The Wire

When it comes to deals, few things will facilitate or derail a deal the way the people involved will. Emotions and egos have an oversized impact on the success or failure of deals, and they can cause negotiations to rapidly break down over a perceived slight or imbalance that could have been worked out to everyone’s satisfaction.

I recently spoke with John Furey, the founder and principle of Advisor Growth, as a guest on my Fueling Deals podcast. John and his organization specialize in the financial advisor industry and in helping financial advisor firms grow, expand, strategize, and do deals of all kinds. John knows from firsthand experience the importance of keeping a level head and remaining fair to all parties involved, and he has also seen how emotions can have a chilling effect on deals.

What You Will Learn:

• John shares how he founded Advisor Growth Strategies as a go-to resource for professionals in the financial advisor industry. John describes the services and guidance his organization provides to its clients.
• John describes the types of deals and transactions his organization has been involved in, with a wide range of values. He explains why most of the transactions they have worked on have been for multi-partner firms.
• Learn why egos and emotions can be a detriment to any deal, potentially causing the deal to break down. John explains why a transaction advisor’s role is to make sure the numbers are fair for everyone and help smooth the process.

Anne Marie Stonich knew she had to make a change.

After five years at Brighton Jones, a large Seattle RIA, Stonich and two colleagues at the firm wanted to run a business their own way.

“We felt we could play an even bigger role in our clients’ lives, and have more control of our own,” she says.

1. Get Out While You Still Can

Valuations for RIAs are approaching their pre-financial crisis highs, according to David DeVoe, managing parter at RIA M&A consultancy DeVoe & Company. RIAs looking to sell can command between 4x and 6x cash flow for an $100 million firm, 5.5x to 7x for a $500 million firm, and as much as 9.5x cash flow for a $1 billion firm, DeVoe said.

What’s an RIA really worth?

Getting an answer, it seems, depends on what yardstick you use to measure it. Discounted cash flow has recently become the new de facto standard. But untangling how that model really operates, and what buyers and sellers should ultimately be keeping an eye on in the sales process, can be challenging.

Chalice Financial Network is upping the stakes in the competitive platform provider market.

Chalice has acquired Succession Link, an online matching service for RIAs looking to buy or sell their firms, and has forged a strategic alliance with Oak Street Funding, a bank subsidiary that provides commercial financing for financial service businesses.