CFO Intelligence Magazine – Winter 2024
Diana H. Pereira
Pensionmark CFO
About a year after CFO Diana H. Pereira joined Pensionmark Financial Group (Pensionmark) a Santa Barbara, Calif.-based retirement and financial planning registered investment advisor supporting more than $76 billion in assets across its network she found out that the company was in talks to be acquired by Tinton Falls, N.J.-based World Insurance Associates LLC.
Fortunately, the best practices that Pereira a veteran finance officer with M&A, investment management and other experience had set up helped to position Pensionmark for the transition to World, one of the nation’s fastest-growing insurance brokers.
“Although the World deal was not on the table at the time I joined Pensionmark as Corporate Controller (she was promoted to CFO in February 2022), our CEO Troy Hammond supported my recommendations to invest in NetSuite, a cloud-based ERP (Enterprise Resource Planning), and Boomi, a system that maps to our custom commission engine built in Salesforce, which allows us to connect various systems through APIs (Application Programming Interfaces, or software systems),” she says. “My team and I worked to migrate our financial system to the cloud-based environment, which resulted in a system that was more robust than World’s, at least in my opinion. Our parent is now working to implement a similar system.”
CREATING A FRAMEWORK
Pereira and her team also implemented tracking and other systems that “later formed a foundation for the due diligence auditing that was necessary when we were later acquired by World,” she adds. “The raw data was always there, but the team from World wanted to be able to access and validate a lot of information; and thanks to our modifications and the systems Pensionmark built from its beginnings, we could easily access it and package the data in custom reports that met their needs.”
There is a caveat to that statement, however: the data that existed prior to her tenure at Pensionmark “was not quite as detailed and accessible,” Pereira explains. “For example, depending on the branch-level reporting source, we had cash-basis reporting details, which meant there were a few hoops to jump through for conversion to accruals. Consequently, we supplied cash-level details and our consultant completed prior-year conversions.”
Pensionmark’s Finance department worked closely with Compliance and World’s consultants to identify and address any potential risk issues none emerged and Pereira was able to draw on her previous M&A experience for valuation and other issues. “I’ve been through the drill before,” she says. “As part of the due diligence stage, our department supplied profitability data and validated it; and we highlighted costs and expenses that may be duplicated and eliminated post-acquisition. And similar to other business combinations, the acquirer used