The Wire

June 26, 2017

Why “Sustainable” Firms are Worth More

Valuation multiples are based on a lot more than asset totals. RIA owners often ask “What is my firm worth?” Many believe valuation multiples are relatively uniform across the RIA spectrum. In fact, valuations vary greatly, and are driven by what we call “sustainability.” Sustainable businesses are marked by five elements: size, margin, an effective/differentiated growth strategy, scalability and professional practices. These elements interact in a virtuous circle to drive value. Read More


June 22, 2017

A Goldman Sachs team attempts breakaway with a client as stakeholder in new RIA and suffers the consequences

A large, successful Goldman Sachs & Co. team will spend more time tending radishes and tomato vines this summer than building an RIA after trying to make a breakaway that includes an ultra high net worth client as a financial backer.Read More

March 17, 2017

What's Your RIA Worth? A Framework for Understanding Valuations

If you own a stake in a registered investment adviser, you probably spend time estimating what your shop is worth. With good reason.

Fees are coming down. Which puts pressure on annual compensation. Which makes equity stakes increasingly important to your personal wealth. Which means your retirement activities, whether you flip burgers in a greasy spoon or nurse fruity drinks on a Carribbean beach, depend on answers to three questions: Read More

January 26, 2017

Lessons for RIAs and vendors from a platform providers' demise

 It’s not as easy as it looks.

That applies to both breakaway brokers and the platform providers who service them — a fact most recently underscored by the demise of Sanctuary Wealth Services, which will go out of business at the end of March.

After nearly eight years of helping breakaway brokers become functioning independent RIAs by providing compliance, reporting, investment management and consulting services, Sanctuary saw too many firms defect to keep the business going. Read More

December 29, 2016

How Aspiriant knocked out another all-stock deal for an $850-million-AUM firm and why such pure-paper transactions don't grow on trees

Stanford had done its own succession spade work and its principals were willing to become workers in a Deloitte-cultured firm.

Brooke's Note: A billion here, a billion there ... sooner or later you're talking real billions. Aspiriant, with $10 billion or more in AUM, is what roll-ups aspire to be -- an RIA that serially acquires other big RIAs, or even smaller ones, at will. It does so by swapping its stocks for theirs.  Read More

December 6, 2016

Designing an optimal compensation program

The cost and complexity of developing effective compensation programs for advisory firm employees represents an ongoing challenge for firm principals. A successful approach to the issue is to focus on a top-down, strategic approach to compensation rather than bottom-up approach designed at the individual level.

That was the suggestion of IMPACT speaker John Furey of Advisor Growth Strategies, who focused on compensation and equity plans that he believes can drive excellence, not entitlement. Read More

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