Inorganic growth is viewed as the quickest way to increase your revenue. You can grow your firm by buying another and perhaps less obviously, selling yours. In this blog, let’s consider the pros and cons of being a buyer.

Pro #1: A fractionalized industry with aging advisors and advancing technology

 Advisory firms are fractionalized with many small firms owned by aging advisors scattered across the US. Aging advisors know a succession plan is a must. Many small firms have enviable profit margins, although margin pressure is growing caused by rising technology and compliance costs. Additional margin pressure results from the downward pressure on fees as the commoditization of portfolio management takes hold. The technology complexity and the rate of technological change are also challenging advisors.

Pro #2: An in-vogue investment with multiple sources of available M&A financing

Enhanced by a looming shortage of advisors, the independent advisory channel is a siren’s song to larger RIAs, consolidators and private equity firms who recently increased their interest and buying activity. Capital is easily accessible now as private equity and venture capital join the banks who specialized in financing advisor acquisition.

Pro #3: A growing pace of firm sales

The pace of selling has increased for deals both large and small therefore advisors are regularly reading about sales and likely have a peer they know who has sold which makes the concept of selling more common, acceptable and approachable.

Con #1: The ratio of buyers to sellers is 50 to 1

As self-selected alpha dogs, practically every advisor is a buyer regardless of AUM, age or a compelling value proposition. Advisors have been controlling their own firms and destinies for decades. While they intellectually know they need to hand over the reins, it is an emotional struggle as they are contemplating not just selling their firm but ending much of their identity. The enormity of this should not be underestimated by a potential buyer. 

Con #2: Many buyers lack a clear compelling value proposition

It takes more than saying you are a buyer to attract a seller. It takes more than just money too. A value proposition needs to include leadership, internal firm infrastructure, a succession plan, the latest technology, investment management, a clear benefit for the advisor’s clients and a post purchase integration plan. Lead off your discussions identifying how the advisor’s clients would benefit from the sale. Is their cost lower, is their service better and broader?

Con #3: You are competing against sophisticated well-funded buyers

Meeting a match at a custodial conference and continuing the conversation may still lead to a purchase but the competition is tougher now. You are competing with well-funded firms’ adept at M&A outreach, deal structure and integration. Previously not the focus, smaller firms are now targets as national RIAs with regional reach empower their regional offices to attract local tuck ins.

Final Thoughts

If you want to be a buyer, prepare your firm, confirm your value proposition and create an acquisition plan. It is difficult to run your firm and search for acquisitions simultaneously. Those firms who are successful consider acquisitions a business line. Allocate the needed human capital, yours or someone else’s, for the acquisition search.

The next blog will consider accelerating your growth through selling.

Next Steps

In an ongoing effort to meaningfully assist your success, we are excited to announce 2 new service offerings:

  • Concierge Consulting ‘Lite’ service provides the same foundational work as our full Concierge Service. Our industry experts crystalize your advisory firms’ vision and goals, and creates a guided Action Plan customized for your specific needs. Then you conduct the search. This new service level fits between the full white glove concierge service and the self-serve RIA Match platform. Contact us at to learn more.
  • Concierge Consulting ‘Review’ The RIA Match doctor is ‘in’. Spend a 45- minute session with Mary Ann Buchanan. Bring your questions and she will provide you with actionable step to achieve both your strategic and platform goals (includes screen sharing call and follow-up email with recommendations). Contact us at to learn more.

In addition, we’re excited to announce our latest support program ‘Subscriber-Plus’ a monthly conference call to demonstrate key platform features and functions.  We encourage you to send your questions in advance to and we also be answering text question on the call. We’ll announce the upcoming date shortly and send a registration email with the details.

Keep an eye out for our monthly Blog and Featured Profiles.  Remember to check out our Support section which has many 1-2 minute help videos.