The Wire

May 9, 2013

How Money Gets Downplayed in RIA Deal Making

There is one thing that buyers and sellers of RIAs, independents, and wirehouse advisors can agree on: Many of the good ones are taken.

In other words, buyers don’t think sellers “get real” and vice versa. If the RIA M&A market weren’t so tragically congested, you might think this finger-pointing was funny, but getting past the humor, what are these would-be deal-makers really trying to say? See: Schwab 2013 RIA M&A data show hope but also futility.

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May 8, 2013

Are Independent Advisors Built for Accelerated Growth?

The Alliance for RIAs (aRIA) today released the fourth of a four-part whitepaper series for advisors called Creating Value and Certainty Within Your Independent Advisory Firm.

The series of papers is based on the combined experience and observations of the six aRIA members, all RIAs who collectively manage over $20 billion of client assets. Each aRIA advisor has demonstrated a track record of extreme asset and revenue growth and is providing leadership on how advisors can run a better business.

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April 14, 2013

Focus Financial Goes After $100-Million Wirehouse Brokers

In a major shift, Focus Financial is preparing a new small-ball strategy aimed at wirehouse advisors whose assets range from $100 million to $200 million that includes adding .

Rather than just going after the giant superstar advisors, the aggregator of RIAs is looking to go down-market, grabbing profitable advisors to tuck in to existing Focus Financial Partners LLC RIAs. The difference from other roll-ups with professed tuck-in strategies is that Focus makes the firms go through a sort of RIA residency during which time they remain in a limbo-like state before being placed into a permanent foster home.

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February 28, 2013

This RIA Recruited the Morgan Stanley Manager Who Almost Recruited Him

In 2011, Leo Kelly was a top-producing Merrill Lynch broker with a wrenching decision to make.

Seeking a collegiality that he no longer experienced at Merrill Lynch, he was looking to make a move. On the one hand, he had thoroughly vetted HighTower Advisors LLC and decided that that was probably the best place for he and his partner, Brian Grumbach, to move their $700-million book of business.

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February 24, 2013

What is Your Advisory Practice Really Worth?

Recently an advisor was interested in selling his practice that he had built over the past several years. He was 69 years of age and wanted to be completely done working in the business within a year of closing the deal with his “ideal” buyer. The practice was a 100 percent fee-only business on about $125 million in assets, an attractive attribute.

The practice was generating approximately $1 million in gross revenues and the advisor/owner was taking home about $550,000 each year in income. This certainly seems like a well-run business and a desirable acquisition candidate on the surface. When asked what he thought the practice was worth, the advisor responded, “about $2.2 million.”

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January 29, 2013

What is Your Firm Really Worth?

Advisors who want to optimize the value of their firm may be in luck.

In the third of a four-part whitepaper series on advisor firm valuation, the Alliance for RIAs (aRIA) outlines how advisors can create a path to grow the value of their business, dependent on liquidity of cash flow and risks within a firm’s business and revenue model. 

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