Part 1 of a 2-Part Series with Louis Diamond

About this episode…

M&A has been one of the hottest topics in wealth management over the last few years. And that comes as no surprise with both the number and size of deals rising year over year for nearly a decade. For example, the 307 deals in 2021 represented an increase of nearly 50% over the 205 deals in 2020. And 2022 is off to a strong start.

The excitement around this activity has many an advisor considering their future—whether they are employees looking at their firms’ retire-in-place programs; a younger advisor with their sights set on building for the long-term; or an independent business owner looking to advance their business to the next level.

That is, they all have one thing in common: The desire to create an enterprise that will at some point garner the attention of acquirers with deep pockets.

Ultimately, they’re wondering, “If I build an independent firm, who will buy it?”

There’s a lot to unpack here, so much so that we’re dividing this into 2 parts. In this episode, we’ll talk about the potential, including:

• A breakdown on valuations—and how they are derived.
• Understanding EBITDA (earnings before interest, taxes, depreciation, and amortization) and EBOC (earnings before owner compensation)—and how each impacts valuations.
• Selling an independent practice vs taking a recruitment deal—and why it might make sense to defer the upfront check.
• M&A vs a retirement package—and how many advisors are opting to build their own retirement plan as independents.

Plus, Mindy and Louis share examples of breakaways whose firms were recently acquired, with some thoughts on what made them attractive acquisitions.

Then stay tuned for part 2, where we’ll explore who the potential buyers are, what they are looking for and offer tips on how best to prepare your firm to obtain the highest valuations.

And be sure to download the M&A Readiness Assessment mentioned in these episodes.

Download: M&A Readiness Assessment

Please note: Your information is shared only with our firm in complete confidence and without obligation.

Mentioned in This Episode

How this $2.5 Billion Team Saw Past the Handcuffs of Deferred Compensation
A conversation With Margaret Dechant, CEO and founding partner of 6 Meridian. Listen->

Life After Goldman Sachs: A Story of Extraordinary Success
A conversation with Justin Berman, Founder and CEO of $3B Berman Capital Advisors. Listen->

How “Transparency” Propelled Growth from $1 to $4 Billion in 8 Years
A conversation with Forbes Top Advisor Paul Pagnato, CEO Founder of PagnatoKarp. Listen->

A Best-of-All-Worlds Model: Full-Service Independence with Equity Upside
A Conversation with Jim Gold, CEO and Founding Partner of Steward Partners. Listen->

Disrupting the Landscape: How a $12B+ Multi-Family Office is Making Waves Amongst Advisors and Their Clients
A conversation with Avy Stein, Founder and Co-Chairman of Cresset. Listen->

More Related Resources

What’s the ‘Real’ Value of a Financial Advisor’s Business?
Headline-making M&A deals in the independent space have many employee advisors wondering what their business could be worth on the open market. Here are 3 valuation scenarios to address that curiosity. Read->

Determining Enterprise Value: 7 Key Qualitative Drivers for Sellers
We are in the midst of a “seller’s market,” where announcements of mergers and acquisitions continue to dominate the headlines. Additionally, movement out of the traditional brokerage world has continued to accelerate. Read->

Looking at M&A from the Acquirer’s Side of the Table
Part 1 of a 2-Part Series on M&A—A conversation with Karl Heckenberg, President & CEO of Emigrant Partners. Listen->

Looking at M&A from the Seller’s Side of the Table
Part 2 of a 2-Part Series on M&A—A conversation with Jeff Concepcion, Founder and CEO of Stratos Wealth Partners, and special guest host Louis Diamond. Listen->