Added on April 2014 in M&A Issues
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Summary: The number of merger and acquisition deals among registered investment advisors jumped 20% in 2013 versus the prior year, according to figures from Schwab Advisory Services. At the same time, the total assets purchased in those deals dropped by 26% and the average deal size sank by 38%.That’s because the largest share of the 54 transactions done last year were RIAs buying other RIAs (44%), as opposed to 2012 when so-called strategic acquiring firms were the leading buyers and accounted for 53% of the 45 deals.
Added on March 2014 in M&A Issues
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Summary: When advisors think about growing their business and building scale, an inevitable underpinning of the strategy is either deploying a recruiting campaign to attract advisors with a book of business, or trying to develop a functional M&A plan to merge with or buy another independent advisor. There is something intriguing about this phenomenon: most independent advisors fail to realize that many of their peers want to do the exact same thing!
Added on March 2014 in M&A Issues
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Summary: As more and more Baby-Boom-vintage advisory firms come up for sale or succession these days, the question of valuation is a recurrent theme. There are many methods to value a “small business” such as independent advisory firms—discounted cashflow, a multiple of earnings, a percentage of client AUM, etc.—but revenue multiples get little respect these days.
Added on March 2014 in M&A Issues
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Summary: More than a decade of pitching mutual funds and annuities to financial advisers convinced G.C. Lewis of two things: He wanted to become an adviser himself, and building one from nothing would be a huge challenge."It's very difficult today to start a financial-advisory practice from scratch," says Mr. Lewis. "The old days of cold calling don't work nearly as well...Today, more investors are looking to find advisers through referrals."
Added on March 2014 in M&A Issues
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Summary: Sandy Johnson's best business decision was to participate in an Ameriprise Financial Inc. experiment 20 years ago that brought individual advisers together to operate as a group practice. Today, her Proviant Group boasts operational efficiencies that would turn both smaller and larger firms green with envy
