We knew there were a lot of employees—about 30,000—with company stock, whether pre-IPO, incentive stock, or employee purchase options,” Larry explains. “A lot of people didn’t know how to diversify it, understand the tax implications, or handle generational wealth fairly early.”
The firm’s growth strategy was distinctive. “We had about 15 different educational seminars that covered everything from incentive stock options to employee stock purchase options to 401(k) diversification. We literally did that for the first 10 years, rotating through employers in the park. We built the business around that.”
Twenty years later, LFM had grown into a multi-generational practice with clients in 30 states. But Larry and his partner faced a critical inflection point. Larry recalls, “We knew our CRM was maxing out. Our trading platform was definitely maxed out. We needed somebody who already had the platforms we knew we needed to expand into.”
The decision: find a partner who could provide the infrastructure they needed without borrowing money.
The Solution
Larry’s path to Gladstone began hearing Derek Bruton speak at a conference. “I was really impressed with Derek’s presentation. First of all, they weren’t an auction house, which is predominantly what we’d seen. And regional players trying to shop you to merge firms didn’t make sense given how we grew.”
What made Gladstone different became clear when Larry attended the Gladstone annual M&A conference. “It was really at the conference when I got it. You had the buyer’s panel, the seller’s panel, and I had sidebar meetings with about four buyers. I realized this is a lot more complicated than I thought it was going to be.”
Within weeks of the conference, LFM engaged Gladstone officially.
Understanding Complexity: “This is the biggest transaction you’ll ever do, period,” Larry emphasizes. “It’s bigger than buying a house, sending your kids to college. For us, it’s been our life work for the last 20 years. You’ve got closing attorneys, trailing E&O insurance to buy, M&A attorneys. It’s too complex to not involve somebody else.”
Industry Knowledge and Relationships: “Not only did Gladstone have what I felt was a strong team that understood the industry, but they knew the players. I had met some of the buyers at the conference. I felt like I was in good hands, and that whole process was continually reinforced.”
Critical Resources: When Larry’s CPA advised him to use an attorney specializing in RIAs, he was stumped. “I knew a lot of attorneys, but no one in that space. Derek said, ‘Look, I’ve got two people you can talk to.’ That was the easy part.” The same proved true for E&O insurance and other specialized needs.
Acting as Buffer: Perhaps most valuable was Gladstone’s role during negotiations. “It was much nicer to have an internal negotiator to handle those rough spots that could impact your relationship longer term,” Larry notes. “At the end of the day, you’re going to be married to these people. Negotiations can be hard—there’s give and take, back and forth. It’s sort of like going to a marriage counselor before you got married.”
The contrast with auction houses was stark. “They pretty much just put you up, wait, and then say, ‘Here’s the deal, here’s a contract.’ It wasn’t the level of personal service we got from Gladstone and Derek.”
The Impact
The transaction moved quickly. The CIM went out in early July. By late August, they were down to 10 prospects. Three finalists by early October. Final selection by the first week of October. Closed December 20th.
“Derek told me we’d be done by November,” Larry laughs. “I was aghast—really, that fast? But he said, ‘You’re clean, you’ve got a great business.’ He was right.”
Post-transaction, Larry reflects on the decision with satisfaction. “I wouldn’t change anything. We made the right decision coming into it, we got the right partner to help us get there, and we picked the right firm that has the best fit for our clients and our employees and can help us move forward.”
The partnership with Modern Wealth Management delivered capabilities LFM had wanted from the beginning. “In our original business plan written in 2001, we wanted an estate attorney and a CPA on staff. At Modern, we had 14 clients use us for tax this year. We have estate planning in-house with three clients going through that process. We’re capturing more share of the client’s financial mind space.”
Perhaps most rewarding is the organic growth infrastructure. “We’re excited about the organic growth engine and the call center. We’d had fairly strong organic growth at about 8% a year, but we knew we could do more.”
The multi-generational approach that built LFM continues. “One of my clients’ sons, who I’ve been mentoring for a couple of years, was hired by Modern to go into the call center. He’ll come back to our North Carolina office eventually. That piece has been a lot of fun.”
Larry now travels to Kansas City to teach the call center team about employee stock options—his original niche. “I like to teach. Teaching that team about employee stocks and all the different things around that helps them have more intelligent conversations. It’s giving back.”
For advisors considering a similar path, Larry’s advice is clear: “Gladstone was there all the way through. They really helped us understand what was going on. I think they gave us great advice, and they were worth every penny.”