• Home: Leading Financial Advisor Recruiting Firm
  • About Us
    • Meet the Team
    • Testimonials
    • Case Studies
    • Representative Deals
  • Services
    • For Financial Advisors
    • For Independent Business Owners
  • FAQs
  • Articles
  • Podcast
    • Industry Update
    • Independence 101 Series
  • In the News
    • Moves in the News
  • Tools for Advisors
  • Diamond Consultants Advisor Transition Report 2022
  • NEW – Edward Jones Advisor Transition Report 2022 edition
  • NEW – Merrill Advisor Transition Report 2022 edition
  • NEW – UBS Transition Report 2022 edition
  • Merrill Information Hub
  • UBS Information Hub
  • Contact Us
  • Subscribe for Updates

Questions? Call us: 908-879-1002

Contact us...
Diamond Consultants: Financial Advisor Recruiting FirmDiamond Consultants: Financial Advisor Recruiting Firm
  • Home
  • About
    • Meet the Team
      • Mindy Diamond
      • Louis Diamond
      • Howard Diamond
      • Jason Diamond
      • Barbara Herman
      • Deborah Aronson
      • Wendy Leung
      • Cathy Nichols
      • Debbie Wallen
      • Allison Brunwasser
      • Joshua Tomolak
      • Shelley Muzio
      • Caryl Felicetta
      • Donna Riopel
      • Kelly Griffiths
    • Testimonials
    • Case Studies
    • Representative Deals
  • Services
    • For Financial Advisors
    • For Independent Business Owners
      • Sell-Side M&A Advisory
      • Consulting
  • FAQs
  • Articles
    • Subscribe for Updates
  • Podcast
    • Industry Update
    • Independence 101 Series
    • Subscribe for Updates
  • In the News
    • Moves in the News
    • Transition Announcements
  • Tools for Advisors
    • NEW – Diamond Consultants Advisor Transition Report 2022
    • NEW – Edward Jones Advisor Transition Report 2022 edition
    • NEW – Merrill Advisor Transition Report 2022 edition
    • NEW – UBS Transition Report 2022 edition
    • Merrill Information Hub
    • UBS Information Hub
    • Other Tools
    • Subscribe to e-Newsletter

To Stay the Course or Reach Higher – The Choice is Yours

Diamond Consultants Articles for Financial Advisors

To Stay the Course or Reach Higher – The Choice is Yours

Posted by Mindy Diamond

By Mindy Diamond

“I love being an advisor and have built a great practice. My business generates more than $3mm in annual fee based revenue and it affords me a lifestyle far better than I ever imagined. I have a top notch staff and wonderful clients with an aggregate $550mm in assets under management.” Perhaps change the stats but I’m betting that this sounds familiar to you- and what a wonderful position to be in. There’s no dilemma at all until you get a call from a recruiter like me telling you that he/she is representing a spectacular opportunity- a fee only RIA firm with $3B under management servicing approximately 250 high net worth client households, and generating $20mm in annual revenue. This firm is looking to grow by acquisition or merger, is very well capitalized and is interested in you and your business. It’s a high class problem for sure, but nonetheless the query certainly raises some very important issues that you will eventually need to reconcile:

1. Growth Trajectory: Can my firm sustain its current trajectory? What are my overall growth goals and can I reach them by staying the course? Will organic growth alone be enough? Will what got me “here” be enough to get me “there”?

2. Succession Plan: Are my firm’s business development efforts entirely dependent upon me? Could the firm succeed me if I were hit by the proverbial bus tomorrow? And, if I were out of the picture, what would happen to the value of my firm?

3. Cost of doing business: It’s so much more expensive and challenging to run a small business today than ever before and, thus, harder, for a standalone independent to sustain itself. Factor in rising labor and client acquisition costs, and increasingly onerous regulatory demands, and it’s not easy to maintain desired profit margins.

4. Gap Analysis: If I take an honest assessment of where my firm is at today, what are the things I need to solve for? Where do we need to make an investment? Should we add to staff? How do we improve our service offering, solution set and process in order to remain relevant, efficient and profitable? Are we willing and able to make the necessary investments?

So, here’s the calculus. If you believe that you can reach your goals in a reasonable period of time by staying the course, then that is exactly what you should do. After all, the likely reason you decided to become a business owner in the first place as opposed to an employee advisor is because you value autonomy and control of your destiny more than anything. The rub, though, is that overall enterprise value is impacted most by profitability, sustainable growth trajectory, client retention, a business development function that succeeds the principal(s), and scale. So, not solving for these things may leave you short of your desired end game. And, a super competitive recruiting landscape makes it very difficult to hire your way into plugging the necessary holes. Thus, those that value maximizing enterprise value, scale, and an expanded capacity/solution set more than they value their complete independence might respond favorably to overtures from prospective acquirers. After all, “a rising tide lifts all boats” and the RIA space is no exception. Firms that solve for all of the things that most impact value will benefit from enhanced multiples. The choice is yours- it’s your business life, and you get to live it any way you desire.

You may also be interested in...

Share
0

About Mindy Diamond

CEO – By counseling advisors on how to ask the right questions and “dig deep”, she helps them look at all of the opportunities available to find the one that allows them to reach their full potential. That is, to best serve their clients and live a life that is in sync with their own beliefs and values. Learn more...

    Subscribe for Updates

    Get updated by email when a new article is added.


    Listen. Here. Now

    Recent News & Articles

    • What’s the ‘Real’ Value of a Financial Advisor’s Business?
    • Growth Through Media and Innovative Solutions: How Ross Gerber’s $2.2B Firm Found a Resounding Voice in Independence
    • Considering a Move? Here’s What You Need to Know: A Special Industry Update
    • Questions Every Advisor Should Ask Before Considering a Move: A Special Industry Update
    • Valuation Expert FP Transitions: On M&A, Growth, and Maximizing Enterprise Value
    Schedule a Complimentary Consultation
    We're available to answer your questions. Contact us

    Connect with us

    Search

    © 2023 · Diamond Financial Consultants, LLC t/a Diamond Consultants. All rights reserved.*

    • Leading Financial Advisor Recruiting Firm:
    • About
    • Services
    • FAQs
    • Articles
    • Podcast
    • News/Media
    • Tools/Resources
    • Contact
    • Our Locations
    • Privacy Policy
    • Site Map