By Mindy Diamond, Forbes.com – For employee advisors who are taking a “bigger picture look” at their business, here are 3 valuation scenarios to consider that can help you determine if where you are currently practicing will allow you to maximize value at the end of the day.
“Advisors that are wanting to sell not only because of the robust market but because they think it’s the right time to find that strategic partner want to lock in this year’s capital gains rate,” says Carolyn Armitage, a managing director of Echelon Partners, an investment bank in Manhattan Beach, California, that is focused on financial advisory firms. “Everyone is expressing an interest in closing by year-end.”
By Louis Diamond, CityWire.com – In years past, a $1B+ independent firm would have automatically considered themselves a legitimate buyer. But today, with the red-hot M&A market spurred by scores of private equity capital, serial acquirers, and the emergence of mega-RIAs boasting a full suite of comprehensive client services, AUM is no longer a predictor of buyer status.
Louis Diamond Quoted – By Gary Stern, RIAIntel – RIAs must do more to retain talented older advisors. The average advisor is 51 and “nearly one-third of RIAs will retire in the next 10 years, representing 38.4% of assets.” Having extensively consulted about succession plans and RIA mergers and acquisitions, Louis Diamond, executive vice president at Diamond Consultants, based in Morristown, N.J. and New York City, recommends three strategies for firms dealing with advisors eyeing an early exit.
By Louis Diamond – While bigger isn’t always better, the fact remains that smaller independent practices can benefit by understanding the example set by larger firms when it comes to “scale.” Simply put, most larger RIAs have optimized the management of capital, infrastructure, buying power and resources, resulting in a well-oiled machine that has mastered an optimal balance of organic and inorganic growth.
By Louis Diamond – While mergers and acquisitions are typically associated with existing RIAs and independents, the fact of the matter is that anytime an advisor is offered a recruitment package from a brokerage firm, that firm is in essence “buying” a business and conducting its own due diligence process to assess value—so understanding that value is imperative.
By Louis Diamond, Citywire – We are in the midst of a seller’s market, with announcements of mergers and acquisitions (M&A) continuing to dominate the headlines. In the first half of 2019, Fidelity Clearing and Custody Solutions reported 73 M&A transactions. Of those, 67 were RIA deals worth a total of $69.5 billion in assets, and six were independent broker-dealer transactions weighing in at $391 billion. What’s more, movement out of the traditional brokerage world has continued to accelerate.
Louis Diamond Quoted – By Garrett Keyes, Financial Advisor IQ – The market for RIA M&A is more active than ever, pundits say. In the second quarter of this year, more transactions were executed than in any quarter before, a DeVoe and Company study shows. But the number of deals isn’t the only record-breaking statistic. Valuations in RIA mergers are the highest they have ever been and have reached levels DeVoe founder David DeVoe has “not seen during the 16 years [he has] focused on RIA M&A,” the study reads.
By Louis Diamond – Many independent firms reach a point in their business lifecycle where they can no longer sufficiently grow or compete on their own. It’s when discussions around finding a way to gain scale and solve for succession hit a wall that firms often turn to considering a merger or acquisition opportunity. Yet finding the right M&A partner isn’t all that easy.
By Louis Diamond – CityWire – Many independent firms reach the point in their business lifecycles where they can no longer sufficiently grow or compete on their own. When the discussions around finding a way to gain scale and solve for succession hit a wall, firms often start to consider a merger or acquisition opportunity. But finding the right M&A partner isn’t all that easy.
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